Direct Translation via Google Translate. Edited.
by Daniil Moskovsky
[REGNUM] Potatoes are more expensive than buckwheat, milk is more expensive than gasoline, fish is becoming a delicacy. Russian families are faced with a situation where basic food products are becoming an increasingly serious expense item.
Over the past year, prices for the most basic products have skyrocketed several times. Potatoes have risen in price by 171.5%, regular onions have become more expensive by 80%. At the same time, official inflation barely exceeds 10%, while the reality on the shelves looks completely different.
EVERYTHING IS GETTING MORE EXPENSIVE
In addition to the most expensive products - potatoes and onions - prices for many other everyday products have increased significantly:
Dairy products: pasteurized milk increased in price by 22.8%, sour cream by 22.3%, hard, semi-hard and soft cheeses by 19.6%, cottage cheese by 13.6%.
Bakery and pasta products: bread made from rye and mixed flour - by 17.3%, bread and bakery products made from wheat flour - by 16.3%, wheat flour - by 8.6%, pasta made from premium wheat flour - by 6.8%, vermicelli - by 5.6%
Fish and meat products: frozen whole fish - by 29.0%, beef on the bone - by 15.0%, pork on the bone - by 9.4%, lamb on the bone - by 7.4%, semi-smoked and cooked-smoked sausage - by 6.2%, cooked sausage - by 5.9%, sausages, frankfurters - by 4.5%.
Canned goods and groceries: cookies - by 10.9%, canned fruit and berry preserves for baby food - by 8.9%, canned meat preserves for baby food - by 8.7%, black tea - by 7.6%, canned vegetables for baby food - by 3.6%.
Vegetables and fruits: fresh white cabbage - 55.0%, apples - 17.7%, bananas - 9.8%, fresh cucumbers - 10.8%, beetroot - 9.4%, fresh tomatoes - 4.1%.
Cereals and other: millet - 10.7%, edible table salt - 14.5%, polished rice - 2.7%, granulated sugar - 0.6%.
A BLOW TO THE WALLET
Yuri Lyandau, Doctor of Economics, Dean of the Faculty of the Plekhanov School of Business at the Plekhanov Russian University of Economics, explained in a conversation with the Regnum news agency that the problem of rising food prices should be considered taking into account two aspects.
The first is the growth of production costs. Lyandau notes that indirect and distribution costs are growing, since absolutely everything is becoming more expensive. Seeds are becoming more expensive, which Russia still does not produce at the proper level.
Fertilizer prices are rising, despite the country being a major producer. Logistics costs are increasing – gasoline, cars, transport.
Climate anomalies have been added to the traditional problems. "This has never happened before: weather anomalies occur, which negatively affect the harvest. There may be an early warm spring, everything begins to bloom, and then at the end of April - beginning of May there are terrible frosts, and, naturally, many crops perish," says Lyandau.
The second and perhaps more painful aspect, according to Lyandau, is the greed of retail chains. According to him, they have effectively divided the Russian market and are setting astronomical trade markups.
VOICE OF THE EARTH
Tatarstan farmer Ramil Fakhriev told Regnum how these problems affect producers. He explains the disproportion between agricultural prices and wages using the example of bulls.
Previously, they were sold for 100 thousand rubles - this was three months' salary of the average worker in the region. Now many receive 100 thousand or more per month, and bulls are still sold for the same 100 thousand.
Farmers are trapped: prices for their produce have increased only slightly, while expenses have increased dramatically. Fakhriev notes that due to the increase in fuel costs and wages, farmers have not become richer from the price increases.
According to him, the situation has become so difficult that many colleagues are simply abandoning agriculture.
"I run a thematic group on a social network, and many people there have started selling their livestock because keeping them is becoming unprofitable. As a result, people start doing other things. It's easier for them to slaughter their livestock, drop everything, go somewhere to work and earn money there - it's much more profitable," the farmer shares his observations.
NEED SUPPORT
The system of state support for agricultural producers has drawn particular criticism. Fakhriev explains that subsidies are only given for dairy production and that if bulls are kept for meat, subsidies are not given.
In order to receive support, you need to have at least six cows. The farmer notes that it is not easy for an ordinary peasant to grow such a farm.
Fakhriev gives another illustrative example: "I need a tractor today. This tractor costs a million rubles with all the equipment. If I take out a loan, I won't be able to service it.
On the other hand, if I have a million in spare money, I have two options: buy a tractor and start farming, or put the money in the bank and just earn interest. Today, earning interest is more profitable."
PROFIT ABOVE ALL ELSE
Yuri Lyandau gives a harsh assessment of the actions of retail chains: according to him, they are taking advantage of the situation and trying to earn as much as possible.
He says that some of them are discussing the introduction of dynamic pricing. Lyandau cites existing examples of trade manipulations - in the Moscow region, on weekdays, the price of food is one, and on weekends - another, because many summer residents come.
The seasonal price increase looks especially cynical: "Even in December, in the second half of the month, prices increase significantly. And we say that this is not some kind of 10% inflation, but a twofold increase, simply because it is the New Year holidays and everyone understands that they will buy everything anyway."
THE RICH ALSO CRY
The situation with delicacies is also difficult. Imported products have become significantly more expensive due to the fall of the ruble and problems with logistics.
“In our restaurant, oysters have gone up in price by 15%, truffles by 20%,” says the chef of one of Moscow’s fine dining restaurants. “ Customers sometimes complain, but they still order.”
WHAT'S NEXT?
The forecast of the interlocutors of IA Regnum does not inspire optimism. Yuriy Lyandau warns that prices will continue to go up. In his opinion, there will be a gradual increase at the level of inflation, but he will not be surprised if prices for some types of products, especially susceptible to shortages, increase by 30%.
The economist identifies two factors for further price growth: growth due to inflation and rising cost prices, as well as the unregulated activities of retail chains with their inflated markups.
Fakhriev is also skeptical about the future: according to him, if he continues to raise prices, he will lose customers.
For now, it works as it always has, but it will only recruit a new batch of animals after careful calculations of profitability.
SYSTEM SOLUTIONS
Most likely, without systemic changes, the situation will only get worse. Lyandau insists on the need for state regulation of the pricing process for products manufactured in Russia.
Farmer Fakhriev proposes specific measures: he would like small and beginning farmers to be given subsidies for small-sized equipment and business development. In his opinion, this would help increase production.
The situation with food prices has become one of the main social issues in Russia. Simple products have become a serious expense item, and farmers have become a risk group.
Without systemic measures to support agricultural producers and regulate trade markups, the situation will only get worse, warn IA Regnum’s sources.
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