Maravi

Economist urges govt to waive duty on food imports

Economist urges govt to waive duty on food imports
By Mutuna Chanda
Wednesday April 16, 2008 [04:00]

THE government should consider reducing taxes or waiving duty on essential food imports so that prices are generally kept low, economist Jack Zulu has said. And Zulu has said Southern Africa Development Community (SADC) governments have an obligation to insulate their populations, especially the poor, from exploitative market distortions in view of the high food prices.

In response to a press query ahead of the SADC consultative conference on poverty slated for this weekend in Mauritius, Zulu who is former Jubilee Zambia policy analyst stated that reducing taxes or waiving duty on essential food imports had more social benefits to Zambia than the considered cost.

“This should be carefully weighed against domestic market conditions so that local farmers are not disadvantaged by the likely influx of cheap food imports,” Zulu stated. “From a purely economic point of view, removing duty or lowering taxes on food imports has dampening fiscal implications on the national treasury through foregone revenues.

However, in the current circumstances it is a necessary evil or short-term pain for long-term relief as its social benefits are likely to outweigh its social costs to the nation.”

And Zulu warned that the global agenda of reducing extreme hunger and poverty was likely to be thrown off course if nothing was done to arrest the rising food prices.

“At the heart of current soaring food prices, among other factors, is the bio-fuel programme which has caused diversion of farmland use from food production to more lucrative fuel crops. The phenomenal price increases of bio-fuels as well as those of fossil fuels in recent months have seriously affected the food prices across the globe,” Zulu stated.

“Without exaggerating anything, the world is sitting on a time bomb as evidenced by serious shortages of rice, wheat and maize - the staple food for more than two-thirds of the world’s population. “

Zulu stated that the SADC’s own vulnerability assessment on food security showed that the region was still plagued with “undesirable levels of chronic vulnerability and food insecurity”.

Labels: FOOD

posted by MrK @ 4:26 AM