Fish price at market rate saved MVR 1b in subsidies
The government has to pay the company large amounts in subsidies to buy fish at a price that MIFCO cannot afford.
By
Fathmath Ahmed Shareef
The Ministry of Fisheries said on Wednesday that the change in the price of fish based on the world market has saved billions of Rufiyaa in subsidies to Maldives Industrial Fisheries Company (MIFCO).
In the past, the government fish company, MIFCO, was buying fish at much higher prices than in the global markets. However, this government has decided on July 1 to adjust the purchase price of fish every week, taking into account the price of fish in the foreign markets and the cost of buying and exporting the fish.
Minister of State for Fisheries Mohamed Muthalib told a press conference on Wednesday that it is a good policy to let MIFCO determine the price of fish based on the international market instead of a fixed price.
He said:
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It saved the fishermen and the state a huge burden
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Before that, the price of fish had caused a huge financial burden on the state
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The government also had paid between MVR 600 million and MVR 1 billion in subsidies to MIFCO
"With this change, we have stopped giving this subsidy, and, with the change in the world market, MIFCO is trying to give a better price to the fishermen. The ministry is always trying to detect the change in fish price," he said.
Fisheries Minister Ahmed Shiyam also said that it is the most beneficial way for the entire fishing industry.
According to him, the government has decided to keep the price of fish at the market price because it believes that it is necessary to keep Maldives as a green environment for investment in the fisheries industry.
MIFCO, which is in financial trouble, used to buy fish at MVR 20 per kg, a much higher price than the foreign market price. During last year's presidential campaign, the previous government raised the price of fish to MVR 25 but it was later reduced to MVR 20 in February.
The government has to pay the company large amounts in subsidies to buy fish at a price that MIFCO cannot afford. However, the government's financial situation is so poor that despite the subsidies, the company still owed fishermen for fish the company procured from them.
