Agriculture being the mainstay of Fiji’s economy, contributes around 28% to total employment in the formal sector and indirectly employing many more. This sector which was once a major stronghold of Fiji’s economy is the third largest now, contributing $416 million (9.35%) annually to the nations GDP. Sugarcane which used to dominate the sector now only contributes (1.7%) and has been surpassed by other crops, horticulture and livestock production (3.6%) and subsistence sector (2.75%).
The non-sugar agricultural sector over the years has shown a promising trend. The main commodities’ that constitute this sector are root crops (Dalo, Cassava, Yams, Sweet potato and Yaqona(Kava)), tropical fruits (Pineapple, Pawpaw and Mango), vegetables, spices, coconut products and livestock. In terms of GDP, the non-sugar Agriculture sector had an average contribution of 7.82% over the period from 2005-2011
Agriculture has the potential in other sectors such as tourism and agro-industries and as a major economic activity in the rural areas; agriculture plays an important role in the process of rural development. Having a rich resource base and tropical climate, Fiji has an advantage in producing a wide variety of tropical fruits and vegetables given Fiji’s fast expanding tourism sector, agricultural growth is necessary to supply high local hotel demand. Thus, the potential for Fiji’s agriculture sector is in production for local consumption, export of high value commodities and niche agricultural produce.
i) Korovou to Tavua (East Viti Levu) declared as a Tax Free Region with the following features:
- Applicable to the agricultural sector;
- Applicable to newly incorporated entity;
- Minimum investment of $1m;
- Tax holiday of 13 years;
- Tax holiday of 20 years for agriculture and dairy industry; and
- Import duty exemption on the importation of raw materials, machinery and equipment (including parts and materials) for the establishment of the business for 12 months from the date of approval.
ii) To promote growth in the exports sector, the Export Income Deduction will be retained at 40 percent in 2013.
iii) To promote employment creation, the Employment Taxation Scheme (150% tax deduction) will be extended to 2014.
iv) 200% deduction on capital expenditure which is available to all investors engaged in agricultural activity.
v) 40% deduction for investment allowance may be claimed on the purchase of capital assets of not less than $50,000.00 per annum.
COMMERCIAL AGRICULTURE & AGRO-PROCESSING
- A 10 year tax holiday will be granted to companies undertaking new projects in agricultural farming & agro-processing.
EXISTING BUSINESS IN VANUA LEVU
- 200% tax deduction can be claimed by any existing legal entity in Vanua Levu that is engaged in commercial agricultural farming and agro-processing
BIO-FUEL PRODUCTION INCENTIVES
- Tax exemption for a period of 10 years to companies that are involved in processing agricultural commodities (sugar, coconut, cassava etc) into bio-fuels.
- Carry forward of losses is available for 4 years.
- Corporate tax rate is 20%
- 20% depreciation allowed for building used for agriculture purposes, can be written off within any 5 to 8 years.
- Duty concession on farming inputs, farm machinery and other agriculture related materials.
- All enterprises involved in exporting are allowed 50% deductions from total export income for taxation purposes.
- In order to encourage and protect local producers and manufacturers of dairy products, government took measures to increase Fiscal Duty ranging from 17% to 27% on liquid milk, powdered milk, butter and cheese.
BUSINESS OPPORTUNITIES IN THE AGRICULTURE SECTOR
Potential for Fiji is found in the production and export of high value niche agricultural produce. The pristine environment, on which agricultural production takes place braced by other environmental and ecological factors, supports of organic produce. This is a major development in the fresh food market worldwide and provides lucrative opportunities to investors and stakeholders.
Potential commodities for value added processing include; papaya, tomatoes, pineapple, coconut, duruka, mango, chillies, banana, cassava, taro, breadfruit, sweet potatoes, ginger cocoa and dairy.
Other investment opportunities also exist in the livestock sector for; animal feed supply, using local resources from existing industries, dairy farming and production and supply of organic farm inputs.