Thumbs down to tax hikeFarmers want new marketing principles [Archives:2005/829/Business & Economy]
Gauging Yemeni farmers' reaction to the government's planned sales tax hike, some say it will damage the government's move to promote agricultural products, even though the farmers will have certain exemptions on agricultural materials.
Farmers believe that the government needs to adopt an agricultural policy that fosters product exportation, cut their tax burdens, improve the agricultural production sector, and increase loans to help achieve the following goals of agricultural development.
First: Create conditions that boost agriculture workers' stability and return of unemployed to grow their land and increase production.
Second: establish new centers close to agricultural lands, which ensure cost-effective transportation of products to export terminals.
Third: Support scientific research in the agricultural sector to identify reclaimable lands and provide necessary support for agriculture.
Fourth: Set up a step-by-step plan to limit qat shrub proliferation over fertile agricultural lands.
Fifth: Bolster investment in food industries which depend on agricultural products and modern preservation technology.
Farmers confirm that development of agricultural products in neighboring markets need to take care of agriculture, and reconsider facilities granted to investors so that they get more involved in production and construction of dams and water barriers.
They are also of the opinion that the intended stoppage of diesel subsidization will further push local agriculture backwards, and hit farmers' resources and their income.
To bring evidence that the tax hike and unsubsidized diesel are detrimental, farmers affirm that agricultural products volume will decrease by 25 per cent. For instance, Yemen will lose some YR 1.5 billion of the whole amount (YR 6 billion) of products exported through Haradh outpost, through which 109,000 tons of vegetables were exported in 2004.
They add that there are other technical problems in terms of services, packaging and means of transportation, all of which hamper the development of agricultural export. They call on the government to do its best to eliminate them and not to further add to them by enacting new taxes and unsubsidizing diesel.
They request agricultural committees set up under cabinet's decree for the years 2003-2004 regarding regulation and development of agricultural exports to hastily implement the local and external agricultural marketing policy.
Farmers criticize these committees on the basis that their functions are limited to certain tasks and distributed their responsibilities over specific agricultural, marketing and exporting zones. These committees, farmers say, have not helped agriculture workers to increase production and improve quality.
According to information gleaned from the field, it is needed to set up a work program regulating the works of agricultural subcommittees and reinforce the institutional aspect of quality control and agricultural exports regulation, as well as facilitate the marketing of production locally.
Interest in the agricultural aspect will inevitably help strengthen stability of the workforce in agricultural areas and alleviate unemployment among able-bodied people.
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