The Ministry of Food Production had its budget allocation slashed by 29 per cent in the 2013 budget, with its subvention being reduced from $945.8 million in 2012 to $732.8 million. In the 2013 budget presentation, Finance Minister Larry Howai said the Government was proposing to reduce T&T’s “food import bill by 50 per cent or just over $2 billion per year by 2015.” Following the last Cabinet reshuffle, Land and Marine Affairs was removed from the Ministry of Food Production and added to the Ministry of Housing, which had the Environment portfolio taken away from it. The Ministry of Housing, Land and Marine Affairs saw its allocation more than double from $998 million to $2.4 billion.
Reacting to the subvention for the Ministry of Food Production, economist Indera Sagewan-Alli, the director of the Caribbean Competitiveness Centre, said for the country's survival, the same emphasis that the Government places on the energy sector, it must also place on the agriculture sector. “In my view, more money in the budget should have been allocated to the agriculture sector. We should be going after agriculture in the same way that we are going after energy. We need to take the model of the energy sector and duplicate it in the agriculture sector,” she said.
She also raised questions about the Government’s intention to remove VAT from 7,000 food items. “We are talking about the removal of VAT from 7,000 items, what is the tax that the minister is forgoing when he does this, and how is he making up for this for a shortfall in revenue? This should concern everyone,” she said.
She is “worried” that the removal of VAT on imported food items will be an incentive for importing more food into the country instead of self sufficiency. “The items I see listed for VAT removal concerns me. There are items like smoked turkey, smoked salmon, tartar sauce, mayonnaise, patties and a range of items, so what is the objective of this? Do we just want to see a reduction in inflation? But the Government is talking about reducing the food import bill which is $4 billion and what is the implication for this? An initiative like this which is across the board does not allow you to support the domestic agriculture industry,” she said.
She asked how many stakeholders in the agriculture industry were consulted before the Government made its decisions.“I am sure if you talk to the sheep and goat producers, they would say this is the final nail in the coffin. The market is flooded with imported tomatoes, sweet peppers and other items that are very competitive even with VAT, sometimes compared to the prices of local food,” she said.
She also called for greater use of technology in the agriculture sector. “We need to move agriculture from break-back agriculture to technology-driven agriculture. But we must treat with the problem. If you simply have an incentive for me to borrow from the ADB that is not enough. But where is the mechanism to help me with the technical problem on my farm, it does not exist. To produce food that we need for the volumes of this economy we have to use technology,” she said.