Subject: Subsidised rice not reaching the poor
also ETimor moves to stem inflated rice prices
TIMOR-LESTE: Subsidised rice not reaching the poor
DILI, 10 September 2008 (IRIN) - Timor-Leste's poorest are missing out
on a government rice subsidy designed to relieve the pressure of the
global food crisis.
The government imports rice and sells it for US$16 per 32kg bag,
regardless of the market price, but much of it has not been reaching
rural areas, where people are less likely to have cash.
"We've seen that the subsidised rice hasn't been available for the past
six weeks," Joan Fleuren, country director for the World Food Programme
(WFP) in Timor-Leste, told IRIN.
But the government said that while rice stocks have been lower than
usual, it has still been distributing subsidised rice.
"So there is this mismatch between the two reports - it is not available
on the market [yet] the government says they have sent it. So either the
supply line is broken or the food is sold at different prices than was
intended [by the government]," Fleuren said.
Missing the target
Orlando Mota lives in the mountain town of Hatuboulico, Bobonaro
District, a six-hour drive from the capital, Dili."The small shop [in
town] was selling [government rice] for $29," he told IRIN - nearly
double the subsidised price.
He said the police told the shopkeeper this was not allowed. "But now
they won't sell the rice [at all] because of the police."
Mota said shop owners also claimed they had to charge inflated prices to
pay the extra cost of transporting the rice along bad roads from Dili,
despite the government covering most of this cost.
The government said it had implemented a law regulating the sales price.
"We have had a lot of complaints," Joao Gonsalves, Minister for Economy
and Development, told IRIN.
"Six businessmen involved in the distribution had put the rice in
different packets to sell at increased prices, some kept it in the
government bags - but we have taken action against these six that have
been caught," he said.
People who live in remote communities have also arrived in town to buy
discounted rice only to find it sold out. They blame poor information
flow from the government in Dili about the timing of deliveries.
"Until now we have not had good communication with the districts,"
Epifano Silva da Costa Faculto, national director for domestic trade,
The WFP cautioned that the government should consider ways to target
food subsidies to the most vulnerable. At present, the poorest and the
richest alike can buy subsidised rice.
Fleuren said a system where the most vulnerable get full subsidies and
others means-based subsidies, would be more effective.
Fleuren said another solution could be cash handouts for those living in
places where the market was functioning, and food handouts for those in
more remote locations. But Gonsalves said cash handouts were not a
"viable alternative. We'd rather give them food than cash money," he
"There has been a push for [cash handouts] from the World Bank and the
International Monetary Fund, and we do not agree with that."
He said the government was not looking at alternatives to the rice
subsidy but only to the mechanisms of distribution to deal with the
Part of the government's long-term strategy is to increase local
production of rice. The country consumes 100,000 tonnes each year, but
less than a third is produced locally.
The government buys local rice for the same price as on the
WFP said the government should combine strategies to alleviate pressure
from rising food costs into one cohesive plan, because at the moment the
efforts could work against one another.
"For instance, if you want to import a lot of food to subsidise sales on
the market, in the end this short-term solution goes against finding a
long-term solution, namely improved national food production," Fleuren
Date: 09 Sep 2008
ETimor moves to stem inflated rice prices
Reports are coming in from all around East Timor that the country's
poorest people are missing out on a government rice subsidy aimed at
relieving the pressure of the global food crisis.
The government policy is to import rice and sell it for $16 per 32kg
bag, regardless of the market price, but much of that rice has not been
reaching those who live in rural areas.
Orlando Mota is a resident of Hatabaulico, a remote mountain village six
hours drive from the capital Dili.
Speaking through a translator, he told Radio Australia's Stephanie
March, there's currently no affordable rice available for sale.
"The small shop in my town was selling the rice for $29 then the police
came and said they cannot sell for $29," he said.
"They said if they want to sell for $29 dollars they need to wait for
permission from the ministry.
"So now they are not selling any of the rice."
People in very remote areas say they're not being told when cheap rice
will be distributed to shops in rural centers, and arrive only to find
it is sold out.
Some traders are repackaging the government rice and trying to pass it
off as private imports so they can charge more.
As the so-called 'hungry season' approaches, the problem doesn't appear
to be getting any better.
The country director of the World Food Program in East Timor, Joao
Fleuren, says his monitoring teams are reporting there is no subsidised
rice available on the market.
"Subsidised rice has not been available for the last six weeks or so,"
he told Radio Australia.
The government says while rice stocks have been lower than usual, it's
still been distributing the subsidised product.
Joao Fleuren says because the market place indicates there is no rice,
there is either a break in the supply line or the food is sold at
different prices than was intended.
Clamp-down on rogue traders
The government has now passed a decree law banning traders from selling
subsidised rice at inflated prices and there have already been arrests.
The price of rice is a touchy subject in East Timor.
It's caused riots in the past, and the government has recently been
criticised over allegations of nepotism and corruption due to its
tendering process for rice imports.
Joao Fleuren says the government should start looking at other measures.
"A system that the vulnerable who need food hand outs in the short or
long term they get it for free, but other people get a subsidised
quantity of rice, either 10 per cent subsidy, or 20 or 40 depending on
their economic status," he said.
Over the long-term, the government plans to deal with rising food prices
by increasing local production.
But Joao Fleuren says long-term strategies need to be dovetailed with
immediate measures or they will backfire.
"A lot of things are being done now but not as concerted strategy," he
"For instance if you want to import a lot of food to subsidies sales on
the market, in the end this short term solution goes against finding a
long term solution, namely improved national local production."
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