Lebanon faces food challenge with no grain silo and few stocks

The damaged grain silo following Tuesday’s blast at Beirut’s port area in Lebanon. (Reuters)
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Updated 08 August 2020

Lebanon faces food challenge with no grain silo and few stocks

  • Hand-to-mouth approach to food security has left nation of six million people at risk after Tuesday’s explosion

DUBAI: Beirut’s blast destroyed Lebanon’s only large grain silo, with plans for another in the country’s second biggest port Tripoli shelved years ago due to a lack of funding, the UN’s FAO, Tripoli port director and a regional grain expert said.

The destruction of the 120,000-ton capacity structure and disabling of the port, the main entry point for food imports, means buyers will have to rely on smaller privately owned storage facilities for their wheat purchases, exacerbating concerns about food supplies.

Lebanon, a nation of an estimated six million people, imports almost all of its wheat.

“There are smaller storage sites within the private sector millers because they have to store wheat before it is milled into flour,” said Maurice Saade, the Food and Agriculture Organization (FAO) representative in Lebanon. 

“In terms of grain silos, that was the only major one.”

Dozens are still missing after Tuesday’s explosion at the port that killed at least 154 people, injured 5,000 and left up to 250,000 homeless, in a country already staggering from economic meltdown and a surge in coronavirus cases.

With banks in crisis, a collapsing currency and one of the world’s biggest debt burdens, Economy Minister Raoul Nehme has said that Lebanon had “very limited” resources to deal with the disaster, which by some estimates may have cost the nation up to $15 billion.

The lack of a dedicated grain terminal, silo or grain elevators in Tripoli illustrates a hand-to-mouth approach to food security.

It mirrors how the state has resorted to emergency planning rather than long-term solutions in other key areas, such as the infamously flawed power sector and messy garbage collection, moving from one quick fix to another without the right resources or funding since the end of the 1975-1990 civil war.

“It is risky of course,” said Hesham Hassanein, a Cairo-based regional grain consultant. 

The country’s private millers, around eight in total, will have to navigate new logistics fast for the supply chain to run smoothly, even after some of them suffered damage from the blast. This means trucking wheat to nearby warehouses at a time when most of the traffic meant for Beirut, not just wheat, will also be diverted to Tripoli.

Lebanon’s government also did not keep a strategic reserve of grains. “What happens is the private millers store what they don’t have enough space for in their own storage in that Beirut silo and take from there when needed,” Hassanein explained.

“This was the inventory in the country, not a government strategic reserve in that sense and it was usually enough for two-and-a-half to three months of consumption.”

Economy Minister Raoul Nehme has said that only 15,000 tons were stored at the silo at the time of the explosion and that Lebanon needed an inventory of about three months’ supply at any time for food security purposes.

With a consumption rate of about 35,000 to 40,000 tons a month, that translates into more than 100,000 tons.

Lebanon imports 90 to 95 percent of its wheat, mostly from the Black Sea region. The bulk of its local wheat production is durum, a type of wheat more suitable for pasta.

On Thursday, Nehme said that his ministry had been planning to create a strategic reserve of around 40,000 tons but had not done so yet. “I saw we didn’t have a strategic stock, decided to buy one and got the approval of the council of ministers,” he said, adding that they had been in the final stages of negotiations.

“Luckily we did not, it would have been destroyed.” 


Liberalization of dollar exchange rate at hospitals leaves people dying in their homes in Lebanon

Updated 50 min 4 sec ago

Liberalization of dollar exchange rate at hospitals leaves people dying in their homes in Lebanon

  • Lebanese doctors emigrate after their money, lives, and homeland idea are stolen

BEIRUT: The American University of Beirut Medical Center (AUBMC) has adopted the banks’ approved dollar exchange rate, which is 3,900 Lebanese pounds, in a number of its departments instead of the official exchange rate, which is fixed at 1,507 Lebanese pounds.

This decision has sparked a state panic among people, who fear that the entire private hospital sector would follow suit.

Based on the decision of the AUBMC’s administration, the entrance fee to its emergency department is now 600 thousand Lebanese pounds. This fee did not exceed previously 190,000 Lebanese pounds. Moreover, a visit to a doctor in the hospital’s outpatient clinics jumped to 225,000 Lebanese pounds after it was a maximum of 120,000 Lebanese pounds.

The value of the Lebanese pound against the dollar collapsed during the financial crisis that Lebanon has been facing since the end of 2019. There are now three exchange rates for the dollar. The official exchange rate remains at 1,507 Lebanese pounds, and it applies only to imports of fuel, medicine, and wheat as well as hospitalization costs and insurance agencies. Banks apply an exchange rate of 3,900 Lebanese pounds for dollar deposits. The dollar exchange rate on the black market is 8,300 Lebanese pounds.

Lebanon is suffering from a shortage of dollar reserves at the Banque du Liban, and this has been reflected in the gradual removal of subsidies on basic materials, especially medicine.

The president of the Syndicate of Private Hospitals, Suleiman Haroun, said: “There is pressure on private hospitals, but we hope that part of the dues for private hospitals will be paid so that they can carry out their duties.”

Haroun warned that “if the subsidy on medical supplies and medicines is removed, people will die in their homes and not at the doors of hospitals.”

He said that he had been informed by an importer that the central bank had removed subsidies on sterilization materials.

Haroun pointed out that the decision of one of the major hospitals to adopt the dollar exchange rate of 3,950 Lebanese pounds does not apply to the official tariffs with the guarantors.

The most prominent of these guarantors are the National Social Security Fund (NSSF), the Cooperative of Government Employees, and tens of health insurance companies.

The director-general of the Cooperative of Government Employees, Dr. Yahya Khamis, warned that the hospitals’ adoption of a dollar exchange rate of 3,950 Lebanese pounds means that “disaster will inevitably happen.”

Bechara Asmar, head of the General Labor Union, expects other private hospitals to follow the example of the AUBMC early next week. He warned against “the policy of infiltrating the rights of the working class and people with limited incomes.”

He said: “This means an increase in the cost of the hospital bill to more than three times and the collapse of the purchasing power of citizens and guarantors. This will result from the inability of the NSSF, the Cooperative of Government Employees, military sectors, and insurance companies to fulfill their obligations. The citizens will have to bear the difference, which is equivalent to double what the guarantor companies pay.”

Asmar highlighted that “this will lead to the collapse of the health system as a whole.”

The decision’s advocates believe that adopting the banks’ dollar exchange rate for the pricing of hospital services is similar to what happens with the subsidized food basket – this subsidization adopts the dollar exchange rate of 3,900 Lebanese pounds, not the fixed official exchange rate of 1,507 Lebanese pounds.

An official in an insurance company said: “If the matter applies to all medical services in hospitals, the difference that will result from the hospitals and insurance agencies’ adoption of the fixed exchange rate will be borne by either the citizen or the insurance companies, which still charge the citizens insurance premiums at the official exchange rate.”

The head of the General Labor Union refused to adopt “any hidden tariff, as is currently happening, because this would be met with immediate action, taking to the streets, and staging sit-ins outside these hospitals.”

Health Minister Hamad Hasan stressed on Thursday that “subsidies for the health and hospital sectors and the medicine sector will not be affected at the present time, and this is out of the question.”

Hasan announced that a solution has been reached “between the Syndicate of Private Hospitals and the Ministry of Health requiring that dues are paid to private hospitals within a month for coronavirus patients through a loan of $39 million from the World Bank.”

He said: “The Ministry of Health follows the Lebanese law, and everyone must participate in the solution, not the other way around. Enough bidding on people’s pain. Any individual action taken by a hospital exposes it to accountability.”

Former Health Minister Mohamed Jawad Khalife, however, said: “The decision of the AUBMC is very transparent because all the hospitals charge patients based on the dollar exchange rate of 3,000 Lebanese pounds without officially announcing it. Let the minister of health kindly take from me an admission document into any hospital to realize that the 15-percent difference between the pricing of the Ministry of Health and that of the hospitals is received by the hospitals, which charge citizens 8,000 Lebanese pounds.”

It does not seem that the problem of hospitalization in Lebanon is limited to the financial issue. Hospitals are facing the resignation of many of their doctors, who are emigrating to other countries after accepting offers after the collapse of the purchasing power of the national currency.

One of the nurses at a well-known hospital in Beirut said: “The hospital is in a very bad condition as if it is deserted. Patients who used to come from abroad for hospitalization in Lebanon can no longer come because of coronavirus. Lebanese patients postpone non-urgent operations until after the pandemic. Some of the doctors whose incomes have declined due to the financial crisis and the coronavirus crisis began to emigrate abroad. Among these are well-known doctors.”

Former Health Minister Dr. Karam Karam said: “In the 1980s, doctors emigrated from Lebanon because of the war, but there remained hope in the country. Now, we have many qualified doctors leaving Lebanon either to the United States or to the Arabian Gulf countries, and the reason is financial. Many of these doctors’ children are continuing their education abroad, and the doctors are no longer able to pay their tuitions due to the freezing of their deposits.”

He added: “As a doctor, what I earn is not sufficient to pay my clinic's rent or my assistant’s salary. More seriously, there are a number of highly qualified histologists who will leave Lebanon as well. The situation is tragic. They stole our money, our lives, and our dignity. They even stole the idea of the homeland. They are a group of thieves and mafia controlling this homeland. They made us hate Lebanon and even Palestine because of what they do in their names.”