Iraq struggles to reform 'inefficient' rationing system
- 21 July 2012
- From the section Middle East
On the western bank of the Tigris in north Baghdad stands a rare relic of British rule in Iraq - a silo built during World War II to feed British soldiers.
Right next to it stands a taller structure, built in 1962 by the Soviet Union, as Iraq flirted briefly with communism.
Several trucks stacked with bags of rice and wheat drive past to empty their loads, and all around flocks of pigeons chase after fallen grain.
The site belongs to the state-owned Grain Board of Iraq, which imports rice and wheat for distribution to the population.
About 12,000 tonnes of wheat are stored here - a fraction of the quarter of a million tonnes Iraq imports every month.
And the vast majority of Iraqis receive their share almost for free.
For more than two decades, the Iraqi government has administered a massive public distribution system, under which all citizens are entitled to receive essential items for only symbolic payment.
The Iraqi government says it wants to reform the system, but its efforts have run into difficulties.
Fears for future
The system was put in place after the UN Security Council imposed sanctions on Iraq following its invasion of Kuwait in 1990.
More than nine years after the sanctions regime was lifted, Iraq still spends around $5bn (£3.18bn) a year to distribute food to its population.
The items include sugar, cooking oil, and baby milk formula for families with infants. The Grain Board is responsible for rice and wheat, which is then made into flour before being handed out.
"We deal with more than three million tonnes of wheat every year," a press officer at the Grain Board told me proudly.
But some of it seems to be going to waste. Every citizen is entitled to 9kg (20lbs) of wheat a month, and many people are not even claiming their share.
Hasan Ismail, the director general of the Iraqi Grain Board, admitted there was a problem.
"Sometimes the market does get saturated, especially with flour, because in cities people no longer make their own bread. But people in the countryside consume all of their rations, and they need them."
In distribution centres, few complain about waste or abundance.
Daoud is a construction worker in central Baghdad, and he's come to collect his monthly share from the local distribution agent.
"It's getting less and less, year by year, and there's no variety. We get cooking oil, sometimes rice, and flour. No tea, no washing powder, and no salt."
Daoud fears that the distribution system is gradually fading away.
"The whole thing will be finished soon, and we better get used to it."
The government insists it has no plans to end the system, only to introduce gradual reforms.
It says that those with monthly incomes of more than 1.5m Iraqi dinars ($1,200; £764) are not entitled to receive it any more.
But Mr Ismael says the attempt to implement the new measure has already run into trouble.
"It's not easy at the moment in Iraq to track people's incomes. The government lacks databases of people's incomes, and we can only track the incomes of those in the public sector."
"There could be some who work in the private sector with incomes of over 10 million Iraqi dinars a month who still receive their share."
Tracking incomes could be the least of the government's difficulties.
Like most subsidy programmes all over the world, the system is politically difficult to reform, and most politicians steer clear of pressing the issue.
Despite allegations of corruption and inefficiency, the public distribution system has been credited with achieving food security for a large segment of the Iraqi population during the past two decades.
Today 23% of Iraqis live below the poverty line, and remain in desperate need of government support.
The challenge facing the government is to strike the right balance between encouraging productivity and less reliance on the state, while making sure not to jeopardise the food security of those most in need.