Grain Subsidies and Rising Wheat Prices
Mr. Kaveh Zargaran, Chairman of the Board of Directors of the Grain Association and Head of the Agriculture and Food Industries Commission of the Tehran Chamber of Commerce
By examining the World Bank statistics, we find that Iran’s GDP per capita is about $4,000, but when we consider the purchasing power of the people, this figure reaches $18,000 to $19,000 per year for each Iranian. This difference is actually the $14 to $15 billion subsidy that the government pays for food. However, I believe that the current payment method is not correct.
Domestic statistics show a 16.5 percent increase in the price of grains. These resources not only do not increase the welfare of the people, but are themselves a factor in inflation. In fact, the mismanagement seen today in the government and parliament has caused these 14 to 15 billion dollars to actually cause more economic pressure and inflation instead of improving people’s tables.
Payment of 200 to 250 thousand billion Tomans (Hemat) of subsidy for the wheat sector
Currently, 200 to 250 Hemats of subsidies are paid in the wheat sector. This is while if the government abandons its strategic policies, it can provide the country with both better wheat in terms of quantity and quality for half this cost. In the global market, the price of wheat at the farm is almost half of the price we pay domestically today.
