Kuwait spends 300 mln dinars on food subsidies amid drive for supply reform

The Ministry of Commerce and Industry confirmed that the cost of food supply support reached 300 million dinars in the last fiscal year, which ended in March. This comes as the Ministry continues its commitment to maintaining a strong strategic reserve, covering all essential commodities — some for up to 12 months — amid rising global and local challenges.

Despite recent requests from fresh milk suppliers for financial compensation or a price increase —triggered in part by a foot-and-mouth disease outbreak in some local dairy farms — the Ministry has no intention of raising liquid milk prices in the markets or increasing its financial commitments in this regard.

Sources confirmed to Al-Rai that companies had proposed either a price increase for liquid milk sold in cooperatives or an annual compensation of 2 million dinars to continue offering milk at subsidized prices. However, the Ministry sees the disease-related challenges as temporary and emphasized that sufficient milk supplies are currently available, negating the need for intervention.

The Ministry revealed that the actual cost of a powdered milk package exceeds 5.1 dinars, while it is sold to beneficiaries for about 1.05 dinars. This pricing structure leads to an annual subsidy cost of around 40 million dinars, with an additional 20 million dinars in indirect support due to pricing differentials. Beneficiaries themselves bear approximately 10 million dinars of the cost.

This has prompted the Ministry to consider regulatory solutions that could reduce the financial burden on the public budget while maintaining the support structure for ration card holders.
In a bid to tighten control over supply chain operations and minimize waste, officials are working on a comprehensive reform of the ration card system.

Key proposals under study include:

• Establishing central supply distribution centers
• Introducing home delivery services for beneficiaries
• Linking inventory systems with supply disbursements to ensure accountability and eliminate discrepancies

These measures aim to make the subsidy system more efficient while ensuring that essential food items remain accessible and affordable to the public.