JMEA calls for more targeted concessions
THE MINISTRY of Industry, Commerce, Agriculture & Fisheries, MICAF, will forgo over $100 million in revenue from its decision to cut export-related fees and charges by 50 per cent, but for manufacturers and exporters, some of which are looking at potential closures at end-May, the measure does not go far enough. The reduction took effect on April 1 and was deemed part of the Government’s stimulus package to encourage Jamaican companies to continue seeking export opportunities, even as the country grapples with the COVID-19 crisis. The fees slashed by the Jamaica Agricultural Commodities Regulatory Authority, JACRA, and the Trade Board impact agricultural commodities, including coffee, cocoa, and spice and coconut licensing fees. For the Jamaica Manufacturers and Exporters Association, JMEA, the reduction in export fees will have a meaningful impact, but there is another side of the JACRA charges that remains a sore point for producers – import fees. “In surveys conducted with the JMEA membership base since the announced reduction, the manufacturers of tea, coffee, and other products that utilise those commodities regulated by JACRA as raw materials said that the 50 per cent reduction in export cess has provided relief,” said JMEA President Richard Pandohie. “However, these manufacturers continue to pay both an import duty and the JACRA cess on raw materials, which are further processed to make finished products that are exported,” he said. As a result, Pandohie said, the cost of these input raw materials to manufacturers is far higher than they would be to processors outside of Jamaica and therefore impacts their competitiveness in export markets. JACRA fees fall heaviest on the coffee sector, and the charges that were implemented in 2018 have been taking bites out of manufacturers’ profits, with Salada Foods Jamaica being one of the most vocal about the effects on its finances. “The reduction on export cess is of minuscule benefit to Salada. The cess on imported green beans of US$1.41 per kg is the real issue and what continues to hurt Salada’s competitive position in both export and domestic markets,” Diana Blake-Bennett told the Financial Gleaner. “We use imported green beans as a raw material, which at global market price, coffee sells for US$1.5 to US$2 [per pound]. This year, as a country, we produced one million pounds of Blue Mountain coffee at a price of US$7 per pound. Nobody in the world could buy instant coffee that uses