Amidst Increase in Cost of Flour in the Subregion Government Continues to Subsidize Flour
|
|
|
Contact: Julita Peter
Wednesday, April 23, 2008 – It was welcome news for local consumers on Monday, that government is continuing to subsidize the price of flour. Flour is among over fifteen basic food and health-related price controlled items. During his budget presentation, Prime Minister Hon. Stephenson King said, government is subsidizing the price of flour at 20 dollars and 14 dollars per bag, to bakers and consumers respectively. A short term measure, which is costing the government over 3.3 million dollars.
Flour Madam Speaker is landed here at EC 82 dollars for a hundred pound bag. After handling and other charges the cost of this bag in the warehouse is 87 dollars. The flour is however sold to bakers at 67 dollars per bag so that we have been able to keep the price of the pan loaf and creole loaf at the same level. The price of a bag of flour to wholesalers has remained at 73.10, so that the cost of a pound of flour to you the citizens has not gone up ever since the increase in prices.
For the medium and long term Government is reviewing the bi-lateral trade arrangement in place between CARICOM and some Latin American countries such as Costa Rica to identify products that we may want to allow to enter St. Lucia duty free.
I can inform you that the private sector is completely opposed to the use of price controls to cushion the rate at which prices of goods are rising. However government is mindful that the market conditions are not perfect and that competition by itself will not lead to the desired slowing down of the rate at which prices will rise in the short run.
Meanwhile the Prime Minister said an increase in productivity, is ultimately a sustainable response to the crisis of rising prices. He argues that if output is increased, then workers could benefit from salary and wage increases to combat those high prices.
To this end, the government of St. Lucia will examine the establishment of a National Productivity Council, which will work in partnership with the private sector. |
|
© 2008 Government Information Service. All rights reserved. Read our privacy guidelines. |
