The social compact Government designed to give consumers an ease from rising food prices has turned into a disaster for the poultry sector, with stakeholders painting a dismal picture of the industry.
So dire is the current state of affairs that scores of farmers have shut down their operations, cancelling orders while hundreds of birds at the island’s main hatchery have had to be euthanised.
Officials told Barbados TODAY the situation has driven mostly small farmers out of business, noting that they make up 40 per cent of the industry.
In fact, chief executive officer of the Barbados Agricultural Society (BAS) James Paul said the poultry component of the compact “had no practical application in the context of how business is done”, even though Minister of Agriculture Indar Weir maintained that the small farmers never subscribed to the agreement in the first place. He, however, promised that Government would step in with some assistance.
Weir gave the assurance that Government would intervene and provide some level of support by way of training or technical support.
The island’s major poultry producers agreed that from August 19 to January 31, they would sell their products at ten per cent off the market value.
Paul said this resulted in significant disruptions and off balanced market prices to the detriment of the small man.
“That cannot work. That has no practical application in the context of how business is done. Once a price is afforded to one consumer other consumers will want it. You cannot say to one group of persons that they can get that price but they should buy at this price, it is just not practical,” he said.
“You are going to have to let the market forces determine the price at which the commodity will be traded. Once you interfere with it, it is going to cause disruptions and this is what has happened. It has meant that smaller growers are put at an immediate disadvantage because people will ask for them to match the prices [the larger growers] are meeting. It is not practical to think that you can segment the market like that.”
Weir insisted that the small farmers had nothing to do with the arrangement but said he was aware of the challenges they were experiencing.
“They have not been part of a compact, they didn’t sign on or agree to anything but they are now having to compete with larger producers because the supermarkets and retailers are treating them the same as they are treating the larger producers, who are in the compact. It makes it very difficult for them to be able to continue to guarantee a price that they were getting. So it has resulted in reduced margins for them because in order for them to remain competitive they were forced to reduce their prices.”
Weir also pleaded with small farmers to participate in stakeholder meetings facilitated by Government to ensure they have some input in the discussions.
However, Paul said small farmers were feeling the pinch and were at their wit’s end. So much so, he said they halted their operations and were forced to cancel chick orders.
“Some people have already cancelled orders recognising that they were not making money on previous placements so they have decided that until things return to some measure of normalcy, they cannot continue at the current prices.”
Last month, the heads of both the Barbados Private Sector Association and the Barbados Chamber of Commerce and Industry said they were willing to participate in talks to extend the compact.
Against that background, Paul said that there was going to be a major poultry industry meeting on Saturday to determine if the compact was viable to the industry overall and to discuss other outstanding matters.
Managing director of Gale’s Agro Products Barry Gale confirmed that he was losing thousands of dollars due to cancellations.
“We are facing a lot of cancellations from small farmers. It is certainly having an impact on my business because we are down in sales because the small farmers are struggling to make ends meet,” he said. “For the most part the large processors try to take them on and grow them and process them into the market but we have had to cut our egg orders [overseas] so we don’t produce so many chicks.”
At the onset of the outbreak of COVID-19 in Barbados, Gale reported that the uncertainties in the market led to several cancellations and as many as 50 000 chicks were euthanised in one week.
Asked if he had to dispose of any chicks this time around Gale said: “Not to that scale, not 50 000 in one week, but we have had weeks over the last six months where we have had surplus chicks that we didn’t know what to do with them because the farmers that ordered them couldn’t buy them or didn’t have anywhere to put them”.
He added that he also partnered with Government in an initiative that saw disadvantaged people being provided with chicks to help them grow their own food and this was another way he got rid of the surplus chicks.