The struggles of facing up to rising chicken prices
The wings of low and middle-income Jamaicans are being clipped as they struggle with the escalating price of poultry, in particular, chicken.
Figures obtained from the Ministry of Agriculture and Fisheries last week showed that Jamaica’s main producer of chicken, Jamaica Broilers, which trades under the Best Dressed Chicken brand, increased its prices 15 times over a 25-month period.
A pound of mixed chicken parts at local wholesales sells for around $300, while it goes for as high as $485 per pound at some of the more prominent supermarkets.
When those prices of the commodity are compared to those in supermarkets in Florida, USA, where a pound of leg quarters sells for US$0.66 in leading retailer Walmart, a conversion to $103.58, it represents a third of what people normally pay for the product in Jamaica.
But what are the factors that have led to the wide disparity that is depriving Jamaicans of an affordable supply of the popular and much-needed source of protein?
Successive government policies have given rise to protectionism of the two large producers who control supply and hence the movement in prices.
Questions are being asked about the granting of permits for the importation of chicken meat and recently Minister of Agriculture and Fisheries Pearnel Charles Jr indicated that the Government would be considering the removal or reduction of the common external tariff on the importation of chicken leg quarters so that the commodity may be sold to the consumer at lower rates.
However, it is understood the minister’s intentions have not gone down well with the major players in the industry, who are claiming that such an action would put small and medium chicken farmers out of business.
Opposition spokesman on finance, planning, and the public service Julian Robinson said he would not support the removal of the CET for a number of reasons. “The importation of chicken meat has been characterised by a lack of transparency and corruption. Currently, there is no mechanism to ensure that the importers deliver the meat at a specific price. What is likely is that the final price will be just below the current prices, giving the importers windfall profits.”
He said the fallout will be greater on the smaller producers and that a full examination of the consequences of the removal must be considered.
“The countries which we would be importing chicken parts from subsidise their farmers, so it’s not a level playing field. The revenue that would be lost from the removal of the CET should be used to help subsidise input costs. When I look at the dairy industry, we have to be very careful about how we treat with the removal of duties. It would provide temporary relief but create longer term consequences that force us into being permanent importers of chicken,” Robinson continued.
He said the chicken industry is dominated by two large players – a duopoly similar to the banking sector. “There is obviously room for greater efficiencies, which can be facilitated by competition, but food security is critical and removing duties could be disastrous,” Robinson went on.
“The question I would ask the Government is how long they plan to remove the CET for. I ask, given that high prices will remain for a while, with the dollar depreciating, while oil, gas, and electricity prices are rising. How will they determine when it is a good time to stop the programme under these circumstances? Robinson asked.
Local farmers say their biggest hurdle to positive productivity is the cost of inputs like feed, a sector which is also controlled by the largest chicken producer in the country.
Robinson said: “I think consideration should be given to a temporary subsidy on some of the inputs on raw materials that go into chicken production, mainly things like feed. That should be given on an understanding that the producers will deliver at a specific price.”
Melva, who operates a small coop of around 300 chickens in St Mary, described the cost of feed and equipment to the Jamaica Observer as “crippling”.
“We work very hard, and at the end of the day what we make only amounts to the minimum wage. We have to pay workers and markets are very hard to find. We have to depend on friends and family to keep us going so we can send our children to school and take care of our basic needs. There isn’t much profit. The Government needs to find a way to open up the supplies market so that there can be cheaper supplies of feed.”
Asked how she felt about the importation of cheaper chicken meat and if it would affect their industry, she said: “If people are going to get chicken at cheaper prices it will affect us, but, at the same time, many people prefer their home-grown chickens than those produced with a lot of hormones and stimulants, so we could still have a place in the market, but we would need to lower our costs to be competitive.”
While Government grapples with the decision to grant import permits for leg quarters, numerous companies are importing chicken back and chicken neck, which are the more affordable option for the lower class but does not offer much in terms of high-quality protein and nutritional value. And, from all accounts, people are growing weary of the low-quality items.
Household helper Delphine said she has no option because her salary does not allow her to afford chicken to feed herself and three children. “When it’s not chicken back its chicken neck or chicken foot. The best we can do sometimes is a bit of turkey neck. The Government must can do something to help us eat like decent people. I get frustrated, especially on the weekends, when I would like to feed my children well, but I just can’t do it.”
The price mushrooming is also affecting fast food outlets as customers are complaining about the continuous rise in chicken meal prices.
Responding to a Twitter advert by one of the country’s leading fast food companies, one customer said, “Every week oonu raise the price like a turkey oonu a sell. Man soon start nyam grass and drink water because by next week it will be two grand for a three-piece meal.”
Another commented: “Soon can’t afford this because of the constant raising of the prices. If this continues, some stores will soon have to close because chicken will be too expensive to be bought and resold.”
The Sunday Observer tried to reach Restaurants of Jamaica, operators of KFC, to gauge the movement in prices, without success.
The mecca of Jamaican street food – Red Hills Road – is also affected. The price of jerked chicken has increased since January. It now costs $700 for a quarter of the much-desired night-time fare.
Vendor Baba Reuben said the continuous hike of the meat had forced the escalation in price, and this has triggered a slump in business. “Things very slow now. Some people have not reacted well to the increase in price, but there is nothing we can do,” he said.
Reuben buys chicken at between $280 and $290 per pound and he said his philosophy is to support small farmers. “I buy from the big suppliers, but I also support small farmers who do home-grown chicken. Many people like that, but I find that even the small farmers have to be increasing their prices because it’s not easy on them. We, the vendors, want to make a good profit, but if the price moves out of the reach of the people, everybody will suffer. I want to see something done so the prices can settle down so the farmers can benefit, we benefit and the customer is satisfied,” he said.
Meanwhile, Opposition spokesman on agriculture and water Lothan Cousins is again calling for urgent action to ensure affordable prices for baby chicks in the poultry industry, especially for small producers.
Cousins said he had received several calls from small producers complaining about a new round of price increases for baby chicks and the increased use of marrying the selling of baby chicks with broiler ration, which has become pervasive in farm stores across the island. He said this development followed a series of increases last year, which negatively impacted the sector.
The Opposition spokesman said he had called upon the former Minister of Agriculture Floyd Green, last year, to assist the small poultry producers, who were threatened by the soaring prices, to ensure stability in the sector because the practice was pushing up the cost of chicken on consumers.
However, Cousins said nothing was done, and therefore he was repeating his call to the new minister, Charles Jr, to intervene urgently and help the farmers. He said small producers were an integral part of local supply and their demise would inevitably lead to a shortage of chicken and an increase in prices.
The agriculture spokesman said chicken meat is a cheap source of protein for the poor, and if people’s ability to purchase is further impaired, it will harm their health and the health of the nation.
Cousins proposed an expanded poultry farming component under the Ministry of Agriculture’s Production Incentive Programme to provide baby chicks and feed free of cost to small producers. He said the programme’s implementation could be supervised by the Rural Agricultural Development Authority.