Truth about rise in chicken prices

THE EDITOR: Your editorial of today’s Newsday, Friday July 11, 2003 under the headline ‘Chicken men cry foul,” was indeed surprising. The first paragraph is incorrect. At the time that the call for a boycott was made, that is on June 26, 2003, chicken prices had been increasing on a weekly basis, after having been increased from $2.48 in January 2003 to $3.52 in April 2003.

The Consumer Affairs Division, based on their regular monitoring of the situation had been receiving reports from supermarkets and pluck shop owners that producers had been increasing prices on a weekly basis; this fact was widely reported in the media. When the increase occurred in April 2003, the same reasons were given that are now being mooted. At that time the Minister of Legal Affairs called for a meeting with the producers which they failed to attend. Additionally, at the time of that increase, a representative of Nutrimix and an officer of the Consumer Affairs Division of the Ministry of Legal Affairs were guests of the TTT morning programme discussing the increase. Therefore, my secretary was quite correct in response to your reporter’s query when she said that I was awaiting a report from the Consumer Affairs division. They were investigating the claims made in an advertisement which appeared in the Trinidad Guardian of July 09, 2003. It would have been highly irresponsible of me as a Minister of the Government to respond to strong allegations about the Government without getting the facts from the various State agencies who were accused by Nutrimix of being responsible for the increase in chicken prices. Having received the report, permit me to set the record straight.

1) PLIPDECO Land Rental
PLIPDECO has indicated that Nutrimix has two five-year leases, one from 1995 and the other in 1997. There is a clause in the terms and conditions of the lease including the rental which states that the lease would be reviewed every five years. The impression given by Nutrimix in the advertisement was that this was a monthly increase.
2) Minimum Wage
There has been 14.3 percent increase in the minimum wage level and this has been effected since January 2003.
It should be noted however that the majority of chicken produced by Nutrimix are contracted out to farmers for which the farmers are paid $1.50 per bird. While it might be acknowledged that the wage bill is effected in the processing of chicken, this factor was not considered in April 2003 as an increased cost.
3) National Gas Company
Natural Gas — Gas price represents less than 1.0 percent of the total operating cost of a poultry processing plant. In addition gas prices have only gone up once for the year in January, yet the chicken price is going up weekly.
4) Electricity
It is misleading to indicate that electricity costs have increased by 9.95 percent when in fact, owing to the downward movement in the exchange rate regime; the net effect of the increase is 1 percent increase per unit of energy and a 4.1 percent increase in the bill paid by Nutrimix from May 2002 to 2003.
5) Grain Prices
The Consumer Affairs Division received information both from the foreign manufacturers and National Flour Mills and the findings were as follows:-
The price of feed increased by 1.3 percent and 1.2 percent in the case of Broiler Starter and Finisher respectively, while the price of corn remained the same, additionally, there were significant decreases in the price of grain, in particular corn 7.3 percent and soyabean meal decreased 4.6 percent, wheat middling increased by 4.3 percent.
NFM’s Ex Mill prices and the freight on board prices for Corn/Soya Meal for the period 2002/2003 were as follows:
Ex Mill Price Corn — 12.6 percent increase and not 25.77 percent as stated by Nutrimix
Ex Mill Price Soya Meal — 4.9 percent increase and not 41.13 percent as stated by Nutrimix
6) Ocean Freight

The Nutrimix advertisement indicated that ocean freight for feed and grain had increased by 51 percent from the corresponding period in June 2002. This claim is supported by a letter from Maple Leaf Foods International indicating same. It should be noted that the letter which indicated a price increase in June 2003 was dated July 04, 2003 after the Minister had asked the question on “what increases in freight.” May I suggest that your newspaper may attempt to contact Mr David Harvey of Maple Leaf International at either 416-480-6420. Facsimile 416-480-6426 (Monday and Friday) or 905-333-2966, Facsimile 905-333-2941 (Tuesday — Thursday), in circumstances where officers of the Consumer Affairs Division have been unable to do so. NFM has indicated that there has been a minimal increase in freight charges over the last year. In any event, I am sure you are aware that Maple Lead International of Canada is not a state agency, nor does the State have any agencies that operate ocean freight liners.

Plastic and Packaging Material and Lubricants
The increase in the cost of these items was one of the reasons why in April, 2003 Nutrimix had adjusted prices. Since April 2003 to the present, there have been no further increases in the cost of plastic and packaging and lubricants, the Government has nothing to do with these costs.

Bread prices
Regarding the bakers it may be interesting to note that when the price of flour was increased, the Minister of Legal Affairs, Consumer Affairs Division had a meeting with the bakers who cited the increase in the price of flour as the reason for higher prices of flour-based products. It is noteworthy that within two weeks of that increase, bread prices went up and the Minister of Legal Affairs gave the undertaking that once wheat prices decreased it would be impressed upon NFM that the consumers should benefit from a concomitant decrease in flour prices, with which NFM agreed. The decrease occurred but there was no resultant decrease in flour based products. In fact the bakers are now citing other reasons for maintaining their prices. It is therefore patently obvious that the Minister’s reaction was not emotional, but based on fact. As Minister of Legal Affairs with responsibility for ensuring the empowerment and protection of consumers, I will continue to advocate on their behalf, particularly when food prices appear to be increasing without justification.

HON CAMILLE
ROBINSON-REGIS MP
Minister of Legal Affairs