A baker in a Beirut bakery, February 26, 2021. (Credit: Joseph Eid/AFP)
Abbas Haidar, President of the Bakery Owners’ Union in the Bekaa, warned on Monday about the potential impact of removing subsidies and dollarizing bread and urged authorities to expedite issuing prepaid cards for the most disadvantaged, according to the National News Agency (NNA).
“We call on the state to take responsibility and accelerate the issuance of payment cards for eligible citizens in both the public and private sectors before the planned removal of subsidies at the beginning of next month,” Haidar said. He described the planned subsidy removal as a “disaster for citizens.”
The wheat used to make Lebanese bread, commonly known as “Arabic bread,” is the only type still subsidized in Lebanon. This wheat is sold to mills at a subsidized rate for flour production. Wheat for other types of bread, such as baguettes, toast, and sliced bread, does not receive subsidies.
“The subsidy for Arabic bread is partial. The last auction was based on a dollar at 60,000 LL, whereas it was initially calculated at 1,500 LL, then 7,500 LL, and later 30,000 LL,” said Ahmed Hoteit, President of the Mill Owners’ Association, to L'Orient-Le Jour.
In May 2022, the World Bank provided Lebanon with an emergency loan of $150 million to “prevent disruptions in short-term wheat supplies and help ensure affordable bread for vulnerable households,” a spokesperson for the organization told L'Orient-Le Jour.
The loan’s implementation began in February 2023 and was intended to provide subsidized wheat for approximately nine to twelve months, depending on global prices. However, the funds are now nearly exhausted. “The subsidized wheat supplies will be depleted by September 15 to 20,” Hoteit said. “Once this wheat is gone, no alternative funding is planned due to a lack of funds or loans to support additional quantities.”
Haidar noted that the impact of removing the subsidy should be minimal for citizens, as it affects only the difference between 60,000 LL and 89,500 LL compared to early 2023.