Business

Shaw's responses to issues raised in sectoral debate on the economy

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Sunday, July 15, 2018

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Minister of Industry, Commerce, Agriculture and Fisheries Audley Shaw closed the annual sectoral debate on Tuesday, July 10, in the House of Representatives.

Shaw opened the debate on May 1, announcing, for example, that work had commenced to establish Jamaica's National Trade Portal, which had been approved by Cabinet in 2017/18.

He indicated that the portal is being established under the Government's Trade Facilitation Initiative, and noted that the project is being funded through a grant from the World Bank.

He also advised that the portal would serve as a precursor to the Electronic Single Window, another component of the initiative.

“We have already signed the contract, and procurement of the specialists is now under way,” he told the House.

But, perhaps, the most remarkable statement he made was confirming the fact that it was the first time, at least since Jamaica's independence in August, 1962, that the same member had opened both the annual budget debate and the sectoral debate, during the same fiscal or parliamentary year.

This happened because Shaw was the Minister of Finance and the Public Service at the time of the budget debate in March, but had been transferred to the Ministry of Industry, Commerce, Agriculture and Fisheries by the time the Sectoral Debate began in May.

These are the two main debates held annually in the House of Representatives, comparable to the debate on the Appropriations Bill and the state of the nation debate in the Senate.

Below is a synopsis of Shaw's response to the various issues raised on the economy during the sectoral debate:

CARICOM

Of note are the measures posited by the heads of government of the region to fast-track the full implementation of the Caricom Single Market and Economy (CSME)

These measures include the special meeting of Caricom heads to focus solely on the CSME and which is to be convened in Trinidad and Tobago in November this year, as well as the quarterly meetings of the Prime Ministerial Sub-Committee on the CSME to give urgency to the implementation process, slated to begin in September in Barbados.

These measures will undoubtedly lead to the strengthening of our regional partnerships, strategic frameworks and the utilisation of the potential of the Caricom Market as, collectively, we move toward advancing the region.

Having regard to this level of engagement by the prime minister and his visionary initiative to seek to jump-start the stalled regional integration process, I think this can hardly be characterised as “a doctrine of doing nothing”, as posited by the Opposition Spokesperson on foreign affairs and foreign trade.

Other issues that need to be pursued as recommended by the Golding Commission Report is the need to have a final determination as to whether domestic subsidies provided by a member of state relating to the supply of energy are in violation of the Caricom treaty.

As we move toward securing greater prosperity for our people, the creation of employment opportunities, and the increased production of goods and services in all sectors of the economy, we must focus on increased import substitution and export earnings.

THE GROWTH AGENDA

It is not by chance that most, if not all of the presentations in this sectoral debate have recognised and addressed the criticality of Jamaica's commitment to the furtherance of the growth agenda and our national vision for a better country.

Having achieved the mandate of putting the economy on the right track, we recognise that we must now grow the economy through production.

This is the greatest imperative now facing Jamaica. And as we grow the economy we appreciate that we must also pay the requisite attention to the social issues relating to health, education, social security, as well as national security and justice.

Our job as policymakers is not an easy one, but one that demands that through our policies and laws [that]we enable growth and development to improve people's lives and help them to achieve prosperity!

SUGAR LANDS

I have now received a report that shows that some 16,617.87 hectares are now being returned to the Government by Pan Caribbean Sugar Company.

Of this, 8,283 hectares are now in active sugar cane production, which makes potentially 8,359 hectares available for other agricultural activities — including 4,313 which are marginal and in need of rehabilitation.

Already the SCJ, Holdings is processing several requests for land by interested investors. In all of this we will give preference to investments embracing the mother farm/satellite farm concept, and our preferred mode of investment is lease hold rather than sale.

Mr Speaker, under my watch every square inch of these lands must be productively engaged.

SUGAR INDUSTRY

There is no going around it — sugar will not engage the kind of acreages it did in the past. Even utilising the full capacity of the Monymusk factory, we would only need about 7,000 hectares. The sugar industry is at a crossroads.

Pan Caribbean has given notice that it will not operate Monymusk next year. We in the Government are acutely aware of the huge investments made by cane farmers in this industry. Since the establishment of the Cane Expansion Fund Unit in December 2014, approximately $519 million has been approved for on-lending to farmers in the Monymusk factory area. Of this amount, $493 million has been disbursed to 93 farmers for cultivation of 404.96 hectares.

There is no way that this Government could sit idly by and allow this investment to be squandered with the closure of the factory.

We are therefore working with Pan Caribbean to facilitate joint ventures with new investors or an outright sale of the factory. We are aware that these initiatives might not materialise for the next crop, therefore, the Government will put in place measures to ensure that the cane grown in that area are processed by Appleton or Worthy Park, or both estates which, in each case, has excess capacity.

Cane farmers can therefore employ the necessary agronomic measures to secure the crop for next year.

At the same time, there is an inventory of some 30,000 tonnes of locally produced brown sugar that is not being absorbed by the local market. This is a development of recent vintage and points to the possible undermining of local brown sugar sales by duty-free, imported refined sugar. I know that this issue evokes considerable emotion, but I am determined to fix the regime for the importation of refined sugar so that locally produced sugar is not undermined. In this regard, I am in constructive consultation with the JMEA. (Jamaica Manufacturers and Exporters Association).

CANNABIS

Mr Speaker, one of the crops, indeed, one of industries that we are focused on is the cannabis industry. Mr Speaker, setting up the Cannabis Licensing Authority was necessary but not sufficient. Given the extraordinary size of this industry and its amazing pace of growth worldwide, we, frankly, need an all-of-government approach to set the framework to get this industry going. We are not short of people who want to invest. What we have not done, however, is to establish a clear regulatory framework to facilitate these investments. In this regard I have been working with my colleague minister of health, in whose ministry a Medicinal Cannabis Unit has now been established.

Together we have also established a working group to map the entire process, and clarify regulatory responsibilities, and fix all the issues of overlapping jurisdiction. We expect to get an action plan by the end of this month. At the same time, we have to apply some of these idle lands to this industry.

THE BLUE ECONOMY

We remain determined to exploit our endowment in the seas for the prosperity of this nation.

Jamaica, like many developing countries, must look beyond our shores in order to leverage the vast potential for economic growth and sustainable development. Now is the time to act in order to position ourselves properly to realise the benefits for sustainable development from the coming blue revolution.

In this regard, I am happy that this House has since advanced the debate on the Fisheries Bill, which is the key framework for unlocking the full potential of the blue economy.

JAMAICA AGRICULTURAL COMMODITIES REGULATORY AUTHORITY (JACRA)

I note, with interest, comments on the Jamaica Agricultural Commodities Regulatory Authority (JACRA) by the Opposition spokesman on agriculture.

It bears repeating that JACRA as a concept was born with the JLP Administration of 2007 – 2011, and has had the support of every administration since then. The intent of the legislation is to remove the Government from the commercial aspects of the coffee, cocoa, coconut and spices industries, and to set up a regulatory regime conducive to the rapid development of these crops, which still have enormous potential. While we concede that the legislation is not perfect, we have to hold firm to those provisions that seek to protect local production.

It is inexplicable, for instance, that high-mountain coffee production is only 5 per cent of what it was 20 years ago, while we continue to import staggering volumes of coffee.

In response to our stakeholders, I have ordered a comprehensive review of the legislation. The review has been completed and I will have that report by the end of the week, and thereafter I shall report to the nation what aspects of the JACRA legislation will be altered.

I further note the Opposition spokesman's reference to the linkages between agriculture and tourism.

The imperative for this linkage is impatient of debate. I have personally thrown myself into this endeavour and have already met with the minister of tourism and the Linkages Council.

One of the ways of strengthening this linkage is the very mother farm-satellite concept I spoke of earlier. However, we might have to consider tying the incentives received by the hotel sector to their willingness to engage local players.

We remain bullish about the agriculture sector and its potential to drive economic growth and job creation in this country.

In the first quarter, the sector grew by 0.5 per cent driven by a 2.1 per cent increase in the domestic food crop subsector. I am advised that the preliminary estimate for growth in the domestic food crop subsector for the second quarter is over 5 per cent.

MSME SECTOR

We continue to recognise the critical and strategic role of the MSME sector in growth and development.

We further recognise that this sector needs all the support from government in order to realise its potential. It is within this context that I am proud to table in this honourable House today, the updated MSME and Entrepreneurship Policy and Implementation Plan.

In furtherance of this, I have charged my team to accelerate all the initiatives dealing with the use of unclaimed funds in banks to fund MSMEs, as well as the expansion of JBDC's network through the Small Business Development Centre model.

The manufacturing strategy that I spoke to has now been completed and I will be taking same to Cabinet within this month.

I have also re-engaged the manufacturing sector and we are actively pursuing the provision of factory space in Kingston with the Factories Corporation of Jamaica. In this regard, I have engaged the prime minister in relation to handing over the AMC Complex to the FCJ with a view to rehabilitating that facility for the use of small exporters and processors.

The Opposition spokesman on industry and commerce, spoke to the need to have “broader, more inclusive growth with jobs” take place.

I fully agree with him and that is why I speak to engaging our idle lands; that is why we are supporting MSMEs; that is why, we are tying small farmers to larger mother farms; that is why since this debate opened, we have tabled the regulations that make special and deferential treatment to our MSMEs in respect of government procurement.

All of this will ensure that the growth is inclusive and the small man is not left behind.

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