
Minister Ennis THE breeding industry is becoming less and less viable from the financial and other aspects. To say that it is in travail would be an understatement as it moves inexorably to certain demise year after year, if remedial steps are not taken to reverse the trend.
The foregoing state of affairs was starkly in evidence at the Yearling Sale held recently at Caymanas Park. And in the opinion of a large count of business people and others in attendance it was a disaster that indicated a crisis.
The sale, promoted by the Thoroughbred Owners and Breeders Association of Jamaica and sponsored by Red Stripe Beer was low-keyed.A total of $21.8 million emerged from the day's trading, an amount which fell substantially short of the $31.39 million earned in 1998 (a record turnover). It was $27 million in 1999.
Why is this downward trend occurring? The reasons are numerous. In the first place, though now entrenched in the racing structure, the 'claiming system' is cited by many prominent breeders as a factor which is militating against the viability of the business.
Support for the system is split down the line, but the fact remains that it is for less stressful acquiring a claimer than a yearling which must be kept for some time before it is put into competition. The added stress comes from the state of the economy and the difficulty of getting large loans from the banks to acquire horses (without collateral) which that state of the economy generates.
But while it may be true that the 'claiming system' has had its negative effect, the cost of interest on money required by the breeder to conduct his business is prohibitive, and as the exchange rate worsens that cost also escalates.
Consequently, it is difficult for the breeder to even reach his break-even point, let alone surpassing it. And as that cost factor makes deeper inroad into the viability of doing business, the stock of animals for sale decreases.
Hence, the breeding industry must be set apart by the government for the injection of low-cost funding on favoured terms in relation to applicable payback periods of loans. It is a pressing need which the government will have to address with immediacy if both the breeding industry and its derivative, the horseracing product which generates taxation, is to survive.
Government will also have to lower taxation on the turnover of the promoting company considerably, to bring the impost in line with other countries. Better yet, the government should immediately suspend the taxation in order to generate the payment of bigger purses, which will in turn swell the count of purchases of horses from the breeders.
Another source of aid should come from the dropping of custom duty on the acquisition of series from abroad which prevents inbreeding and sustains and even enhances the quality of the country's bloodstock.
Another reason why the breeding industry has to be urgently helped into a viable mode is the need for adequate count of animals to support the introduction of Sunday racing.
There is no gainsaying the fact that Sunday racing will expand the base of the product and bring in greater inflows of revenue to the promoting company, as well as being an admirable agent of social change.
The Minister of State, Errol Ennis, has promised a huge injection of funds into horseracing. If this inflow materialises, much of it will have to be used to help the breeding industry as much as possible with funding on a 'most favoured' basis at a low level of interest.
It is hoped that the funding will also be used, to a substantial extent, to acquire studs for the establishment of a national stud which can be accessed by the breeders.
By V. Lloyd Simpson
Contributor