RUSSIAN BAKERS NEED TO BE SUBSIDIZED

Food is rapidly becoming more expensive in Russia, and the manufacturers continue to call for the financial support from the authorities. The fall in the value of the national currency and the pandemic are to blame here. There are various options of support. The bakery manufacturers ask for the subsidies due to the rising flour prices.

The manufacturers of meat and berry products suggest reducing the cost of delivering goods to the stores and giving compensations to the needy people. Thus, in their opinion, it will be possible to support the demand for products and save enterprises from the possible bankruptcy. The head of the National Meat Association (NMA) notes that the prices for soybean meat (20–30%), hatching egg (30–50%), amino acids and vitamins for pig farming (50–200%) have increased. The expert is inclined to believe that targeted subsidies for those segments of the population that are most in dire need of social protection measures will become optimal support measures.

A letter of request for the support to the Ministry of Agriculture was sent by the NUB (National Union of Bakery). The representatives of 20 companies from 24 regions of Russia asked the head of the ministry, Dmitry Patrushev, to subsidize the baking industry according to a scheme, providing an increase in the subsidies, depending on the wholesale prices of flour. 

In case of excess of the cost of flour at the rate of 20 rubles per one kilo, it is proposed to pay 78 kopecks for each kilogram from the country's budget.

At the same time, the experts from “Sovecon” company noted that the wholesale price of premium flour has already exceeded the twenty-ruble mark by 7 kopecks at the exchange trading last week.

The representatives of the NUB also asked for tax vacation and the maximum possible deferral of payments for communal services. Will the ministry meet the wishes of the bakers? Many experts doubt this, given that the authors of the letter did not submit specific data on the enterprises, the production of which became unprofitable. According to Andrei Sizov, the director of “Sovekon”, the support measures, proposed in the letter, do not have a positive effect on the entrepreneurship and most likely will not find support in the ministry. For example, the restrictions on wheat exports, proposed in the letter are irrational, since the quota of 7 million tons of grain, determined by the Ministry of Agriculture, has not been selected even by a quarter.

The Russian Union of Bakers spoke less specifically. The organization notes that they would be glad to receive any support from the state, given the increase in raw material prices. For example, 40% of the cost of bread is determined by the price of flour. However, the prices have increased not only for the raw materials, but for the bread making as well.