Wednesday, 9 November 2011

FOOD COUPONS IN IRAQ AND KURDISTAN بدائل الحصه التموينيه في العراق

The continuation of the food subsidies, introduced by the Oil for Food Program, forms the main constraint on the development of agriculture in Iraq and a drain of hard currency out of the country. I have written to the Ministers of Agriculture and Trade in both Erbil and Baghdad (see link) expressing my concerns but, as yet, I have had no reply to my letters. However two booklets, containing my views on this subject, have been published and widely distributed.

الحصه التموينيه في العراق

I keep emphasising that the distribution of free, imported food to the entire population ultimately has a devastating effect on agriculture and the nation’s food security. The distribution of free food commenced 15 years ago when the Oil for Food Program commenced and it has continued to this day. While the aim was to provide the nation’s hungry, displaced and poor with sufficient rations to maintain a family in reduced circumstances the handouts have continued to be distributed to every family in the country, irrespective of financial status, for 15 years. It surely is time for this to be phased out and ensure that in future food assistance is provided only to the poor and needy.

With this in mind I have suggested that the Iraqi government looks at the subsidised food program that was implemented in Egypt more than 50 years ago and has been streamlined and reorganised to meet the current requirements. I have recently made some investigations into this system while in Cairo on vacation and I must say that I am now even more convinced that the Ministers of Trade and Agriculture in Iraq should look into the Egyptian system and make changes in the system in Iraq and Kurdistan.

Egyptian families are provided with a ration card enabling them to obtain subsidised food. However these cards are only issued to those that are unemployed, poor or on an income below a threshold point. Therefore government employees will be issued with a ration card if their salary is below the threshold level and some districts of Cairo, renowned for the wealth of the citizens living there, are identified as districts where no ration cards are to be issued. The cards are issued under government control, and after assessment of a family’s situation, and the food can be obtained from ordinary grocery stores that have received government approval to act as an outlet. Some outlets function under the remaining co-operative shops. If a shop/outlet does not have sufficient supply to meet the demand the ration card holders are given a note identifying what is owed to them so that it can be redeemed a few days later when stocks have been replenished. A limited range of food items are now available under the system as follows:

• Rice: each family receives 4Kg of rice per month for each family member, so a family of four is entitled to 16Kg of rice per month, (at one time the ration had been 8Kg per family member). The rice is not free but is purchased by the recipient at a cost of 1.5 Egyptian pounds (EGP) compared to the normal market price of 3.5EGP. The rice is good quality, Egyptian rice and that available this week (during the Eid) was harvested in June 2011. I have eaten this rice and it is of a very acceptable quality and it is not fed to animals or resold by those who receive it, as is the case in Iraq. Only 12% of the rice grains are cracked but I am sure that the quality would not be acceptable to the majority of Iraqis who now have an increasing preference for Basmati varieties as demonstrated by the 12 varieties of Basmati rice I have found for sale in the Erbil markets. As a comparison, for the cost of 1Kg of Basmati rice one can purchase 10Kg of the Egyptian rice that is distributed by the Egyptian Ministry of Social Security.

• Oil: each family, ( an average Egyptian family is considered to be 5 people), can purchase 3Kg of good quality, vegetable (corn) cooking oil per month at a cost of 2 EGP /Kg when the market price for this oil is 11 EGP/ Kg.

• Sugar: Every person is entitled to purchase 1Kg of sugar per month at a cost of 1.25 EGP instead of the market price of 5 EGP per Kg.

• Ghee and tea are also available on the ration cards but most prefer to use the cooking oil instead of ghee and the tea is not liked by most, so these rations are often not claimed.

• Other items that are subsidised are bread, with 20 flat Egyptian b reads costing 1EGP and gas for cooing can be purchased at a subsidised price of 3.5EGP ( 1EGP = 200 ID)(1US$=1200ID)(1US$=5.95 EGP).

Following the revolution of January 25th lentils, beans and macaroni were dropped from the list of subsidised foods and no public complaints were made about this decision. During the month of Ramadan families can use their ration card to purchase extra rice, oil, sugar etc at 50% of that month’s market price.

Military establishments also play a role in the system in that the military produces its own supplies of meat, poultry and other foodstuffs and sell surplus produce through military outlets on the open market. In addition military factories make and sell products such as cookers, ovens and refridgerators which are sold at a low price on the open market. These goods are of such quality that they are preferred to imported goods.

An important point to be made is that in Egypt the families that receive this subsidised food consume all of it. It is a criminal offence to sell the produce to others and there is a prison sentence awaiting anyone who was found selling subsidised food. So there are no trucks in the streets, the drivers announcing their presence with loud hailers etc, ready to purchase the unwanted subsidised foods. This provides some cash for those who sell to these dealers who can then sell it back to the original suppliers to be resold to the Iraqi government – all profiting from the system.

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