A shipping operator in the Marshall Islands says a reduction in the subsidy from the Ministry of Transportation is not encouraging services to the outer islands.
Kenneth Kramer, whose company Pacific International Inc., operates the Mercy K cargo vessel, has told the government that it cannot provide outer island service at the subsidy rates being offered.
This is despite the fact that its ship carried the most copra of any vessel in the country last year.
While Pacific International has rejected the government¹s offer, an official with the Tranportation Department says two other privately owned cargo vessels are now running an outer island service under the new subsidy system.
About a third of the Marshalls' population lives on remote outer islands that can be reached only by ships.
The main cash crop on these isolated islands is copra.