Budget sends mixed food security message
Cheaper ham and turkey, through removal of VAT, promise a likely merrier Christmas 2012, but hardly any sustainable longer-term benefit for T&T consumers and the T&T economy. This outcome threatens to be an unintended consequence of Finance Minister Larry Howai Budget's removal of value added tax from such foodstuffs as were still subject to it.
It's not immediately clear how making such imported seasonal fare more affordable supports the bigger-picture policy objective of stimulating domestic food production for local consumption. If anything, fostering imports of discretionary, if not altogether luxury, items could serve the opposite purpose of stalling advances toward food security.
Obviously, it is foreign producers who stand to benefit from T&T fiscal moves aimed at making their products cheaper on local market. Moreover, given the higher production costs resulting from this year's North American drought, inflated prices could yet defeat the intention to lower costs by removing VAT.
Again, not to be played down is the signal sent by reinforcing consumer preferences for foreign. It could not be conscious policy of this or any government to discourage for the foreseeable future local production of ham and turkey.
In any event, elsewhere in the Howai Budget a proposal of Caricom regional significance deserves far more favourable attention for its potential linking of T&T and Guyanese resources. The proposal has since been ridiculed by Opposition Leader Keith Rowley as worse than "pie in the sky" and as a recycling of an old idea that failed.
That the Caribbean Food Corporation failed in its time is hardly an adequate reason to reject a round of fresh initiative with today's proposed Food Security Facility, which combines T&T financing of agricultural production on large plots made available in Guyana.
A similar project has already been successfully implemented with T&T Citrus Growers' Association growing fruit on large-scale acreages in Guyana and Belize. In this collaborative approach toward Caribbean food security, such combinations of resources entail islands with limited land space making constructive use of otherwise underutilised hinterland of continental Caricom partners. Rising above whatever discouragement may be entailed in cheaper turkey and ham products, T&T farmers and other investors should explore taking advantage of the incentives provided under the Food Security Facility.