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Lebanon’s wheat farmers stuck as government can’t pay for grain

A combine harvester works in a wheat field in Kefraya, in the Bekaa valley, Lebanon June 24, 2015. REUTERS/Jamal Saidi

BEIRUT: Wheat farmers in Lebanon are waiting for the government to decide their compensation for last year’s harvest after the Cabinet failed to meet over how much to pay them. The Economy Ministry is considering paying about 500 wheat farmers who registered for support at least $100 per cultivated dunum (0.247 acre) for any production that wasn’t sold last year, according to Hasan Hammoud, head of the ministry’s department of supply and production. Some farmers sold some grain to traders, mostly in Iraq, at a loss, he said.

Lebanon typically pays wheat farmers an above-market price for their production to ensure adequate supply for the nation. In 2014, they got paid LL590,000 ($390) a metric ton, about 80 percent above the international average benchmark price that year. An influx of Syrian refugees estimated at 1.5 million people has added to the demand.

“Farmers are finding difficulty selling their harvest with some selling at cheaper prices,” Hammoud said.

National wheat production has been steady for the last three years at 140,000 tons, well below demand of 825,000 tons for the marketing year ended in June, according to estimates of the U.S. Department of Agriculture.

Demand that now averages 35,000 to 40,000 tons a month has increased by about 10,000 tons because of Syrians, he said.

Global wheat futures dropped 20 percent last year and traded at a five-year low this month. The USDA has forecast that global wheat inventories will climb to a record before this year’s North American harvests are due.

Lebanon usually buys all the domestic wheat production, with 12 privately owned mills importing the rest needed mostly from Ukraine, Russia and parts of Europe, Hammoud said.

The domestic wheat is bought by the government at LL590,000 per ton to keep the price of 950 grams of bread at LL1,500.

The government is studying increasing the size of a subsidized loaf of bread due to low energy costs, Hammoud said.

 
A version of this article appeared in the print edition of The Daily Star on January 21, 2016, on page 4.

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