Filenews 30 March 2022 - by Angelos Nikolaou
The rally of price rises in commodities due to the war in Ukraine is not about to stop, and everything indicates that households will be forced to pay even more money for both the purchase of products and energy. Food prices are already recording huge increases, electricity tariffs are unprofitable, and fuel increases are also dramatic; in fact, as was mentioned at yesterday's session of parliament's Committee on Agriculture, new increases in electricity and fuel are coming, due to the fact that no measures have been taken to prevent them and not from external factors such as war. The Ministry of Commerce has in its hands a powerful tool - the ceiling - which it can use for a range of products, even if there is profiteering in the market.
The first effects of the war have appeared on raw materials such as cereals and the fuel market, with prices having soared by 70% within a year and already increases have passed to finished products such as meats. As of Monday, the increases in the prices of pork and chicken are completed, with increases of 20% for pork and 23% for chicken. Sheepmeat and goat meat, although there are reports of an impending 12% increase, have so far not switched to wholesale tariffs.
During yesterday's session it was mentioned that increases in production costs threaten the sustainability of the primary sector and it was stressed that immediate support measures are needed. Speaking before the Agriculture Committee, the general director of the ministry, Andreas Gregoriou, referred to the state's actions to maintain stocks of grain, barley and corn. He added that after an international tender, prices of around €410 per tonne were offered. He explained that these stocks last for a month and a half. He noted that the storage of the cereals will be undertaken by the importers. According to Mr. Gregoriou, since the Government recognizes that there is a problem, it has made contacts with agricultural organizations in an effort to prepare proposals for the support of the rural world.
The chairman of the Committee of Agriculture of the House, Yiannakis Gavriel, in his statements said that raw materials, fuels, electricity, fertilizers, medicines show huge increases in recent months and threaten the viability of farmers and stockbreeders. "For example, from about €200 per tonne a year ago, feed costs up to €600 today." Farmers, he said, as the weakest link in the food chain, bear the entire increased cost of production. He pointed out that while there are increases in retail product prices, producers do not receive a single cent. Mr. Gabriel called on the Government, away from bureaucratic procedures, to directly support all sectors of agriculture and livestock farming. He added that it is a matter of the survival of the agricultural sector with a knock-on effect on the whole of society.
On his part, the president of the Movement of Ecologists, Charalambos Theopemptou, said that in addition to the increases that exist, new increases in electricity and fuel are coming due to new taxes. He added that the increase in fuel will come due to the inability of the government to succeed in using Renewable Energy in transport. He noted that while the target was 10%, in Cyprus we are at 6%. To cover the difference, the Government will impose a tax on fuel with a further increase per liter, he added. Therefore, he said, this increases farmers' costs and does not improve their incomes. As far as electricity is concerned, he said that this is constantly increasing with the emission allowances purchased by the EAC.
PLAYS AND CAPS ON A RANGE OF PRODUCTS
The deputy director of the Consumer Protection Agency, Antonis Ioannou, said that we live in a free market with competitive trends. He added, however, that if it is found that some people are exploiting to profit at the expense of consumers, the commerce ministry is ready to intervene. He noted that the Government can impose maximum prices for a range of products in order to protect consumers and farmers.
Concern about sustainability of the agricultural sector
PEK Secretary General Christos Papapetrou said that increases in the agricultural sector had worsened as a result of the crisis in Ukraine. He added that the situation is not manageable by the farmers themselves, the stockbreeders, but also the fishermen. The demand of the agrarian movement, he said, is to use all the tools in the hands of the Government following the recent decision of the EU Council of Agriculture Ministers, so that financial support can be paid as soon as possible to the rural world. "We ask the Government to lower the VAT rates, in terms of electricity consumption, but also agricultural oil," he added.
The General Secretary of Panagrotikos, Tasos Giapanis, mentioned that external factors, such as the increase of electricity, the increase of fertilizers, animal feed, raw materials, have rapidly and exponentially increased the cost of production. "In addition to this came the crisis of war in Ukraine, which brought other chain problems. We have to say that the meeting with the minister of agriculture and the briefing for us was in the right direction," he said. "In the right direction to 'take advantage' of the tools that the EU itself gave us after the decision of the Council of Agriculture Ministers", so that we can relieve farmers at the very least," he added.
The General Secretary of the Union of Cypriot Farmers (EKA), Panicos Hambas, noted that "as a result of the pandemic and the Russian-Ukrainian war, we are currently facing the problem of the food security of the Cypriot people". He said that in a meeting held on Monday with the minister of agriculture, measures moving in the right direction were discussed, while adding that a meeting with the President of the Republic is expected, in which "we will table a road map, which will alleviate this huge problem", he said.
On behalf of the Euroagrotikos, G.G. Lambros Achilles suggested that instead of a ceiling, the profit margin for cereals should be legislated. He noted that he is concerned that due to the prevailing conditions, the Cypriot market will be flooded with European products and strict controls should be carried out in order to avoid cypriotizations. He disagreed with the granting of horizontal aid to all farmers, noting that the sector that is positively affected by the crisis, namely wheat producers who will sell the cereals at an increased price, should be excluded.
