Reforming Food Price Subsidies, Tunisia

The reforms resulted in a decrease in expenditures on food subsidies from around 4.0 percent of GDP in 1984 to 1.5 percent in 1998. The share of total transfers received by the poorest quintile Increased from 8 to 21 percent, although early analysis of consumption showed an overall drop In calorie and protein intake. 

FOR PROTECTION AI ID PROMOTION THE DESIGN AND IMPLEMENTAVON OF EFFECTIVE SAFETY NETS 

there is a large difference in consumption patterns between urban and rural areas 60 percent of rural households have no access to electricity and use kerosene for lighting (Gangopadhyay, Ramaswami, and Wadhwa 2005). In some countries, governments have set different prices for different neighborhoods depending on their level of prosperity. Thus, Colombia has separate prices by neighborhood for electricity Chile does the same for water. 

Price discrimination for energy products is possible when all consumers have access to the same commodity. For example, where connections to the grid are available, subsidies on electricity use can be rationed by guaranteeing a minimum lifeline consumption level, with prices increasing as the amount of electricity used increases, as is done in Jordan. Note, however, that in this case meters need to be available to facilitate the implementation of step pricing. 

The implementation of subsidized sales and rations of food commodities faces the same challenges as food distribution programs. Rations can be distributed via ration shops (utility stores in Pakistan) or private retail oudets as in Egypt. In this case, the distribution requires additional logistical and administrative costs and may affoct the marketing and supply chain. 

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