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Dept for International Development

Answer

Harry Cohen: To ask the Secretary of State for International Development how much has been purchased under the wheat purchase programme funded by the Development Fund for Iraq; at what cost; who was contracted to supply it; what the world price for wheat was at the time of purchase; over what time scale the wheat is supplied; under which disbursement heading it is included; how it is distributed within Iraq; and if he will make a statement. [179799] Hilary Benn: The Government of Iraq established the public food distribution system in 1990. This system of untargeted rationing has proved to be hugely costly to the Government and has undermined the country's domestic agriculture. DFID hopes to work with the Iraqi Interim Government and other donors to help reform this system, to the benefit of both Iraq's consumers and farmers, as soon as conditions allow. The amount of wheat actually purchased by the Government each year depends on the content of the "ration basket", which is decided by the Ministry of Trade (MOT) each month, depending on domestic production and existing stocks within the country. Published MOT budget information does not show the breakdown of the costs of individual public food distribution items but it is estimated that 3.5 million metric tonnes of wheat flour is required annually for the standard ration basket. Over the 12 months since the creation of the Development Fund for Iraq (DFI), if all of Iraq's public distribution system needs had been met from imports at world prices, the cost would have been around $700 million. This is likely to be an over-estimate since there would be some domestic purchases and use of stocks. The major suppliers of wheat to Iraq are Australia and the US. International export prices for wheat vary greatly depending on grade and freight distances but an average figure for 2003-04 is about $200/tonne. The MOT is responsible for purchasing grain from overseas and from domestic producers, for organising the milling contracts and the transport of the milled wheat flour to food agents. The following process describes how the food ration is distributed: 1. The MOT announces the food basket for the month and calls forward food agents to collect the ration; 2. Food and flour agents collect the coupons from households and go to the sales centre of warehouses/mills, where they receive an invoice; 3. Food agents collect foodstuffs from the warehouses/ distribution centres; 4. Wheat flour is transported to flour/food agents, which is paid for by the MOT; 5. Households then collect the ration from the food/flour agents and pay the nominal fee.

Secondary information

Type

Written question

Reference

179799; 422 c1485-6W

Session

2003-04

Subjects

Contracts Crops Iraq Food Imports Prices Agricultural products Wheat Development Fund for Iraq

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk