President announces additional measures to cushion rising food prices
-public servants to get 5 % increase, flour prices to be subsidised, among others
Georgetown, GINA, May 7, 2008
Guyanese countrywide will shortly be benefitting from a number of measures to be put in place by Government almost immediately that should see them earning more and allowing for the reduction of the financial burden being experienced as a result of the rising cost of food on the world market.
Head of State Bharrat Jagdeo today announced the additional measures to be implemented immediately by his Government to cushion the impact of the continuing rising cost of commodities that has caused outrage in some countries and resulted in rioting in States such as Trinidad and Tobago, India and Haiti.
The President made the announcement during a press conference he hosted at the Office of the President.
One of the measures will see the Government subsidising the high cost of flour being charged to bakeries in the country by the National Milling Company (NAMILCO) thereby allowing for consumers to pay the old price for bread, pastries and biscuits. The President had met with bakers who had agreed to the subsidised measure about two weeks ago in return for selling their products at the old price. Today, the media reported on the 25 percent increase of flour as announced by NAMILCO.
“We recently noted the announcement by NAMILCO about price increases in flour which is considered a very important commodity for national consumption. It is one of the staples that our people use,” President Jagdeo told the media.
He noted however, that based on information he has received there are indications of a possible stabilising and even partial reversal in the price of wheat on the world market due to a bumper crop of wheat in some parts of the world. This, he said, should see prices of flour being reduced in the future.
“But NAMILCO had already imported wheat at a higher price so we anticipate that the higher prices will last for at least four months. We are hoping that when the cheaper wheat is acquired that after four months we can see a reduction in the price in flour like we saw with chicken,” President Jagdeo explained, noting that chicken prices had reduced following a dramatic increase at one point previously.
“We hope that with flour that this happens. Therefore, I have granted approval for certain temporary transitional measures to be put in place to cushion the impact of increased flour prices on the most vulnerable sections of society,” the Head of State said.
The Government’s financial support to the bakeries should see about 22 of them benefitting from the subsidy and these cover approximately 95 percent of the bread market, according to the President.
“The flour that the bakers would be using under this subsidy will not only go towards the production of bread and pastries but also biscuit, but we hope that we will not see any price increase in bread and pastries because these bakers that I met with they cover the bulk of the market,” he assured.
In another major move to assist vulnerable citizens, the Government has purchased a specific amount of flour in small packages (approximately 200,000 grams (1kg sacks) and these are to be sold to vulnerable groups at the old price. This will be done by the Guyana Marketing Corporation (GMC) on a monthly basis.
“These interventions will be in place over the next four months and I hope that by supporting the price of bread and biscuits and pastries and not seeing any movement there and by distributing some 200,000 1kg sacks to vulnerable groups at the old price, we’d be able to cushion any impact on poverty,” the President reiterated.
President Jagdeo then announced another intervention which will directly benefit public servants whom he said will be granted a five percent increase in their wages and salaries effective January 1, 2008.
Alluding to a five percent increase already granted to the disciplined services and teachers at the beginning of this year, President Jagdeo noted that public servants had not benefited from this earlier increase. He reminded however that all categories of government workers had received a 9 percent increase effective January 1, 2007.
“Also, I have approved a temporary cost of living adjustment to be paid to Government employees whose basic salary is below a specified threshold. This initiative will see a temporary adjustment of $4,000 per month free of income tax during the months of May to December 2008,” President Jagdeo announced further.
He pointed out that Government employees such as teachers, nurses and members of the disciplined forces whose basic monthly salary is $50,000 or less based on April 2008 salaries after taking into account the 5 percent increase across the board, will benefit from this increase.
“Anyone who earns $50,000 and less will get a $4,000 temporary cost of living adjustment between now and December every month and that will be tax free,” he assured
The President pointed out though that these measures are temporary and Government will be reviewing them at the end of the year.
Meanwhile, another intervention by the Government through the Ministry of Agriculture will see the administration spending some $20M on the distribution of approximately 600,000 packages of seeds, fertilisers and pesticides across the ten regions of the country with the aim of increasing food production on a large scale as well as at the household level.
“I have already started looking at some of the larger schemes in Essequibo and some in Berbice and other parts of the country where we can work with the communities and probably grow more food because as I have always mentioned, the increase in prices has become a problem for many countries in the world,” he pointed out.
On this note, President Jagdeo said that Guyanese have the opportunity to capitalise on the food crisis by growing more food and earning more for their production. He promised that the situation will be reviewed and additional appropriate interventions made based on Government’s discussions and consultations with groups in the society.
Prior to today’s announcements, the Government had already made a number of interventions to cushion the increasing cost of food and fuel on the world market, including removing the excise tax from diesel, zero-rating a large number of basic food items, increasing the income tax threshold from $28,000 to $35,000 at the beginning of 2008 and increasing old age pension by 63 percent and public assistance by 82 percent this year. Excise tax on gasoline was also dramatically reduced by the Government from 50 percent to 17 percent while the increased fuel costs incurred by the Guyana Power and Light Company have been absorbed
. A whopping $5.8 billion investment, including $2 billion in recurrent support to the Guyana Water Incorporated (GWI) was also made by the Government last year and a similar amount is to be spent on the utility company this year as well, according to the President.
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