President Irfaan Ali yesterday announced that following discussions with commercial banks, the interest rate for loans to the poultry sector will be cut from 8% to 5%.
This is an effort to make more liquidity available to farmers and reduce their monthly costs.
This move will be enabled by the removal of the corporate income tax on interest income from loans extended by banks to the poultry sector.
According to the President, during discussions over the last three weeks, farmers and investors in the poultry sector were promised that the government would further examine ways in which they can address the issue of the cost of capital and the interest rate for small farmers. As such, in a live broadcast early yesterday morning Ali announced, “We will introduce a facility under which the interest income earned by commercial banks on loans granted to the poultry sector will be free of corporate income tax… This now will enable commercial banks to lower their interest rate, the charge to the poultry sector by almost 3%, from 8% to about 5 %.”
He said, discussions were concluded with Republic Bank (Guyana) Limited, the Guyana Bank for Trade and Industry, Citizens Bank, and Demerara Bank Limited with the final discussions held yesterday morning at 2.30 – mere hours before the announcement.
“For those persons who have existing loans at these facilities, the new interest rate will be reflected in the new month, and for those who are going to acquire new capital this is the new interest rate”, he explained.
He further stated that “This is a tremendous moment for the poultry sector this morning… This is the exact measure we implemented when we wanted to expand the housing programme where you see loans now as low as 3.5% so this latest measure represents the latest step taken by the government to promote food production, increased food supply, and reduce the cost of basic food items to the final consumer and I am very pleased that all the commercial banks that I mentioned have already taken the decision to fully participate and to move towards the reduction in interest almost instantaneously as this measure takes effect now.”
He stressed that all investors in poultry and the poultry sector would benefit from this initiative, and encouraged those within the sector to take advantage of the benefits that will arise from the reduced cost of financing that will now be available to the sector.
Welcomed
The Guyana Poultry Producers Association yesterday welcomed the initiative to facilitate banks lowering the interest rate on financing provided to the sector, comprising a lower interest rate of 5 percent to borrowers in the sector and a further lower interest rate of 3½ percent for loans below a specified size.
In a statement, it said that these latest measures are in addition to the others previously announced by Ali following his meetings with the sector on 28 June and 7 July 2023. Those included: the procurement of vaccines to support poultry farmers to improve the medical condition of their stock and to reduce their cost of production; importation of frozen chicken geared at allowing small farmers to acquire chicken at cost price to facilitate reselling to their respective customers; equipping the (Guyana Livestock and Development Authority’s) GLDA’s nutrition laboratory with additional instruments; equipping the quarantine and surveillance unit with the necessary tools and equipment; training technical staff in good poultry production, health and laboratory practices; and installing additional hatcheries within the production zone.
It said that these actions are a tangible demonstration of the Government’s commitment, under President Ali’s leadership, to address in a meaningful manner the issues that are critical to ensuring adequate production and affordable availability of essential food items for the Guyanese people.
Following the President’s announcement, the Private Sector Commission also congratulated the government on the decision made to grant reduced interest rates on agricultural loans for poultry farmers. “The commission regards this decision as a positive step towards enhancing the livelihoods of the poultry farmers. The commission looks forward to the poultry farmers now utilizing this decision by the government to modernize and upgrade their production facilities and increase their production to ensure that Guyana becomes self-sufficient in poultry production”, a statement from the commission read.
Additionally, the PSC also took the opportunity to commend the government “on this and other initiatives to encourage private-sector development in Guyana” adding that they will “continue to advocate for the growth and development of our country.”
Homing
Meanwhile, homing in on the poultry sector during his announcement, Ali said that he recently met with poultry farmers to engage in frank and open discussions on recent developments and needed interventions in the sector “to support us achieving self-sufficiency in poultry meat but more importantly on the issue of developing our sector, making it more competitive, increasing our production and moving into value-added processing and manufacturing.”
According to him, following the engagements the government has laid out a “very comprehensive strategy in the short, medium and long term”, interventions which were needed to ensure the industry becomes vibrant and competitive.
“We have strengthened the national poultry association, we have engaged with MMA and Guyana Lands and Survey Commission on the issue of the allocation of lands for the poultry sector specifically the identification of another 25,000 acres of land for the production of rice as an input to feed.”
He pointed out that the cost of feed go up because of the cost of inputs, divulging that rice as a component of feed from 2020 would have increased by 100%, soya beans by 62% and corn by 57%. “So we are trying to have more control of the input costs by opening up opportunities for the industry.”
Ali stressed, that they have equipped the GLDA nutrition lab with additional instrument, while the quarantine and surveillance unit has been equipped with tools and equipment of more than $ 13m to support their work, “We are training technical staff in good poultry production, health and lab practices and we intend to extend this training to the farmers.”
On the procurement of vaccines, Ali said $29m was spent as according to him this would reduce the cost of acquisition of chicks by $6 each. “Engagement with the Ministry of Public Works on waiving …costs on the transport of live birds feed to regions 1, 2 and 7 and the riverine communities.”
Ali noted that they have installed additional hatcheries within the production zone and are looking at one new hatchery in Region Five with a capacity of 20,000 chicks per week.
“The commencement of the procurement process for the acquisition of cold storage facilities to support the farmers, increased engagement and patrols by GRA enforcement division and GLDA aimed at reducing smuggling and a draft sectoral development plan (has been ) completed and is currently being reviewed by IICA and FAO and other stakeholders”, he added.
Meanwhile, President Ali also took the opportunity to touch on measures the government has been implementing since assuming office to support the agriculture sector and food production in pursuit of food security in the first instance domestically and also at the regional level. He pointed to the establishment of farm-to-market roads to increase available lands for cultivation, increasing investments in drainage and irrigation, partnering with the private sector to develop large-scale corn and soya bean cultivation “which will enable us to become self-sufficient in animal feed”, distributing breeding stocks as well as planting materials and expanding extension services and development of new varieties”, he said.
Ali also cited the removal of VAT on heavy equipment used in agriculture and the progressive lowering of tax on fuel – a major input in agriculture – along with providing flood relief to farmers and fisherfolks and fertilizer support to farmers. “All of these measures have contributed to significant growth in the agriculture sector and lay the foundation for agriculture to continue to be vibrant and dynamic as part of our non-oil economy”, he added.
