According to the report, the new system is structured to reduce fraud and waste, and is expected to deliver cash support of $241 million through a domestic hunger safety net system modeled after the USDA’s Supplemental Nutrition Assistance Program (SNAP).
The cash support will be paid out through an electronic benefit transfer card to approximately 6.2 million Jordanians and Palestinian refugees, the USDA said.
The Ministry of Industry, Trade and Supply in Jordan has managed the country’s bread subsidy for many years, and while the ministry will continue to set price caps for bread it will no longer directly subsidize the product to bakeries, the report noted.
The new bread prices include a price hike of 67% for small pita loaves, an increase of 100% for large pita loaves, and a spike of 94% for traditional bread.
“The new prices will remain in place through March 2019,” the USDA said. “Jordan has sufficient wheat (i.e., both delivered and contracted purchases) to meet current domestic supply needs. Jordan is an insignificant producer of wheat and depends on imports. Bakery and other non-subsidized products remain unaffected.”
The USDA said Jordan’s government expects to save about $106 million by replacing the bread subsidy program. In 2017, Jordan allocated about $170 million for the bread subsidy program, the agency noted.
“Large bakeries welcome the measure,” the USDA noted in the report. “These inform FAS Amman that reform of the subsidy should help put an end to subsidized wheat flour leakages that distort the commercial market. Bakeries that traded/resold subsidized wheat flour are expected to drop out of the bread market.
“Minister Qudah comments that the current market price of wheat flour is about $332 per tonnes. The price at which the ministry has been subsidizing wheat flour is approximately $71 per tonne. The wide spread in prices has reportedly fomented a black market and illegal practices (including tax evasion).”
