By Kurt Reynolds
Currently, planet Earth is facing a crisis. The world is battling with the hard fact that it can only provide food for 60 percent of its population. It is grappling to face the issues surrounding the sudden capability of large nation territories like China and India, to purchase huge quantities of food.
The Asian territories have surfaced as major competitors on the world market in just under a decade, with one fifth of the entire world population existing in these two territories. The pressures now being faced by the US and UK should disabuse the perception that we are a world unto ourselves and will always be shielded from the impact of what is experienced by larger states. The hard cold fact that we are all interconnected has begun to hit home—hard!
Just last week, Barbadians were being told to dig deeper into their pockets to pay for meat, milk, and poultry products, resulting from the rising cost of animal feed. Then the Barbados PM approached Parliament for nearly $60, 000 as a subsidy to appease the rising cost of flour—for one month! Estimates show that it will cost the Bajan government $62 million to subsidize flour for one year.
At home the situation is no different. The UWP government seems headlocked trying to find methods to control the prices of goods—some of which are considered to be "tying the hands of retailers." Already, the subsidy on LPG has been lifted, sending the price at the pumps to $12.75. But, businessman Michael Chastanet says the hike in LPG was unavoidable and adds that as far as he can see, "things are going to get worse."
Chastanet, who is the CEO of Consolidated Foods Limited, insists his problems with various government initiatives are not personal. He says he isn’t one to criticize without offering solutions; and the one he proposes, will benefit the entire region in the long term.
"All the Caribbean governments need to get together and go to the World Bank. Look at Guyana—which is twice the size of England—that has thousands of acres of land available. They should find out which crop is best and Guyana could become the bread basket for St Lucia," he told the STAR.
"If government adopts the attitude of wanting to put price controls, it will affect the service, as well as the quantity and quality of goods," said Chastanet. He explained that CARICOM’s plan to remove the Common External Tariff would have no bearing on the cost of goods because oil has already increased and import price with it. Thus rendering the prices of goods higher.
"A supermarket cannot operate without a profit because we have our staff to pay, electricity and telephone bills. If the profit margin cannot compensate for those expenses, then we will find ourselves in dire economic straits, which would lead to the collapse of our supermarkets," he said. The businessman said that most people have the perception that once you’re buying and selling, a profit is being made, but that is not the case. He said no business could survive without making a profit, including government. Chastanet said he knows "the government has good intentions and would like to see prices either reduced or stabilized."
Local businessmen now have to deal with the latest bill, read in the House last Tuesday. The Price Amendment Act will see the formation of a committee, whose sole task will be to go into wholesalers properties and retrieve relevant information whenever necessary. Their aim is to ensure that wholesalers are selling at the correct prices to retail outlets.
Chastanet said that wholesalers do place a mark-up on the goods sold to retailers for the simple reason of making a profit. He said there are obligations, which wholesalers must meet and given the decades of their existence, most companies know what the costs must be in order to survive. "The government can do whatever they want, they have the power to do so. The problem that comes is that at the end of the day, nobody can make us sell what we don’t want to sell. So if we are losing money on those items, they will just have to import them themselves," he said.
Chastanet said that he believes if the government keeps the basket of goods to a limited 22, that his company would be willing to bear the shortfall. He reminded that the impact would not only be felt by Super J, but all of the other major partners. "If it goes above 22 it will be difficult for us. You must remember too, that we are not the only supermarkets.
A lot of people underestimate Glace Motors, Dilly’s and Ultramart, because in their little ways, they have tremendous sales. You then have Peter and Company, Wet and Cold Express, Bryden and Partners and Renwick, so we are not the only ones importing. People have this fallacy that there is a monopoly; there is no monopoly. Government has never stopped any investor from coming here," he said.
"My advice to St Lucians is to exercise a lot more caution when buying things and watch your money. You don’t have to buy all the things you do," he said. According to Chastanet, "the only way to deal with this situation is that we ourselves have to start cutting back and being more frugal in the things that we buy and the things that we want to eat."
"It’s like people buying a car; years ago a person would want to buy a cheap car, but look at the number of BMWs we have today. This is a democratic world and people can do what they want, but they have to understand that the world has changed at a very fast rate," he said.
As it relates to supplying the local demand, Chastanet said when his company orders certain products, he is told to call back in four months to find out the available quantity and the current price. He added that there are other options available to buyers to purchase cheaper products, but archaic policies prohibit their doing so. "There is good meat on the market at $45 a pound. We will not dare bring meat at $45 a pound because we will be slaughtered. So we have to go for a quality slightly below that, so that we can at least allow individuals to be able to buy it at a price they can afford," he said.
"One thing we need to do, the government through its various ministries, in particular the ministry of health, they need to do some serious exploring of areas that can in fact provide us with meats or poultry, places like Brazil and Panama and clear the air as to the quality. Make sure they are not infected in any way. Because you can in fact get stuff from Brazil and Panama, meats and chicken, at a lower price than the united states. But because of the health factor, which is an antiquated law, nothing has been done about it," he said.
Confirmation with the Ministry of health proved that the bans are place on territories where there are confirmed diseases present, including foot and mouth, mad cow and bird flu. Panama is among the banned nations. However the ministry advised that not because a country isn’t on their list that it isn’t banned. "If somebody wants to import something from a country we do the research. We have an international web site where we check for past outbreaks," said the Vet officer.