Iraq Cancels Direct Food Purchases

Iraq's trade ministry has cancelled direct cash purchases of essential food items, such as sugar, wheat and rice, in a move to help prevent corruption, according to a report from Reuters.

The change was announced as a 100-day target set by Prime Minister Nuri al-Maliki to improve his fragile coalition government's performance in the face of popular protests against shortages and corruption neared its early June deadline.

Although direct cash food purchases were being halted, Iraq, one of the world's largest grain importers, would continue to hold public and selective tenders to supply its food needs.

Most of the essential food items imported for the national monthly food ration programme had come from direct cash purchases, a ministry source said.

Deputy Trade Minister Sweiba Mahmoud told a news conference the bulk of corruption problems in the country's food supply channels had been experienced in the area of direct cash purchases.

"There was a mechanism of cash purchase in the trade ministry and this mechanism has been cancelled," she said.

There have been complaints about the monthly food ration giving Iraqis supplies of rice, cooking oil and other staples.

Iraq consumes around 4.5 million tonnes of wheat a year, 1.2 million tonnes of rice, and 780,000 tonnes of sugar annually.

Mahmoud said "we have enough reserves [of sugar] in the trade ministry warehouses to cover requirements until the end of September," she said.

She added the government intended to phase out the food ration programme by the end of 2014, keeping it only for the most needy. This would give more of a chance for the private sector to import national food requirements.

The ministry had requested a total budget allocation for 2011 of 7 trillion dinars ($6 billion), but had only received 4 trillion ($3.4 billion) so far, which was just enough to cover the food ration programme needs until the end of September.

Mahmoud said the deficit in relation to the total requested had slowed the ministry's performance, but it expected to receive a supplementary budget from oil revenues.

(Source: Reuters)

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