31 Oct 2013

'Formidable' plan urged to move away from costly food imports

6:26 pm on 31 October 2013

One of the Cook Islands' major food importers and sellers, James Beer, says the government needs to put forward a formidable plan for the substitution of costly imported food.

He says it would be a better way of growing the economy than taking out loans for developments which might not yield results for years.

High finance, freight and energy costs and the need to remain competitively priced all factor in to the cost of a can of corned beef or tuna on the Manea Foods chief's shelves.

James Beer took Sally Round on a tour of his store in Rarotonga.

JAMES BEER: Our customers are mostly local people.

SALLY ROUND: And the canned food is a big thing?

JB: It is. And I think the reason for that is the majority of the people don't have adequate refrigeration. Canned food doesn't need to be refrigerated so it avoids the cost of buying a fridge or paying electricity for it.

SR: Where is all that tuna coming from?

JB: All that tuna does not come from the Cook Islands. That comes from Thailand.

SR: That's a bit odd, isn't it?

JB: (Laughs) Yes. Well, it's odd, you're right, because we have so much fish in our own oceans, but we don't have the means and the ability to be able to go and catch it and harvest it and process it and turn it into something like that, because the costs of doing business here are so punitive. Labour costs are difficult to compare, but we don't have the skill here. Most of the people have left that have had the skill. But certainly the opportunities exist for us to be able to do it ourselves. But who will we sell it to?

SR: Export it?

JB: Yeah, we'd need the economy of scale to be able to do that. If we do that, we'd have to make sure that our business inputs are low enough and competitive enough for us to be able to sell that product in the world market.

SR: Frozen tuna, frozen mahi-mahi - a Cook Islands product?

JB: It is, yes, but bought from a Chinese fishing boat that sells the fish to the Cook Islands before it exports... It sells its bycatch here and exports the rest o china.

SR: Caught in your waters?

JB: Caught in our waters, yep. We're doing things the wrong way. If we want to increase production, if we want to be able to export and turn our trade balance deficit around, we've got to start producing goods and selling goods that people want to buy from outside of the country. Rather than us selling licences and those licences are not measured by the amount of fish they sell. A one-off licence and you can go and catch whatever quantity, whatever tonnage you want, and exportyou want, on one licence. But all of this fish that we've got here on display was caught by overseas fishermen and sold here in Rarotonga as bycatch. And all the larger fish like the albacore and the southern bluefin tuna are exported to China. OK, so what we've got here is we've got a barbecue pack. In a barbecue pack we've got three kilos of lamb chops, three kilos of Top Hat sausages. One is $50, one is $55. All those products come from Australia and New Zealand.

SR: But how does it break down in terms of percentages, transport?

JB: Well, that's probably the biggest problem that we face, is that the cost of doing business, whether it's importation using freight values, the cost of storing it - because it's a frozen good it needs to be stored - the machinery that needs to cut it up. Basically what's happened is that along the way all the other factors are taking a bigger bite of the cherry than our labour forces and a bigger bite of the cherry than the retailer is.