CBSP, Subsidies, Economic Update, Social Safety Net

War on Ukraine Raises Questions about Lebanon’s Food Security

0:39 | 30 April 2022LIMS output
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War on Ukraine Raises Questions about Lebanon’s Food Security

Increasing pressure is mounting, as the risk of a humanitarian crisis in Lebanon becomes possible, due to grain supply issues—a consequence of the war on Ukraine. Bread and fuel shortages have become more frequent. Additionally, questions and concerns are arising about the food supply in Lebanon.

LIMS explained that food security should be seen as citizens having the means to acquire food and not the country being self-sufficient. Lebanon has a geographic advantage when it comes to the ability to import essentials. However, government policies like restrictions on imports and high import taxes are affecting the citizens’ ability to buy such goods. Also, the Lebanese pound’s devaluation has been negatively affecting consumer purchasing power.

Furthermore, bread and fuel shortages will get more severe as price controls continue. Currently, the Ministry of Economy sets the price of bread way below the actual cost. For fuel, the Ministry of Energy sets the prices lower than the real cost as well. Then the central bank foots the bill, thus draining Lebanon’s foreign exchange reserves. LIMS has recommended allowing prices to be set by importers and bakeries, since the central bank cannot finance this program any longer. Alternatively, the country could suffer from running out of bread, if the ministry maintains the price below cost and cannot finance these subsidies.

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