Gov’t outlines subsidy plan for basic food items

[Lazie]

The Government on Tuesday outlined its promised initiative to ease the burden on thousands of householders who've been reeling from high food prices.

The announcement comes in the wake of near back-to-back increase in the prices of counter flour and a host of other basic food items.

Addressing Tuesday morning's Post Cabinet Press briefing Industry Minister Karl Samuda outlined five products which are to be subsidised.

It will come in the form of the removal of import duties from these products.

The products are rice, counter flour, baking flour, oil and milk powder.

Approximately $500 million has been allocated for this purpose.

In the meantime the local agricultural sector is also to receive a much needed boost.

Agriculture Minister Christopher Tufton says Cabinet has also approved a multi-million dollar allocation for that sector.

[HL]

Kinda sad that there are no plans in place to combat FUTURE high oil prices.

Subsidy is a band-aid remedy

The jamaican government is reactive--not proactive.

(Lazie, I think we were thinking along the same path when i posted the "$100.00 / barrell oil price" below)

[Lazie]

Gov't moves to ease rising prices

BY Balford Henry Observer writer balfordh@jamaicaobserver.com
Wednesday, January 09, 2008



The Government yesterday announced measures aimed at putting a cap on retail prices for at least five basic food items - rice, counter flour, baking flour, cooking oil and milk powder - in response to increases in wheat and oil that have driven up food prices around the globe.


Minister of industry, commerce and investment, Karl Samuda (left) and minister without portfolio in the finance ministry, Senator Don Wehby, walk towards the press centre at Jamaica House yesterday for the weekly post-Cabinet news conference. (Photo: Bryan Cummings)
Minister of industry, commerce and investment, Karl Samuda, told a post-Cabinet press briefing at Jamaica House that some $500 million would be spent by the Government over the next three months to contain these prices.

The money will be split between the removal of duties and cash incentives to importers and producers of baking flour, counter flour, rice, cooking oil and milk powder.

He said that the intervention would ensure that bread prices are not increased as was anticipated, and that milk powder prices are reduced temporarily over the next three months, bearing in mind the effect a longer subsidy would have on local dairy production.
The programme also includes $50 million to subsidise fertiliser prices to farmers.

Minister of agriculture and lands, Dr Christopher Tufton, explained that his ministry would add $20 million to the figure to ensure that fertiliser prices are reduced by at least 10 per cent within the next three months.

"We have had discussions with the sole manufacturer, Newport Fersan, as well as the distributors, and we have gotten an assurance from them that in terms of prices, this (subsidy) will be passed on to farmers across Jamaica," Tufton said.

He added that the ministry will be using the services of
the Rural Agricultural Development Authority to monitor the prices and that, based on his ministry's calculations, at least a 10 per cent reduction in fertiliser prices was anticipated.

Meanwhile, Samuda said that the mix of price stabilising initiatives will include the removal of duties on milk powder and bulk rice, for which the Government has obtained a waiver from the Common External Tarrif as well as direct payments to producers of counter and baking flour and cooking oil.

He said that although the current programme will end in March, they will be maintained by additional resources from the 2008/2009 budget afterwards.

"The composition of this allocation of $500 million is such that it does not only address areas of great sensitivity and need, as they affect the most vulnerable in our country, but we also have introduced into the mix support for the productive arm, and that is agriculture, which is so critical in terms of having a sustained supply of basic foods at prices determined largely by our own productivity and output levels," Samuda said.