Food imports: how long will the VAT reduction last?

In the absence of tax exemption on the import of feed for their pets, animal breeders and farmyards welcome the reduction in VAT on the import of premixtures. The decision is timely, especially in a context where animals lack fodder!

Faced with the increasingly high cost of feed imports for pets and farmyard animals, the government is issuing the card to reduce the VAT applied on imports. Cattle and farm animal breeders can rejoice in the fact that premixes (premix) now qualify for a reduced rate of 10%, under VAT on imports in accordance with article 121-2 ° of Tax Code. The proposal became the subject of a customs circular (n ° 6335/211 of June 10, 2022).

Contacted by Les Inspirations ECO, Dr. Abderrahman Benlekhal, director of the Federation of dairy farmers (FEMAPROL), responded: “This is a classic proposal, common in such instances. When the price goes up, the tax goes down. It’s an important decision to mitigate rising costs, “he explains. What’s that about? Premixes are products that breeders incorporate into animal feed, especially for dairy cows and poultry.

In fact, as for dairy cows, their feed consists of three types of products: green fodder, dry fodder (hay, straw, etc.), concentrated or compound feed produced by manufacturers and consisting of raw materials materials such as corn, sunflower meal, barley… In addition to these elements, which form the basis of feed for pets and farm animals, there are also premixes that make an important contribution to mineral salts and vitamins for these animals. The decision is timely, especially in a context where animals lack fodder!

Lack of fodder due to drought

Imported in the tone of 197.746 MDH by the end of 2021, France, Germany, Spain and the United States are our largest suppliers of premixes (premix) intended for animal feeds in cattle and farmyards. In 2021, France alone will represent 31%of our imports, followed by Germany (16%), Spain (13%) and the United States (12%). These four countries contribute up to 72% of Moroccan imports. To cope with the rising price of their feed inputs, dairy farmers claim they have requested some feed import exemptions for their pets.

But, in the absence of tax exemption, a reduction in import VAT would be welcome. “Dairy farmers have always demanded that they have exemption from VAT on raw materials used in animal feed because it is, on the one hand, a very sensitive area and that, on the other hand, is the food of animals. “This is a huge variation, including climate conditions. For example, this year, we will have a problem with food shortages due to drought,” explained our source.

If the shortage of fodder is combined with the increase in the price of products such as corn and barley, it can no longer be said that it is difficult to solve the equation of farmers.

Context marked a jump in the FAO reference food price index
According to the FAO, food prices began to rise sharply almost two years ago, culminating in a jump in the FAO benchmark food price index, which hit an all -time high in March 2022. The index this has not experienced a significant decline since then and remains 22.8% higher than in May 2021. Among the main factors driving the upward trajectory of food prices is stable demand supported by a rapid and strong recovery. from the economic contractions associated with Covid.

Simultaneously with the increase in demand, the increase in the price of fertilizer and fuel increased the cost of food production and contributed to the price increase. Rising costs are presenting themselves in international markets through logistical constraints and higher transportation costs. Together, supply constraints and stable demand are pushing food prices to an all -time high in March 2022.

The war in Ukraine has only exacerbated the situation in recent months. Especially since both countries are major producers and exporters of wheat and other commodities, questioning the ability of international markets to provide enough food to meet the import needs of the world’s population. rapidly reaching 8 billion inhabitants.

Concerned prospects, according to FAO

According to a new report published on June 9 by the Food and Agriculture Organization of the United Nations (FAO), the bill for world food imports could reach a record sum of 1.800 billion dollars this year. but this expected increase is explained mainly by increasing prices and transportation costs rather than increasing volumes.

“The search is cause for concern: many weak countries are spending more without, however, receiving more food”, suggests the FAO in the latest edition of the “Food Outlook”. Global spending on food imports is expected to increase by $ 51 billion compared to 2021, of which $ 49 billion is due to higher prices alone.

Least Developed Countries (LDCs) are expected to experience a 5% contraction in their food import bill this year, while Sub-Saharan Africa and the group of net food importing developing countries will see overall increases despite declining import volumes. .

“These are disturbing signs from a food security perspective, as it indicates that importers are having difficulty financing the ever -increasing international costs, possibly signaling the end of their stability in the face of rising prices. price. “, underlined in the report.

“Given rising input prices, weather concerns and growing market instability due to the war in Ukraine, the latest FAO forecast points to tighter food markets and unprecedented value for food import charges, ”said Upali Galketi Aratchilage, FAO economist who manages the coordination edition of the report.

Modeste Kouamé / ECO Inspirations

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