PM to announce economic recovery plan

[Lazie]

By JULIAN RICHARDSON Observer staff reporter

Friday, December 12, 2008



Prime Minister Bruce Golding is expected to announce an economic stimulus plan to deal with the worsening global financial crisis during a televised address to the nation on Sunday.

Speaking at a Private Sector Organisation of Jamaica (PSOJ) luncheon Wednesday at the Hilton Kingston Hotel, Minister of Finance and the Public Service Audley Shaw said Golding's presentation would be made on the heels of a number of consultations with private sector associations.

"We have heard you. You have come to us as the PSOJ, the Jamaica Hotel and Tourist Association, the Jamaica Manufacturers Association and the Small Business Association," said Shaw.

He added: "You have all approached us with specific proposals. We are not going to be able to do everything that you have asked for," he noted. "But we are going to respond by starting a process where we are going to have to put an emphasis on encouraging a return to production and productivity in this country."

Shaw also used the platform to stand by his earlier position that despite the ongoing global financial crisis, Jamaica's financial fundamentals remained strong.

He said that the significant slippage of the local currency in recent weeks, which has seen the Jamaican dollar devalue to trade at more than J$79 to US$1, was more due to speculation than to any fundamental problems in the economy.

"Now is not a time for us to lose faith and to lose confidence in the Jamaican economy," he said. "It's the other way around; it is a time when we should draw upon every reserve of faith and confidence as things could be much worse.

"Even as we are seeing a slippage in the exchange rate, the truth is that we are seeing it not because of a fundamental shortage of foreign exchange in the economy but because some have it and some who need it can't get it, and hence the pressure on the exchange rate," he said.

To support his assessment, the minister highlighted that Jamaica's Net International Reserves - US$1.8 billion - and private sector foreign exchange accounts - US$2.3 billion - is at the same level now as it was last year.

"In terms of those two indices alone you see that there should be no cause for lack of confidence or for any panic in the system whatsoever," Shaw explained.

International Monetary Fund (IMF) managing director Dominique Strauss-Khan, who spoke at the luncheon, defended the Bank of Jamaica's (BOJ's) recent intervention in the money market in which it hiked interest rates to curb pressure on the dollar.

The IMF boss said that while he understands that there will be concerns from the business sector, the central bank's measure was the best measure for Jamaica to protect its current account and reserves.

"We cannot just imagine that there will be just one kind of policy response - one size fits all - that can be applied all across the board to every country in the world," said Strauss-Khan.

"The spillover of the crisis has widened Jamaica's sovereign spread and put pressure on the currency and on the reserves," he continued.

"You have to protect your current account; you have to protect your reserves. You need to use all the tools that you have in your toolbox, including interest rates....so the question is not what would be the best for business; the question is what can we afford in the situation in which we are and where the pressure is so strong."
Strauss-Khan, who was in Jamaica on a one-day visit left the island Wednesday.

http://www.jamaicaobserver.com/news/...Y_PLAN__B_.asp

[Lazie]

""But we are going to respond by starting a process where we are going to have to put an emphasis on encouraging a return to production and productivity in this country." (1/3 or Man a Yard or Cape Candidate whichever yuh prefer).

What I don't get is if we are to go back to production and productivity, whats the reason for the Agri Minister allowing the importation of chicken parts? The two major chicken producers have stated that they will be able to meet the demands for the product. Is the Minister aware of this? Is the importation of chicken an attempt to drive down the price?

[Lazie]

Tufton not backing down - Opens market to 625,000 kg of foreign meat

Dr Christopher Tufton, minister of agriculture, says his decision to open up the market to chicken imports this Christmas was made on estimates of a decline in production by two million kilograms, but Jamaican producers say his action was hasty, and detrimental to food security.

The producers have spoken out as a group, issuing a statement about their concerns, but have not telegraphed whether they are prepared to do anything other than verbally object.

They were joined by the Jamaica Manufacturers' Association who said Tufton's decision was counter to the campaign to 'Eat what we Grow and Grow what we Eat'.

"Based on consultations with our members, the JMA is of the view that local producers are able to meet the demand of the season, which is projected to be less than previous years, based on the economic downturn and a reduction in consumer spending," said the association in a statement.

"The JMA is distraught by this decision and insists that instead of resorting to importing goods which we are able to manufacture locally, the focus of our administration should be to boost local industry, create jobs and foster development. The Government must stop sending mixed signals to the country, saying that they are for production, yet acting otherwise."

Tufton told the Financial Gleaner that he had granted licences for the importation of 600,000 tonnes of chicken quarters over the holidays. Later in a statement he amended the figure to 625,000 kg.

"It is an annual thing, it is not a first time thing and it is based on the production numbers," the minister told the Financial Gleaner.

"There is a production shortfall when compared to last year."

But Dean Lee, president of the National Poultry Growers' Cooperative Society (NPGCS), says producers have indicated in monthly industry data supplied to the Ministry of Agriculture that there would be no deficit in supply based on market conditions.

"I am against the idea of the licences being granted at this time," said Lee on Thursday.

"The major producer companies give input data to the Ministry of Agriculture every month on the bird's space and the kilograms of chicken meat ready for consumption each month. In the last round of conversation with the ministry regarding these issues, it was offered to the ministry that the nation can be fed by locally produced chicken."

The quarrel over chicken imports occurs annually, but this time producers say they are even more disappointed with the decision to open the market to competition, suggesting that it would deny them revenue to service loans and the investment in new technology - specifically Tunnel Ventilated Houses - that Tufton has been encouraging them to make.

"These are farmers who have also had to contend with recent hikes in interest rates which they pay on the loans they accessed to make their investment in the sector," said NPGCS.

"To now ask us to continue to battle against imports of leg quarters while our own production levels have been reduced is to make the trading field even less level than it was previously."

Jamaica's poultry market is dominated by Jamaica Broilers Group, with Caribbean Broilers trailing second.

Small poultry farmers account for 35 per cent to 40 per cent of chicken meat supply, which the NPGCS says represents nine million birds or 20 million kilograms of meat each year.

Jamaica Broilers controls about 35 per cent of the market.

"There is going to be more production in the market, especially right after Christmas and the people that are going to be affected a lot are the small farmers," said Robert Levy, president of Jamaica Broilers Group. "We tried to tell the minister that there were ample supplies in the market but he still went ahead and imported."

Assurance not good

But Tufton said words were insufficient to satisfy him that supplies would be adequate.

"Their assurances are not good enough," he said.

"What we use to make our decision is the actual numbers they provide us with."

Last year, the sector produced 107 million kilograms, this year they are producing 104 million kilograms.

"There is a two-million kilogram difference," said the minister.

"We have granted permits of just under 600,000kg - well lower than the gap between last year and this year - and it is based on the data they provide."

Tufton said that by ensuring adequate supplies, it was unlikely that local producers would raise prices, keeping the meat affordable for consumers already pinched by higher shelf prices.

Challenging year

"What you don't want is a shortage resulting in further price increases and that is normally the case, almost every year during this time prices go up (by at least) 25 per cent and we are saying this is a particularly challenging year for consumers," he said.

Importers have a 30-40 day window to bring in shipments on which they will pay duty of 40 per cent. Duty on chicken meat imports is normally 260 per cent.

"It is going to have a negative effect come January, February and that is what a lot of farmers are concerned about," said Levy.

"That means we will have to lay off and cut back production."

But Tufton said the importation would not likely have such an impact in such a short time frame.

"I think the broiler companies are being alarmist. In this challenging time throughout the world, jobs are always going to be an issue. But based on the numbers that we have, we have taken a rational decision and it does not support the concerns raised to the extreme positions that are being expressed," he said.

Tufton also defended his decision, criticized by Levy, to grant the licences to importers who were not poultry producers.

"Who it was not given to are the broiler companies," the minister said.

"I take the position that if the broiler companies enjoy such protection and they cannot satisfy the demand in the marketplace in a manner that allows for affordability, then Government should not reward them with permits to import," he said.

dionne.rose@gleanerjm.com




You pay:Imported leg quarters $238.10 per kg
Best Dress chicken $448.40 per kg
CB Chicken $312.75 per kg

http://www.jamaica-gleaner.com/glean...business1.html

[Mosiah]

it's the "in thing" to do.

[Lazie]

it's the "in thing" to do.

Really? According to the Minister, "this represents the first shipment of leg quarters to be imported this year, while in previous years, an average of four to five containers were imported on a weekly basis." (RJR).

[Exile]

I think he was talking about the 'recovery' speech.

[Mosiah]

Lazie not suh fast. Tek time!

heh heh!

[Don1]

Really? According to the Minister, "this represents the first shipment of leg quarters to be imported this year, while in previous years, an average of four to five containers were imported on a weekly basis." (RJR).

[Lazie]

Lazie not suh fast. Tek time!

heh heh!

Well, next time reference the post you're responding to.