Bread Subsidy to Be Distributed Next Week

Michelle Sutherland

As early as next week, the Ministry of Agriculture, Food Security, and Enterprise will be distributing the first portion of its promised subsidiary to several bakers across the country to assist them in alleviating operational expenses due to the high cost of wheat on the international market.

Late on Thursday evening, The Reporter spoke with Lennox Nicholson, the controller of supplies in the Ministry, who indicated, “As we speak, the resources have been disbursed to the Ministry of Agriculture, Food Security and Enterprises by the Ministry of Finance. So those resources are within our Ministry, and we can start drawing down on those resources to make payments to the bakers. A form has also been sent out to the bakeries to submit to us their claims along with supporting documents, invoices, and things of that nature to facilitate the payments.”

Nicholson confirmed that in this instance, only eight bakeries who have sent in their application and were properly vetted and approved will be receiving payments for June and July.


He said that one other bakery is pending but that the Ministry is in the process of querying additional information from the particular bakery before proceeding with payments. While Nicholson indicated that the Ministry had conducted a comprehensive study of bakeries in the country, and 26 of them were found, not all of them had qualified for the subsidy, while several others have not applied for the assistance. The amount for the assistance currently stands at $1.5 million, the sum approved by the National Assembly via a recently tabled general revenue supplementary Bill.

“Going forward now, I must tell you that there are a couple of enterprises that are noticeably absent from the list," said Nicholson. "We know that in at least a couple of these instances, they do produce the 16-ounce slice of bread and would be eligible for the subsidy."


Nicholson explained that they will reach out to those would-be-eligible bakeries. " We will be sending an officer to visit these folks to explain to them that the program is there and that some reliefs are available to them under the program. We will encourage them to submit their documentation so that we can provide the necessary assistance,” indicated Nicholson.


He also told our newsroom that while it was initially agreed that the assistance would have been rolled out in June and July, some administrative matters needed to be attended to. That, according to Nicholson, included compiling a comprehensive list of enterprises in the bread industry and then ensuring that they met the requirements for enrolling in the program by conducting field visits.


Those field visits also allowed the Ministry to explain to the bakeries that only 16-ounce slices of bread would be covered by the program. It also allowed the Ministry to gather the required data, such as the volume of the regulated products that they produce, the estimate, and the invoice to indicate how many sacks of flour they used every month to produce a 16-ounce slice of bread. That data was then used to calculate the funds needed and to work out a payment formula.


“For instance, it is 25 cents per pack. The flour that is used to produce the 16-ounce slice of bread is Bebe Agua, so when the submission comes to us, the key indicator that we look at is how many sacks of Bebe Agua flour the particular enterprise use in a given month.


"Based on the submission that was made to us by the bakers, there is a ratio of 120 packs of bread per sack. So if you multiply that by 25 cents, then you would get an idea for every sack of Bebe Agua flour that they use and how much money would be disbursed to them.


Based on the agreed interaction with them, we came up with another approach. The Formula says that out of a sack of flour, they would use an average of 70% of that to make the 16 oz slice. So, if a particular entity would use 1,000 sacks of flour per month, we would only pay them for 700 bags, and using the rate of 25 cents per pack and one sack yielding 120 packs, it works out somewhere in the area of $30 per sack,” explained Nicholson.


We also asked him about the continuous decrease of wheat prices on the international market and if he expects that price decrease to reflect locally. While Nicholson said yes, he claimed that a key factor in that scenario would be timing based on the trading pattern. He stressed that the price changes will not be reflected until that particular shipment lands in the country. When that occurs, Nicholson said that the job of his office would be to ensure that those prices are reflected domestically.


133 views0 comments