Government spends MVR 1 billion in food subsidy over four years

Statistics have revealed that the government has spent as much as MVR 1 billion in subsidizing basic food items, namely rice, flour and sugar, imported and sold in the country by the State Trading Organization (STO).

According to statistics, the government spent a staggering MVR 1083.59 million to subsidize prices of rice, flour and sugar during the last four years. So far this year, the figure is at MVR 272.4 million.

The government spends MVR23.5 million on average on the said subsidization program.

According to the data, the government spends MVR12 to MVR14 on per kilogram of rice, sugar and flour, which are retailed at controlled prices at outlets throughout the country.

The Maldivian government has, for a long time, subsidized prices of rice, flour and sugar, which constitute the basic items of Maldivian daily food together with fish. The program is conducted in partnership with STO, a public company formerly owned by the government but has now sold shares to the public.

Due to the subsidization program, the prices of these products have remained at extremely low levels for decades, and many criticisms have come up due to the fact that there is no positive discrimination in relation to Maldivians and foreigners, consumers and business enterprises, and the rich and poor.

According to statistics, the government is now spending MVR 2946.96 in subsidizing food items per head of expatriate workers, and rice, flour and sugar are sold to luxury resorts as well at subsidized prices.

The government’s budget for the next year has proposed increase in duty levied on these food items, and Abdullah Jihaad, the Minister of Finance, said that the government has a prospective plan to change its policy and limit the food subsidization program to include only the poor.