Damion Mitchell, News Coordinator - Radio
Left: Allan Rickards ... wants 75 per cent property tax derating on agricultural lands. "That 50 per cent is foolishess." - RUDOLPH BROWN/CHIEF PHOTOGRAPHER
Right: A worker at the 300-acre Green Produce Farm in Claremont, St. Ann, owned by Patricia Isaacs-Green, reaping giant-size sweet peppers. - IAN ALLEN/STAFF PHOTOGRAPHER
Today, we continue our special 12-month comprehensive coverage of agriculture, a vital part of the Jamaican economy.
This is a sector which employs thousands, a sector which has the potential to transform our rural economy, a sector which can create vast opportunities for new jobs. But, this is a sector which does not get the attention it deserves.
Henry Rainford, head of the Jamaica Livestock Association, feels that "agriculture is an area in which we can solve a lot of the social problems that we have in this country; the drift of the rural population into the city, and all these young people that are idle out there. We have idle lands; and idle hands, we need to find the formula to put them to work."
Over the next 12 months, we hope to highlight these and other issues, at the same time putting possible solutions in the public arena for discussion and action in our quest to achieve lasting rural development. Agriculture is a sector that we must transform if we are to achieve significant rural development and create the environment for a better standard of living for more of our people.
We welcome your thoughts and suggestions. Email us at editor@gleanerjm.com; fax 922-6223; or write to: Agriculture Coordinator, The Gleaner Company Ltd., P.O. Box 40, 7 North Street, Kingston.
SEVERAL KEY agricultural interests have identified the current rate of property tax on agricultural lands as a major setback to investments in the sector.
In fact, at least one stakeholder is warning that the industry could further decline if the Government fails to swiftly reduce the rate.
SWIFT MOVEMENT NEEDED
Chairman of the All-Island Jamaica Cane Farmers Association, Allan Rickards, wants the Government to move swiftly to impose a 75 per cent derating on agricultural lands. "This 50 per cent is foolishness," he asserted.
According to information from the Inland Revenue Department (IRD), in the 1990s, the derating for agricultural lands was increased from 25 per cent to 50 per cent. This means farmers now only pay half the regular amount for property taxes on lands used for agricultural purposes, once they have received approval through the Tax Department.
But several farmers and agricultural interests contend that this rate is still too high.
"I paid quite a bit of money last year on property taxes and if I had that amount of money to put in the farm, I would gladly do it," said Patricia Isaacs-Green, operator of Green Produce Farm in Claremont, St. Ann.
Mrs. Isaacs-Green owns 300 acres of lands in the northern parish, but at present is only able to cultivate 68 acres in citrus and green produce. She wants to expand technologies in hydroponics to increase production to at least 88 acres this year. However, according to Mrs. Isaacs-Green, her dream appears retarded.
"I want to put a lot more in, but as I expand production area I have to expand on security which is an additional cost," she says.
Mrs. Isaacs Green is suggesting that for at least two years, initially, the government allows farmers to divert portions of property taxes into expanding agricultural production once farmers attain increased production levels.
BIG DISINCENTIVE
For more than 30 years, Mandeville based exporter Garfield Thomas has been involved in the agricultural export trade. The success of his business depends significantly on the production of small farmers, hence his sympathy for the farmers whom he believes, are 'burdened' by property taxes.
"Agriculture has been ruined and rural Jamaica is now improvised," he argued. "Property tax is a big disincentive." Given that land is the basis of farming, he said it should not be subjected to high taxation. Against this background, Mr. Thomas is forecasting that the government should expect even more difficulties in earning tax revenues.
"When the tax is fair and affordable, people pay it, when it's killing them they're going to find all means of avoiding it," he charged, adding that the government should consider a de-rating of 90 per cent on agricultural lands.
ENTERPRISE ZONES
Meanwhile, Dr. Marshall Hall, managing director of Jamaica Producers Group, says although the level of property taxes may be a disincentive to land acquisition it has not been the case for his company.
But, according to Dr. Hall, the government must now look seriously at using agriculture as an engine for growth, especially in underdeveloped communities.
He is proposing that 'enterprise zones' be created in these communities, where persons investing in agriculture may have their tax payments returned at the end of a three-year period once their businesses have succeeded.
"It is encouraging investment without an initial outlay by the State, and that's a good thing for Jamaica," he said.
President of the Jamaica Agricultural Society (JAS), Senator Norman Grant, agrees with Dr. Hall's suggestion, but he wants tax payments returned at the end of between five to 10 years.
According to him, it is important that the sector is given adequate opportunity for recovery in the event of unexpected shocks such as hurricanes and drought. Senator Grant told The Gleaner that the JAS is currently preparing a comprehensive agricultural plan, which addresses the issue of property taxes and emphasised that there were serious concerns where the property taxes for traditional farmlands are inflated with commercial and residential developments in the respective communities. Mr. Rickards says he too is concerned that a consistent increase in property taxes will result in agricultural lands attracting higher market prices and ultimately higher property taxes.
And he is warning that his association, among others, will be intensifying lobby to have the property for agricultural lands de-rated to 75 per cent. More than a year ago, the All Island Jamaica Cane Farmers Association, along with several farmers' organisations, wrote to the Finance Ministry requesting a further de-rating. But he says the government is yet to respond. "This is part of a series of things that indicate to us that the Government is not sympathetic to agriculture," he charged.
