Subject: E Timor rice subsidy criticised by bank

Radio Australia

E Timor rice subsidy criticised by bank

Last Updated: Wed, 8 Apr 2009 14:12:00 +1000

The Asian Development Bank says the East Timorese government's policy of subsidising imported rice is hurting local producers.

Pacific Country economist for the bank, Craig Sugden, says subsidising rice imports discourages locals from entering the market.

He also says imported rice is often only consumed by wealthier members of the community .

"What's happening is that if the government is subsidisng what is a more superior or higher quality good, it might not get down to the poor people, who might be eating cassava or maize," he says.

"And the other issue is, when the government subsidises rice it keeps the local price of rice down."

But East Timor's Minister for Economy and Development Joao Gonsalves says if the government did not subsidise rice there would be no way poorer people in rural areas would be able to afford it

"And we have made money available in our budget that will guarantee purchasing all the rice that is produced by our farmers that they cannot sell in the market or they cannot use for their own consumption," the minister said.

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