Govt has put $1.6B back into farmers’ pockets – Agri Minister

– through removal of VAT, reduced land rental & DNI charges

After the People’s Progressive Party/Civic (PPP/C) took office in August last year, it set about rolling back many oppressive measures foisted on the backs of farmers by the former Government. In fact, the Government has so far saved farmers $1.6 billion based on these agriculture-friendly policies.

This assertion was made by Agriculture Minister Zulfikar Mustapha, who recently recounted how the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government increased land rental fees and applied Value Added Tax (VAT) on a number of items used for agriculture, including machinery.
“Those measures were very harsh on the farmers. So, when the farmers went to farm, they had to pay VAT for certain things. They had to pay increased land rentals and DNI charges. So, what we did, we recognised that for the farmers to improve their lot, we have to ensure that we put the sector in order,” he said.
“When we were in the Opposition, we said we would reduce the DNI and land rental charges from $7000 to $3000. We did that when we were in Parliament. So, a farmer that farmed 15,000 acres and obtains $15,000 per acre, that farmer is today saving $11,500 per acre. The DNI charges and land rentals, we have put back into the pockets of the farmers $1.6 billion. Then took out VAT and all those things.”
Mustapha gave as an example one farmer who imported a tractor prior to the change of Government and was forced to pay $500,000 in VAT. Mustapha noted that if this was done after the People’s Progressive Party (PPP) tax measures, that VAT would have been avoided, since the tractor was for agricultural purposes.
“With the measures we have put in places, farmers will have more money that becomes disposable income in their pockets. So that is why we’re seeing an improvement, not only in the rice sector but other crops.”
“In the other crops we are making more lands available, we are giving farmers help in terms of extension services. We are making them do farming in a smarter way, rather than a subsistence way. GMC (Guyana Marketing Corporation) is more responsive now to the needs of the farmer,” he said, noting that based on this year’s budgetary allocation for agriculture there will be nine agro processing facilities across the country.
For 2020, Guyana saw increases in various sub-sectors of the agriculture sector. While sugar production fell, rice production increased. The rice-growing sector grew by 4.8 per cent, with paddy production reaching 1,057,580 tonnes in 2020. With respect to the production of other crops, despite excessive rainfall in November and December, this sector is estimated to have grown by 6.6 per cent in 2020.
The payment of drainage and irrigation charges by farmers to the MMA-ADA is a critical part of the operational capacity of the entity. Under the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, these charges were hiked.
The situation was so dire under the former Government that farmers were unable to pay the increased charges for drainage and irrigation services were under the threat of legal action from the Mahaica Mahaicony Abary-Agricultural Development Authority (MMA-ADA).
When the PPP got into Government, it reduced those charges from $15,000 per acre to $3500. It was announced earlier this year that with these charges reduced, farmers have begun honouring their financial obligations to MMA.
Despite the flooding at the time, which has been acknowledged as a national disaster as declared by President Dr Irfaan Ali, the MMA-ADA had reported in July that its rate collection from farmers for the first half of the year was at an all-time high – with 55 per cent of the year’s projected collection already received from farmers.