President of the Grenada Association of Poultry Producers (GAPP), Jason Phillip has said it is up to government to challenge the monopoly situation of Caribbean Agro Industries (CAI) with flour and animal feed and not the farming body.
Phillip was responding to a recent statement made by Trade Minister, Alvin DaBreo that it was the responsibility of poultry farmers to take the matter of the monopoly enjoyed by Caribbean Agro to the Trinidad & Tobago-based Caribbean Court of Justice (CCCJ) which has jurisdiction over the interpretation of trade matters in the Treaty of Chaguaramas which established the Caribbean Community (CARICOM).
The issue came to the fore over the manner in which CAI in the past month announced an increase in price for flour and animal feed in the wake of the Coronavirus pandemic.
The Mt. Gay-based company in February announced a 6% to 16% increase on some prices of its products due to “developments occurring on the international grain market which is having a profound negative impact on the cost of sourcing key ingredients for manufacturing flour and animal feed”.
GAPP has been calling on the Keith Mitchell-led government to intervene since the price hike will have a negative effect on the poultry industry.
In an exclusive interview with THE NEW TODAY, Phillip said it is only government that can challenge the company’s monopoly status based on the agreement that was signed back in the 1970’s when the company was established to conduct business on the island.
“It is only government that can challenge the company,” he quipped.
According to Phillip, the CCJ route is something that can be considered by GAPP but the reality of the situation is that the association does not have the financial resources to engage in a protracted legal battle against CAI since it used up a lot of its funds over the past year in giving 100% support to members.
However, he was quick to point out that poultry farmers cannot really take CAI to CCJ over “a matter that still the government is the only one who is legally in a contract with the company”.
Phillip said it is the Grenada government that has the “sales agreement” with the parent company of CAI, the U.S-based Archer Daniels Midland (ADM) where poultry feed is concerned.
“Based on what that contract allows ADM, Caribbean Agro Industries has a lot of leeway. Now because of that it doesn’t matter who in the country has a problem with the company they cannot legally force the company to do anything. The government is the one who can take the matter up…,” he told THE NEW TODAY.
The GAPP boss believes that ADM and CAI are in contravention of some of the governing articles concerning the Treaty of Chaguaramas where free trade is concerned among member territories.
“We want the government to look at the entire picture, not just what is seen through the lenses of the company,” he said.
According to Phillip, the CAI monopoly on flour and animal feed is one of the issues that GAPP would definitely raise with government officials at a meeting that was proposed between both sides.
“The reality is that this is a matter that just does not affect poultry farmers but affects the entire nation,” he remarked.
The poultry farmer from St Paul pointed out that the latest price increases from CAI has also affected bakers, small shops and everyone else who use flour in their production line.
“Given the fact that flour is one of the main staples in this country that is consumed on a daily basis, I think that it is fool hardy to think that the government doesn’t see the larger picture and realise that they need to intervene,” he said.
On the proposed meeting with government, Phillip said that no date has been set for the session to address the recent rise in the price of animal feed from Caribbean Agro Industries.
He said the government is the one that had made this public pronouncement but he is not aware of any direct contact between the State and members of his association on the meeting.
“…I have not received any official contact from any of the ministries where that is concerned,” he told THE NEW TODAY.
According to Phillip, the association did not request this particular meeting with government but felt that it might have come about based on a call made by GAPP for the Mitchell-led government to intervene following the price increases in animal feed by Caribbean Agro.
He recalled that what the poultry farmers did was to ask specifically for the administration to make a statement on exactly “what it is that government intends to do” in order to have the issue of the CAI price increases resolved.
“We are waiting right now on government to give us that same meeting so that we can be briefed on what they intend to do,” he remarked.
Phillip made mention of a planned meeting between government and CAI officials on the issue and the outcome of the talks will determine what kind of response will come from GAAP to government in their own meeting.
He said: “We need the government to intervene because the cost of production for poultry in Grenada needs to go down. The reality for us is that we are in direct competition with everything that is imported and the reality is that our consumers in the country are price sensitive – they are very loyal to price.
“So even though we may have the grandest of schemes in terms of getting people to support local but people are still going to be loyal based on where their pocket can reach. So we cannot fool ourselves to say that if we want to see Grenada become 100% sustainable in poultry production that we can do so with the current circumstances that exist.
According to Phillip as far as GAPP is concern, even before Covid-19 hit the island a year ago, the cost of animal feed in Grenada was much too high for farmers.
“We are saying that we do not want Caribbean Agro to leave, we do not want them to shut down but we do believe that on the basis of things happening in the business model on how they sell feed and flour to other markets outside of Grenada that they can reduce their cost locally and still be profitable and viable,” he said.