Lebanon increases price of bread for fifth time this year as subsidies are removed

Lebanon increases price of bread for fifth time this year as subsidies are removed
3 min read
22 June, 2021
The Lebanese government raised the price of bread on Tuesday as the country's subsidies programme shows itself to be increasingly unsustainable.
The price of bread is of utmost concern to many Lebanese who rely on it as a last line of defense against hunger.

Lebanon's ministry of economy and trade announced on Tuesday that the price of bread would go up for a fifth time this year.

The price of bread will be raised by almost 20 percent from 2,750 to 3,250 Lebanese lira as a result of sugar subsidies being lifted, according to the ministry of economy.

The move comes as Lebanon struggles with a worsening economic crisis with the Lebanese lira losing 90 percent of its value since the fall of 2019. The price of bread has more than doubled from its former price of 1,500 lira during this period.

"Bread is a daily staple for the poor, we can't handle this for much longer," Castro Abdullah, the president of the National Federation of Employees and Workers' Unions (FENASOL) in Lebanon told The New Arab. "The ministry needs to take responsibility and return bread to its original price."

Bread is just one of the many goods in Lebanon witnessing a dramatic increase in prices amid the country's worsening economic collapse.

The price of food and beverages has increased by over 600 percent over the last two years and is only continuing its rapid ascent.

According to the latest World Food Programme (WFP) country brief, the price of products in Lebanon deemed to be the minimum needed to survive increased by 10 percent over the last month alone. The cost of these items comes to around 240,000 lira - over a third of Lebanon's monthly minimum wage.

Maya Terro, the executive director of FoodBlessed, a local relief organisation working to combat hunger, noted that she has personally witnessed a "huge increase" in those seeking food assistance over the last few months.

"The role of NGOs should be temporary and complimentary, but in Lebanon, they're substituting what the government should be doing - NGOs alone cannot fill the gap," she told The New Arab.

While the subsidies programme is meant to make basic goods - such as baby food, gas, and medicine - affordable to ordinary families, goods often cannot be found in stores due to problems between importers and the central bank.

The government says the programme, in its current form, is unsustainable, as foreign reserves used to fund the programme are quickly being depleted. As a result, some subsidies are being gradually lifted.

The Lebanese caretaker government - the former cabinet that resigned in the wake of the August 2020 Beirut blast and is yet to form a new government - said there is a need to adjust the subsidies programme but is yet to do so.

So far, two proposals are being debated in a parliamentary committee both of which involve lifting subsidies and replacing them with ration cards.

Abdullah complained that bakeries were taking advantage of the subsidies on wheat to make a profit at the expense of consumers. He explained that bakeries were using subsidised wheat to produce other products, such as croissants and sweets, which they can sell at much higher prices than the price-controlled bread.

He told The New Arab that FENASOL raised a case in court in an attempt to stop bakeries from using subsidised wheat for non-subsidised goods, a practice which "makes everything more expensive day after day".