How will the agreement between the government and farmers affect price of groceries?

Neither side is completely satisfied with the agreement between the Government of Serbia and the farmers, which ended roadblocks across the country. As a result, it is almost certain that, in a few months, the retail price of cooking oil will go up by about 30 percent.

Namely, two days ago the government reached an agreement with the farmers, which stipulates that the final price of sunflower is 73 dinars per kilogramme, i.e. 620 euros per tonne, the government agreed to pay the farmers for this year’s yield by the 15th October of the current year.

By the same agreement, the middleman’s margin is limited to a maximum of 2.6 dinars, while the cost of transporting the goods from the place of purchase to the sunflower mill is borne by the mills themselves. As for fuel, the incentive in the coming period will amount to 20 dinars per litre, while the milk premium for one quarter in 2022 will increase to 15 dinars. In addition, the Government undertook to talk with livestock farmers in the coming period, to devise measures to improve the livestock sector. The same agreement guarantees farmers a moratorium on payment of loans for a period of 12 months.

Agroeconomist Vojislav Stanković also believes that it is good that a compromise was reached and that it is logical that both sides had to give up some of their demands.

“It should be mentioned that the agreement reached will lead to an increase in retail cooking oil prices by about 30 percent. This will not happen immediately, but the price change should be expected in January next year,” our interlocutor points out.

According to him, as a result of the crisis, there is a possibility of an increase in the price of a number of food products before the sowing season starts in June, and the Government should do something to prevent an impact on consumers.

“One of the ways for that is for the authorities to make a decision on subsidizing the prices of fertilizers and fuel. The second is for the government to form an agriculture council, which would monitor the situation and propose adequate solutions in order to avoid mass retail price increases of food products,” Stanković concludes.

(Danas, 18.08.2022)

This post is also available in: Italiano

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