Strengths and Weaknesses of Using Food Subsidies in Improving the Welfare of the Poor in Middle Eastern Economies

1535 WordsFeb 21, 20186 Pages
In developing agricultural policy in Middle East, the main problem facing policy makers is the choice of options means of improving the short run welfare of poor households in the population. Among these, policy alternative is a choice between food subsidies and agricultural production subsidies. Food subsidies involving either the sale of stable food items at subsidized prices, or income transfers, expected to improve the welfare of recipient households in the short run directly. On the other hand, agricultural production subsidies and other agricultural investments are expected to stimulate agricultural production and change into welfare gains via lower prices. They also have the ability for securing economic growth and employment opportunities for the poor in the long run. Given public budget constraints, policy-makers have to balance the trade-offs resulting from alternative policy choices and weigh the conflicting interests of different socioeconomic groups while allocating public funds. Therefore, the paper will examine the strengths and weaknesses of using food subsidies in improving the welfare of the poor in Middle Eastern economies, especially Egypt. An active intervention in the food sector has historically been a central part of food Middle East economy. Food subsidies have been widely used in many developing countries and some developed countries to improve food consumption and uplift problems linked to malnutrition and food insecurity. The role of food

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