In the coming weeks, consumers would have to pay more for locally grown food as chemical importers are now forced to pay duties on herbicides. The move has come like a thief in the night, leaving importers in a quandary and furious.
At least two of the country’s largest chemical importers—Caribbean Chemicals and Massy Distribution Agri and Industrial Chemicals—have confirmed they have had to pay Customs and Excise Division 20 per cent duty on their overall bill.
This is in total contradiction to what was outlined in last October’s budget presentation, delivered by Finance Minister Colm Imbert, who stated the Government would exempt from all duties and taxes imports into the agricultural sector, including approved chemicals, pest control, approved vehicles, approved fishing vessels and equipment, which took effect on January 1.
Managing director of Caribbean Chemicals Joe Pires said in an interview that he was so upset by the duties charged that he wrote Minister of Agriculture, Land and Fisheries Clarence Rambharat on June 7, calling for his immediate intervention into the matter.
Pires said he pleaded with Rambharat to release the duties on a freight container filled with herbicides, which is due to arrive in the country soon. The cost of the herbicide was estimated at $275,000 of which Pires had to pay $55,000 or 20 per cent duty last week. Some of the herbicides that are imported are Gramoxone/Paraquat, Round-Up, Velpar, Tordon and Arsenal.
“We had to pay the hefty duty to clear the shipment. Every week we have shipments coming in. This will no doubt affect our business,” Pires said.
In the 50 years Caribbean Chemicals has been importing, Pires said they have never paid duties.
“If we are to begin paying duties on these basic items that the farmers require, it will then force us to pass this cost onto them (farmers) in an already challenging environment. Obviously, the farmers will have no choice but to pass on this cost to the consumer. It will create a chain reaction and increase the cost of locally grown food. Consumers will have to pay more for produce. That is the bottom line,” said Pires.
Pires said for the Government to now charge duties will be counter productive.
“If we are on a mission to reduce the country’s $5 billion food import bill we are spinning top in mud with these duties. It would also dissuade farmers from cultivating crops,” Pires said.
Dave Seebaransingh, manager of Massy Distribution, said importers are asked to fill out a duty-free application by the Ministry of Agriculture at the beginning of the year, which outlines the products they would import and the quantities involved.
“They (ministry) grant you duty free concessions. We had our duty free concession letter...we had everything, but yet still we had to pay the 20 per cent duty on a shipment we brought in recently.”
Seebaransingh said the shipment that came in late last month was “unsellable for the price we had to pay the duty on. I am in a quandary. The duties charged came as a shock to me. This was the last thing we were expecting.” He said agricultural shops which are his main customers would not buy the product because of the cost that is now attached.
“It would be difficult to sell this to the farmers. In fact, I am stuck with the product on my hands. Soon, I would have to cut my losses and sell it at the cost price because there is an expiry date on the herbicide,” Seebaransingh said.
Only recently, it was brought to the importers’ attention that Customs and Excise Division now carry a new tariff which states that importers would have to pay a 20 per cent duty if their packages are under six kilogrammes.
“Customs and Excise is telling us that our imported packages must be over six kilogrammes upon presentation of sale if we are to be exempted from duties. This just does not make sense. We are accustomed buying in small packages or containers abroad to meet the demands of our farmers,” Pires explained.
Seebaransingh said T&T’s farming community by nature, purchase in small amounts because of the parcels of land they cultivate.
“Most of the farmers cultivate on one or two acre plots. Our products are sold in 250 ml, 500 ml or one litre sizes. A litre does not weigh anything close to six kilogrammes. It is far less,” Seebaransingh said.
If this problem is not resolved, Seebaransingh the consumer will have to pay a higher price for produce in the coming weeks. Seebaransingh said while they have had to pay the duty, there are unscrupulous importers who bring in poor quality herbicides/weedicides, but get away from paying duties. Minister Rambharat did not respond to a text message.