Algeria drops duties and VAT on poultry inputs

29-08-2012 | | |
Algeria drops duties and VAT on poultry inputs

To help the poultry sector the Algerian government has decided to exempt inputs (raw materials) and finished products in the poultry industry from customs duties and VAT.

In doing so, the government wanted, above all, to reassure the producers who are badly affected by the sudden soaring prices of corn and soybeans on the international market.

During the last meeting they held at the Ministry of Agriculture and Rural Development, poultry farmers primarily responsible for the sector had expressed their concerns, calling for abolition of VAT and all taxes imposed on products affected by increases in the market so, they said, to stabilize the price of chicken.

Now that the decision has been made, it is not sure if the price of white meat will fall in the short term, because the government had already taken similar measures in the past, without resulting in stopping the rising price of chicken, particularly during religious festivals.

Just on the eve of Ramadan, Algeria has imported large quantities of frozen chicken to try to curb the outbreak, but the price of chicken has continued to rise, reaching 400 dinars (€3.95) per kg in July.

Also the frozen chicken was not visible everywhere, and those who were lucky enough to find it, have paid dearly, in any case much more than 250 dinars (€2.47) that had been set.

Addressing the Interprofessional Council of the poultry last week, Agriculture Minister Rachid Benaissa said that “the national community through the government has taken a series of measures to safeguard the sector, namely the exemption of customs duties and VAT for corn, soybeans and other feeds, as well as finished products for the period from September 1, 2012 August 1, 2013.”

Suppliers are requested to ensure an adequate supply of the market and to keep the price of chicken around 250 dinars (€2.47) per kilogram until that date.

Benaissa does not exclude the possibility of extending the measure if the objectives are met and satisfactory results are achieved.

This measure is mainly of interest to importers and producers of commodities and therefore the results depend on their achievements.

The poultry sector in Algeria is plagued by parasites and profiteers in all layers, who raise price of chicken prices with poor quality feed which affects the cost of white meat.

According to some estimates Algerian poultry use currently 3.5 kg of feed, against about 2 kg for developed countries. Even in Tunisia and Morocco less feed is used.

Also modernization of buildings and improvements in farming conditions are desired to boost and develop the sector.

Finally, the poultry sector is pledged to unite “to act in synergy to create common interest groups, necessary for the sustainability of the sector,” Benaissa said.