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Economy

Prices Soaring, Greeks Now Gird for Foodstuff Shortages Too

ATHENS – Greece’s New Democracy government said it’s adopted a plan to deal with shortages of commodities such as bread wheat, maize and sunflower oil being limited because of the effect of Russia’s invasion of Ukraine.

Those two countries produce many essential goods that are supplied around the world but European Union sanctions and the bombing and attacks in Ukraine are lessening the ability to produce and distribute them.

The war has also created big spikes in fuel costs and other energy needs, including gasoline, with the government providing a pittance in subsidies to help consumers deal with it.

There’s also the spillover on animal feed costs that’s making prices jump for fresh chicken, rising sone 30 percent and with food and fuel expenditures making up 45 percent of the budget of Greek households, many families saved only because nearly 75 percent own their homes outright without mortgages.

More costly fertilizers have also raised the production costs of fruit and vegetables producing a spiraling effect across the board so much that the government is mulling reducing a 24 percent Value Added Tax (VAT) on food.

Prime Minister Kyriakos Mitsotakis, who long ago turned his attention away from the COVID-19 pandemic to focus on a faster economic recovery, led a meeting to set up the plan to deal with the shortages, said Kathimerini.

That’s aimed at trying to find supplies elsewhere although much of the European Union and world has the same problem, with a backup idea being producing more domestically and rationing some goods.

Based on a proposal by Rural Development and Food Minister Giorgos Georgantas, the plan would put in place mechanism to ensure there’s no hoarding purchasing for products from Russia and Ukraine.

Greece will seek alternative markets for the supply of these products in places like Bulgaria, Romania and other European countries, the United States, Canada and Argentina, and animal feed from India, Malaysia and South America.

Greece gets some 70 percent of its bread wheat from Ukraine and Russia and there’s no sense of when those imports would resume with the EU considering further sanctions over Russian soldiers executing Ukrainian citizens in the streets.

Greece’s flour industry reserves are sufficient for about two months, while corn imports to Greece so far amount to 500,000 tons, the paper said, no report what would happen after that if the backup plan doesn’t work.

A Food Safety Committee is being reestablished to monitor inventory of goods and the government earlier said it would take action against any businesses seen gouging although it wasn’t said how that would be determined.

To get more food grown in the country, there will be subsidies for maize for five years, in consultating with the European Commission, and incentives for summer crops that many farmers shun because of reduced profits, while the amount of sunflower oil going to make biofuels will be cut.

 

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