Government to privatize wheat silos and warehouses
State-run wheat silos and warehouses will be privatized soon, a senior Trade Ministry official said on Thursday. “Privatization will help wheat silos and warehouses to function on a commercial and profitable basis and to ensure more efficient management of the wheat storage process,” said Hani Dabbas, a ministry assistant secretary general.
The ministry earlier formed a special committee under the leadership of the trade minister to study ways to privatize such facilities.
According to the ministry official, the process of privatization will consist of two phases.
First, the ministry will transform the wheat silos and warehouses into a state-run shareholding company. In the second phase, the company's assets will be purchased by the private sector.
However, “the government in coordination with the private sector will always guarantee that Jordan will have enough wheat on hand to cover a three-month period,” Dabbas told the Jordan Times in a telephone interview.
He said this strategic stockpile of wheat would be available year-round in Jordan, whether from the private or public sector.
Dabbas added that privatization did not entail specifying or even controlling amounts of imported wheat, but would function to ensure better management of the storage process.
In the past, the government subsidized basic food commodities, but recently the policy shifted and many such subsidies were eliminated.
For instance, subsidies for sugar and rice have been axed; however, the government still subsidizes both wheat and barley.
“The state subsidizes wheat and barley due to the drought” that has afflicted Jordan since the mid-1990s, said Dabbas.
However, in line with international obligations — primarily Jordan's integration into the World Trade Organization — economists believe that subsidies of all kinds will be eliminated.
In Jordan, wheat silos and warehouses are located in Aqaba, Jweideh, Zarqa and Irbid. The overall storage capacity of all wheat silos is 470,000 tones.
On June 6, Jordan received a shipload of 8,000 tones of wheat from France worth more than $1 million which was distributed to drought victims across the Kingdom.
Last May, the US gave Jordan 180,000 tones of American wheat worth $23 million under a US grant program. ― ( Jordan Times )
By Khalid Dalal
© 2000 Mena Report (www.menareport.com)