Maldives' state fisheries firm revokes price control on fish
MIFCO said it was not financially sustainable to buy fish from fishermen without taking the market price into account.
By
Mohamed Muzayyin Nazim
Starting Monday, the state-owned fish company Maldives Industrial Fisheries Company (MIFCO) has announced that it will revoke the present price control on fish purchases and float it on the market rate.
In a statement issued on Sunday, MIFCO said it is revising its policy to pay regular prices for fish purchased from fishermen after clearing all pending dues. The owed money will be cleared by Monday, it said.
"From July 1 [Monday], MIFCO will continue to buy fish from fishermen at a weekly price based on the price of frozen skipjack tuna in the international market and the cost of buying, processing and exporting the fish. MIFCO will publicise prices weekly”.
MIFCO said the government and the company will pay the money owed to the company Monday. Thus:
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The government has paid MVR 353 million to fishermen so far this year
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In addition, an additional MVR 389 million was released to fishermen from the company's revenue
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MVR 831 million has been paid to fishermen this year, including credits for oil and ice
“MIFCO has so far met its additional needs through loans and government assistance as the payments for fish purchased from fishermen and the cost of buying, processing and selling fish are much higher than the income from selling fish in the international market,” it said.
MIFCO said it was not financially sustainable to buy fish from fishermen without taking the market price into account.
Speaking to Atoll Times, MIFCO PR Manager Ibrahim Saeed said the price at which the company can purchase fish without loss is MVR 12. However, the company buys a kilo of fish at a higher price as the government subsidises it, he said.
“For example, we are agreeing that MIFCO will be able to buy fish at a given date at MVR 18 or MVR 16 based on the market price. However, in the manner in which the government subsidizes, MIFCO may issue the price at MVR 20,"he added.
"We will look to find a fair price for both MIFCO and the fishermen. These prices will be published every week”.
The cash strapped MIFCO has been buying fish at MVR 20 per kg, much higher than the foreign market price. The previous government had raised the price of fish to MVR 25 during the presidential campaign, but the incumbent government reduced it to MVR 20 in February.
“MIFCO will continue to take strong measures in collaboration with relevant government ministries to increase efficiency, increase revenue and reduce costs,” the statement said.
MIFCO's decision comes amid serious financial problems. The government has to pay the company to buy fish at a price that MIFCO cannot buy. Now the government's financial situation is worse, and the money owed the fishermen is not paid properly.
Government officials agree that the state's financial situation is so poor that it has to cut the hundreds of millions of Rufiyaa subsidy given to MIFCO. Therefore, MIFCO's decision comes as part of the measures being taken to reduce government expenditure.
