Gov't to subsidise cost of wheat for poor households

The Ethiopian government has decided to provide wheat to low-income urban dwellers at subsidised prices to cushion them against soaring food prices, Prime Minister Meles Zenawi said on Thursday.

Poor households will be able to buy 25kg of wheat every month until the cereals market stabilises, Meles told parliament. "The government has allocated 1.5 million quintals of wheat," he said.

Subsidised wheat will first be available in the capital, Addis Ababa, before the programme is extended to other urban areas in the country.

Food prices in Ethiopia have remained high despite a good harvest during the country's main crop season in 2006. The high prices have been blamed on the country's inefficient marketing system where middlemen play a major role in the distribution of food from rural to urban areas.

Farmers are also believed to be holding on to their harvest hoping to fetch much higher prices in the near future.

A joint crop and food supply assessment report issued by the United Nations Food and Agriculture Organization and UN World Food Programme in February projected that Ethiopia would register a third consecutive bumper harvest in the 2006/2007 main 'meher' season.

"Aggregate cereal and pulse production in Ethiopia from the 2006/07 meher season is forecast at 20.1 million tonnes, about 10 percent above the previous year's post-harvest revised estimates and 53 percent above the average of the previous five years," according to the assessment.

However, the report added, the steady rise in food prices meant that poorer households would be unable to feed themselves.

Meles said the government had decided to intervene in an effort to correct market inefficiencies by establishing a food distribution system that would ensure sufficient supplies in the market.

tw/jn/mw