With further increases in food prices, gov’t moving to cushion impact

Food prices are expected to rise even further because of the Ukraine-Russia crisis but President Dr. Irfaan Ali said that the government is working to finalise a $5 billion sum to cushion the surge in prices, while examining other solutions.

With Russia’s invasion of Ukraine, there have been several economic consequences. Already, Barbadian Prime Minister Mia Mottley cautioned that the crisis would worsen the rising cost of food and other commodities that started with the COVID-19 pandemic.

President Ali, during a press conference on Sunday, explained also that the crisis is expected to affect the cost of fertilisers, shipping and generally, input costs for local food production.

“So an already volatile situation is even more critically affected,” President Ali lamented.

He, however, noted that the government has already started to examine several solutions to cushion the impact of the price surge on producers and consumers.

Already, the government set aside a sum of $5 billion in the 2022 National Budget to fund interventions to cushion the rising food prices.

President Ali said that the government is yet to finalise how this sum will be used but hastened to add that consultations on the sum’s use have already started.

The government also announced moves to extend the freight cost adjustment in 2021 to the cost of some $6 billion in addition to reducing the price of fuel. These measures are already in effect.

With these measures, it is expected that the rise in food prices will be less harsh on consumers. Even so, however, President Ali said that efforts have to be made to counter Guyana’s and the Caribbean’s vulnerability to these external shocks.

He said that reducing the amount of money spent to transport imported goods is one consideration. This can be done by deepening the Demerara River, which leads to Guyana’s main port (Georgetown), to allow for larger vessels to bring products instead of utilising several smaller vessels.

“With what is happening in Ukraine, the logistics issue would even get worse because there are even sanctions on the airspace and all of these things.

“So we are working on a strategy, how we address the input costs and support the initiatives at the input level and then at the consumer level and the market level,” President Ali explained.

Even further, President Ali said that the regional thrust to boost food security– led by Guyana- will help to promote Caribbean countries from rising costs internationally.