Daraine Luton, Staff Reporter

Davies

DR OMAR Davies, the man who headed the country's treasury for 14 years during the People's National Party (PNP) 18-year reign in govern-ment, says the Bruce Golding administration must boost agri-cultural production to protect the country from a full impact of the global financial meltdown.

"A subsidy on some fertiliser is relatively cheap and would make a big difference for small farmers," Davies tells The Gleaner.

Since January, the Govern-ment has spent approximately $125 million to subsidise the commodity.

Cheaper fertiliser

The cost of fertiliser has escalated by 100 per cent during this period. Currently, the most popular grades of fertiliser are being retailed for about $7,000.

In a move to provide cheaper fertiliser in the marketplace, the Government has taken steps to import the commodity.

The first shipment, of some 3,000 tonnes is expected on the island by mid-October out of Miami, Florida.

He says that if he were finance minister today, supporting agri-cultural production would be a major thrust, but he notes that he could not do it on this current budget, which he says is not credible.

"I have pointed out that the assumptions for inflation were wrong, the assumptions in terms of the wage settlements were wrong ... the first thing I would do is to come with a clear statement on what the budget is and what is possible," Davies says.

10.3 per cent inflation

Jamaica's $489.5-billion budget was predicated on an inflation rate of between eight and nine per cent. That, however, has been changed to between 14 and 15 per cent after inflation for the fiscal year as at August shot to 10.3 per cent, according to the Planning Institute of Jamaica data.

Domestic production

Davies says it is important that the Government move to stabilise domestic production as it mitigates against other social problems.

"The last thing you want them to do, for production and for social stability and the employment, is to have them withdrawing from farming," Davies says.

With leading world economies contracting and the US heading for a recession, Prime Minister Bruce Golding has admitted that Jamaica may be affected by decreasing global conditions.

Golding says that remittances, which amount to some $2 billion annually, will come under stress as Jamaicans are affected by the economic situation, especially in the US from which 65 per cent of our remittances are derived.

Brand Jamaica

He also says that tourism arrivals would also be affected as travel-lers, especially from the US, will be inclined to cut back on dis-cretionary expenditure. How-ever, the prime minister said that he does not anticipate a net decline because of the strength of brand Jamaica.

The Opposition, meanwhile, remains unconvinced. It contends that the Government is down-playing the impact of the US recession.

Davies, who is the opposition spokesman on finance, has called for a full debate in the House of Representatives.

In the meantime, though, he says that there is an urgent need for Government to table the supplementary estimates, which will show revised projected spending and revenues in the economy.