Food stamps considered for urban poor

PUBLISHED : Sunday, 01 December, 2002, 12:00am
UPDATED : Sunday, 01 December, 2002, 12:00am

The government is looking at distributing food stamps to millions of urban poor who are not paid their monthly living allowance, because many authorities do not have the money.

The proposal, similar to a scheme used in the United States, was made by Xu Xiaoqing and Chen Xiwen, two leading economists at the State Council's Development and Research Centre, a top think-tank, the News Weekly reported yesterday.

At the end of September, 19.6 million urban residents living in poverty in China qualified for the minimum living allowance, which varies from 150 yuan (HK$142) a month in cities in the interior to more than 300 yuan in rich cities in the east. However, many governments are too poor or too corrupt to pay it, meaning millions have to live off the little money they make from odd jobs, or borrowing from friends and relatives.

Under the proposal, these people would get coupons to exchange for food.

The economists argue this is a better way to help the poor, since local governments cannot afford to pay the allowances.

They also point to figures that show the number of urban poor is rising. Data from the State Statistical Bureau shows that the proportion of workers laid off from state firms who found new jobs fell from 50 per cent in 1998 to 42 per cent, 35 per cent and 30.6 per cent over the next three years respectively.

The economists also argued that giving help in the form of food stamps would prevent the recipients wasting the money.

The economists suggested that about 50 per cent of funding for the food stamps would come from the central government, 20 per cent from the provincial government, 20 per cent from city authorities and 10 per cent from the locality. The stamps would be exchangeable at government shops for grain, cooking oil and other items.

But critics point to a previous food-stamp scheme which was scrapped in July after being exploited by corrupt officials. State shops tricked the poor by selling them low-quality rice and oil at high prices, making huge profits for the managers of the shops and the officials responsible for them.

Another problem is that with the retail sector largely in private hands, there are few state shops, making it difficult for those with stamps to spend them.

The issue, critics say, is how to set up a system for the equitable distribution and use of the stamps to ensure they are convenient to use, and do not become an additional channel for local officials to make money at the expense of the public.

The US began its scheme in January 1979 and last year provided 17.3 million poor people with relief worth US$34 billion (HK$265 billion), more than half in food stamps.