‘Tax processed food; start regional ferry service’

One prominent economist is proposing that Barbados and other Caribbean Community (CARICOM) member states put a tax on processed foods and subsidize fresh produce to help increase the production of more nutritious food.

In addition, Avinash Persaud, Chairman of the CARICOM Commission, has put the issue of a regional ferry system back on the table, saying this was one way of ensuring that people and goods were moved between some countries at a more affordable cost.

He was discussing recommendations contained in the latest CARICOM Commission Report on the Economy, during a recent online session.
Persaud explained that during the first year of the COVID-19 pandemic there was no major disruption of supply chains as initially anticipated, and there was proof that Barbados and other islands were not short on food supplies.

“The government of Barbados was quite prepared to take extreme measures to bring in supplies of food or anything that was in short supply, but within a couple of weeks it became clear there wasn’t a supply disruption,” said Persaud.

“I think we have a nutrition problem in the Caribbean rather than a food supply problem. We have food coming in and it is not good food. It is a lot of processed food.

Our non-communicable diseases are going sky high and one of the reasons why is because of the cost and speed of transport of fresh food,” he argued.

“So food security is not really a problem. Nutrition security is the problem – are people eating the wrong foods? Let us use the tax system, the fiscal system to encourage healthier foods so we live longer,” he recommended.

Barbados and some other CARICOM member states currently impose a tax on sugar-sweetened beverages.

With only about two per cent of Barbados’ gross domestic product coming from the agriculture sector, Persaud said this was reflective of the lack of highly skilled individuals, which he said was due to very low wages.

Suggesting that higher wages and a greater focus on technology use in the sector could lead to more nutritional food being produced in the region, Persaud maintained that “we should subsidize fresh food and tax processed food to deal with nutrition issues”.

In relation to a proposed regional ferry system, the CARICOM Commission report noted that there have been many feasibility studies on the viability of a regional ferry system.

“Commissioners have consulted with investors and boat builders. There are investors prepared to invest US$50 million to purchase an ideal vessel for intraregional routes and one is available.

“This is no longer a much talked about pipedream, but it will not happen if we do not change the travel and trade regulation within the region,” said the report.

Pointing to logistical issues as one of the reasons for the current high costs of travel within the Caribbean, Persaud said a fast ferry system could be a solution.

He said it would require investment of some US$75 million, adding that “part of the problem is that the private sector is unable to invest that huge amount of money in a world of great uncertainty about marine diesel oil”.

He reasoned that if governments were to find a way of reducing that uncertainty “then we may be able to get the private sector to put up that money”.

“It is one of our leading recommendations that we need to support the development of a fast ferry network.

It probably means buying one or two ferries.

It means that the state will need to come in and provide some kind of guarantee. We have a lot of strong interest in some places in supporting that and so I hope that would move forward,” said Persaud.

“To get the fast ferry to work you would need countries to agree to fast movement. There is no point in having a fast ferry to go through three or four countries in one day if it takes several hours to deal with immigration and customs,” he said.

In addition to immigration matters, the report also called for individuals to be able to travel with their vehicles on the ferry, and for measures to be put in place for their insurance coverage to be valid when they do so.

It also called for a dispute resolution mechanism for when goods are not allowed to flow freely throughout the region or contentious levels of duties or charges are applied. (MM)

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