by Adorina Massing – The Vanuatu Government, represented by the Director General to the Ministry of Finance and Economic Management (MFEM), has signed a Memorandum of Understanding (MoU) with Santo’s copra buyers on Saturday 15 December 2018 in Port Vila.
The MoU stipulates that the subsidy will begin on Monday (yesterday) 17th December 2018 signed by Director General August Letlet and copra buyers.
There have been speculations that the subsidy will set the price of copra per tonne to be fixed at Vt40,000, however this will not be the case.
According to COM Dec 203/2018 – Copra Subsidy, it was approved that an amount of Vt10,000 will be added to the normal price of copra set by the local copra buyers.
Therefore, the subsidised price of copra per tonne will not be fixed at Vt40,000 as speculated.
The copra subsidy began yesterday and will continue until exhaustion of the budget allocated for it, which is Vt150 million.
The subsidy works as an additional amount of money to price per tonne of copra, meaning that the price per tonne of copra the exporters set will increase by the amount of the subsidy.
The maximum amount of subsidy per tonne of copra is Vt10,000.
This means that if exporter ‘A’ sets the price per tonne of copra equal to Vt15,000 per tonne, then the subsidised price per tonne will be equal to Vt25,000.
The subsidised price will not be higher than Vt40,000 per tonne. When exporter ‘A’ sets a price equal or higher than Vt30,000 per tonne, then the subsidy amount will be equal to the difference between Vt40,000 and the price set by the exporter – in this way the subsidised price will never be higher than Vt40,000.
When exporter ‘A’ sets a price equal or higher than Vt40,000 per tonne, the subsidy will cease to be disbursed.
Why Vt40,000? Because Vt40,000 per tonne is a good price to copra producers. For this reason, the budget of the subsidy will be saved for times in which the copra price per tonne is too low for copra producers to make good profits.
The subsidised prices will be displayed in a letter signed and stamped by the Director General of the ministry of Finance and Economic Management and will be displayed near the weighbridge for all to see.
There will also be a Facebook page (yet to be developed) to disseminate any information regarding the copra subsidy and any changes in the prices.
The approved subsidised prices will be binding for the period stated in the official document. The prices may change within the period stated in the document but this will also be made known to the general public.
adorina@dailypost.vu
Source: The Vanuatu Daily Post
