Dear Editor,

Since my last article — Jamaica Observer, February 6, 2022 — on the proposal to temporarily reduce the Common External Tariff (CET) and the additional stamp duty (ASD) on chicken leg quarters, I find it necessary to provide additional information.

In that article I lamented the need for more information. To date, save for incorrect quotes on the level of the CET, I haven’t seen additional information which could help interested readers to better understand the status quo as it relates to the import duty on chicken leg quarters.

Contrary to the numbers thrown around in the press, my checks have revealed that the CET on frozen and raw chicken leg quarters is set at 40 per cent for Jamaica and most Caricom members. One institution suggested that Jamaica had requested that the CET on leg quarters be increased to 100 per cent; the institution could not say when the request/change was made.

Another institution indicated that no such request was made. The most recent publicly available Caricom CET schedule is dated April 2018; the schedule states that Jamaica’s CET for leg quarters is 40 per cent. On the Jamaica Customs Integrated Tariff Schedules (October 17, 2017 and March 15, 2021), the “import duty” (ID01) on chicken leg quarters is 100 per cent; it seems that this figure includes the 40 per cent CET.

According to Jamaica’s World Trade Organization (WTO) commitments, agricultural tariffs are bound at 100 per cent. This means that Jamaica is allowed a maximum import duty of 100 per cent on products such as chicken leg quarters. Further, in Jamaica’s case, this bounded rate is also the applied rate.

In addition to the import duty there is an ASD of 80 per cent. The import duty and the ASD are compounded to arrive at a total import duty of 260 per cent.

There are a couple things to note.

First, the Jamaican Government has been offering significant protection to the poultry industry. Indeed, the higher the tariff, the greater the protection local producers will receive. The Government of Jamaica is clearly seeking to promote food security; however, this protection can reduce the efforts of poultry farmers to increase their productivity and so a review of the sector is warranted from time to time.

Second, there is no need for a reduction in the CET and therefore no need for Caricom approval. All that needs to happen is that the Government can temporarily reduce the ASD and the non-CET component of the import duty.

What is the way forward?

There are two broad considerations — short term and long term.

The short-term consideration is whether to implement the temporary reduction in the import duty and the ASD. This decision will require consultations and careful planning to understand the impact on the sector’s most vulnerable stakeholders and the optimal duration of the temporary measures.

In the long term, there is need for continuous study of the sector to ensure the optimal level of government support for the sector’s sustainable development.

Beyond the poultry sector, there is an urgent need for the advancement of the national and regional agricultural sectors to enhance our food security.

Samuel Braithwaite

braithwaitesamuel@gmail.com