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No decision taken yet on bread subsidy — minister

Apr 07,2014 - Last updated at Apr 07,2014

AMMAN – Experts are mulling new subsidy mechanisms for bread that should target Jordanians only, with a system similar to that applied to fuel cited as a strong candidate.  

Minister of Industry, Trade and Supply Hatem Halawani said on Monday that no decision has been taken yet on adopting a new subsidy system for bread as the ministries of finance and industry and trade are still studying options.

In a statement e-mailed to The Jordan Times, the minister pointed out that a favourite mechanism so far is the direct cash payments to citizens, which is the same system used in fuel subsidies. 

 Once any mechanism is endorsed, Halawani said, citizens will continue to benefit from the same amount of subsidy they currently enjoy, he said.

The official added that targeted subsidies will not put any financial burdens on citizens who deserve government support as they will be compensated for the difference in prices. 

Halawani explained that the main goal of directing bread subsidies to those who deserve it seeks to address flaws in the currently used regime, under which the government provides bakeries with subsidised flour at around JD36 per tonne while the real cost on the budget is estimated at JD305 per tonne. 

The government estimates the value of the flour subsidy and basic commodities at JD260 million, from which non-Jordanian residents also benefit.

He accused some bakery owners of misusing the subsidised bread for making other products, adding that some people use bread as fodder because it is cheaper. 

Halawani also added that some people smuggle subsidised flour to neighbouring countries, also citing thefts by some truck drivers, referring to cases being seen by the judiciary.  

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