Animal feed subsidies end by September 15 |24 August 2023

Farmers will no longer benefit from animal feed subsidies as of September 15 (Photo: Seychelles NATION archives)

Farmers will no longer benefit from animal feed subsidies as of September 15, as government is gradually phasing out the support measure.

The policy to subsidise animal feed was enforced in 2020, as the Covid-19 pandemic and related economic implications resulted in soaring commodity prices across the globe.

Principal secretary for agriculture, Keven Nancy noted yesterday during a press conference at the Espace building, that a 25 percent reduction in subsidies became effective on August 15, and by September 1, this will further reduce to 50 percent.

To mitigate the impact of the decision, the department of agriculture has put in place additional measures to support local production. This is through the importation of animal feed, which is expected to bring about more competition in the market, and align local prices with those of the global market.

Despite improvements in the cost of raw materials and shipping, as well as stability on the foreign exchange market in the wake of the pandemic, there has not been any price reductions on the local market. There are presently three suppliers of animal feed in the local market.

Director general for National Planning in the Ministry of Finance, National Planning and Trade, Lenny Palit explained that among government’s priorities, in line with the National Development Strategy (NDS) are to meet production targets by 2030.

“If things were to continue as it is, that is maintain the status quo, we expect that animal feed subsidies would amount to around R100 million this year. But if we consider the long term, and we continue on with the same model, there is an estimation of R400 to 500 million to meet these targets. Frankly, this is not sustainable from a financial perspective and puts us at risk to external developments,” Mr Palit stated.

The decision is but one of the steps towards meeting government’s targets towards improving food security, in the face of external developments and possible shocks, coupled with climate change and its possible disastrous effects on the sector.

“There are also certain risks with the agricultural sector as it is today; as if it is financially viable. One does not count in business if it is not financially viable in the long term, and if it is not generating gains,” Mr Palit added.

Government is engaged in finding means to boost consumption of locally produced commodities among the population, and importantly, the tourism industry, he said.

The agriculture department announced its partnership with the Seychelles Trading Company (STC) to ease the importation of animal feed in May, stating that they will work together to import and sell animal feed, for an initial period of 6 to 12 months, or until there is an improvement on the domestic market.

The agriculture department has been allocated appropriate storage facilities at Providence. The undertaking will be of no additional cost to government, but will instead generate a profit.

Minister for Agriculture, Climate Change and Environment Flavien Joubert informed the National Assembly in July, that the first consignment of 342 tonnes of animal feed for livestock and poultry production will arrive in the country from South Africa by August 15.

 Other subsidies to the sector remain unaffected, including the subsidy on transportation between the inner islands. 

Laura Pillay