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JA Gov't
Moves to Ease Rising Food Prices |
January 10, 2008: KINGSTON (JIS) - Jamaica's
government announced on (Jan. 8) that it will be subsidizing
five basic food items as part of measures to ease the
effects of rising food prices on the poor.
The move is part of a $500 million provision, which was
announced by Prime Minister, Bruce Golding, in Parliament
recently.
Industry, Commerce & Investment Minister, Karl Samuda,
speaking at the weekly post-Cabinet press briefing at
Jamaica House, said that the items are: counter and baking
flour, bulk rice, cooking oil, and milk powder. These items,
he advised, are to be subsidized until the end of the
current fiscal year on March 31. |
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"The new budget (for 2008/09) will make provision for
additional support as required, so this is really an
immediate response to a really difficult problem that faces
many of our people," he explained.
Mr. Samuda said that following on the Prime Minister's
announcement, the Ministries of Industry, Commerce, &
Investment; Finance & Planning; and Agriculture were
mandated to "meet and discuss a strategy that would lead to
the most effective utilization of these funds."
"That was undertaken and, as a result, a package was
presented to Cabinet on Monday (Jan. 7). We looked
specifically at (the) five food items, and based on close
examination and extensive surveys, it was brought to our
attention that these items are consumed by 90 per cent of
our people, and almost 100 per cent of the most vulnerable,"
Mr. Samuda stated.
Outlining the allocations, Minister Samuda said counter
flour will be subsidized at a cost of $110.8 million, which
will facilitate the product being sold for $50 per kilogram,
a $7 reduction on the current retail price.
Baking flour, he added, is to be subsidized at a cost of $36
million, which is expected to stabilize the price of bread
in the wake of announcements of a 10 per cent increase in
the price of the product and other baked items.
"As a result of discussions which I held with the Bakers
Association (of Jamaica) and the Jamaica Flour Mill, the
decision was taken to place support on this particular item,
sufficient to enable the price of bread to remain stable
over the next three months, thereby avoiding the need to
increase it by 10 per cent," the Minister stated.
In addition, an $85 million subsidy will be applied to bulk
rice to stabilize the retail price at $50 per kilogram,
representing a reduction in the current price of between $3
and $5. Cooking oil, which the Minister pointed out, would
have moved from $158 (per litre) to $194 without
government's intervention, will be subsidized at a cost of
$84 million, which will allow the item to be retailed for
$170 per litre.
In the case of milk powder, Mr. Samuda said that the decline
in the local dairy industry necessitates the importation of
the product to satisfy demand. He noted that while milk
powder is currently being retailed at a cost of $72 per 80
gram sachet, the price will be "maintained over the next
three months at $65 per 60 gram sachet, a subsidy of $7 on
each sachet at a cost of $18.9 million."
According to the Minister, the subsidies will be applied
through several mechanisms, including removal of or
reduction in the level of custom duties on imports. "Where
it is not at (the) source, it will be by agreement with the
distributor, who will indicate their levels of sales and,
against that, we allocate the support," he pointed out.
The Minister indicated that measures will be put in place to
ensure that consumers receive the benefits to accrue from
the subsidies. These, he said, include monitoring of prices
by the Consumer Affairs Commission as well collaboration
with distributors.
Additionally, Mr. Samuda said the Fair Trade Act gives him
"absolute awesome powers to investigate in the interest of
consumers."
Note: Article currency is Jamaican Dollars
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