Like many other countries, Tunisia is strapped with a longstanding and increasingly unaffordable food subsidy program. In 1988, the program represented 8.5% of government expenditures and 77.6% of the net government deficit. While cutbacks are necessary, the Government of Tunisia must ensure their political acceptability while also maintaining the food consumption levels of the most vulnerable population groups. This report analyzes food subsidies in Tunisia and alternative means of targeting these subsidies. Part I describes major features of the country”s food subsidy program, develops a framework for assessing targeting options in the Tunisian context, and provides descriptive statistics on food consumption patterns. Part II examines international experience with food subsidies and food subsidy targeting efforts and summarizes the major lessons learned. Part III presents a preliminary analysis of the short- and medium-term relevance of subsidy reform policies for Tunisia. These policies include: (1) targeted and self-targeted price subsidies incorporating new product development, (2) increased direct food distribution, (3) food stamps, and (4) income enhancement efforts. (Author abstract)
