The Ailing Food Industry

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Produce what we consume and consume what we produce, a statement which, despite having been echoed through different generations, has remained relatively void. Since the 1980s, attention has been drawn on the importance of being a self-sufficient nation, but forty years later we are still wandering aimlessly around the subject. A sense of inactiveness can be felt every time we gaze helplessly at the haunting price of imported products. Furthermore, an increase of 46.4% on our food consumption was revealed by the Household Budget Survey (2023), around 5% to 8% increase each year. 


Unsurprisingly, the VAT collected per year by the state follows the same ascending trend. Nevertheless, the rise in our food consumption is not the only factor contributing to the increase in VAT collected. One of the many factors is also due to the fact that imported products are being taxed on the CIF system. In other words, imported products are taxed on the gross amount resulting from the addition of its Cost, Insurance and Freight. Consequently, any increase in any of the latter three will have a snowball effect amounting to an increase in VAT.


Unfortunately, we are at the mercy of external factors like war or climate conditions which definitely impact on the cost and freight of imported products. Moreover, as rightly contended by some economists, the status of our country as the Star and Key of the Indian Ocean is being largely eroded due to the ineffective and inefficient operating system of our port. In the past, our port used to be a major transiting area for large vessels, and therefore the cost to ship our imported products were relatively affordable. Nowadays, port like Tamatave is offering a more competitive service in the region and is being adopted as a natural transit for many vessels. Thus, if these vessels have to ship our products, they have to deviate from their habitual route, thus increasing the cost to freight our products.



These issues could have been dealt with if appropriate measures were implemented to consolidate our food production capacity. On the contrary, large portions of arable land are being replaced by concrete, leaving our food production sector under artificial respiration. By this time, we, the population, are being strangled under the price of food commodities.


Mouvish Jhummun


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