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Farming Is Claiming Compensation From Government

Farming Is Claiming Compensation From Government
By Elena Novozhilova
Belorusskie Novosty
The Belarusian Ministry of Agriculture and Provisions has applied to the government seeking compensations for the production of agricultural products because of the growing prices on energy resources, fertilisers, and materials. BelTA reported Minister of Agriculture and Provisions Leonid Rusak to have made this statement during the Ministry’s sitting on 27 February.
“We need to provide the cost calculations for agricultural products because of the growing prices on materials we use,” he said. The cost of nitrogen fertilisers have grown by 15.3% this year, phosphorus by 37%, electric power by more than 50%. The cost of gas, fuels, and building materials has also grown.
The Minister also said that there are two ways to cover these expenses: from the state budget and by increasing the price agricultural products are sold for. Leonid Rusak also finds it necessary to monitor prices on industrial and agricultural products in order to react adequately to even out the disparity.
On the other hand, Vice Prime Minister Ivan Bambiza reckons they should make do with what they have: “We need to talk about how to make farming more efficient, not about compensations”. He said that expenses should be balanced with incomings – farming should generate enough income to cover its expenses. With regard to support from the state, the Vice Prime Minister said that is already being provided as necessary.
The growing commodity prices around the world forced even more liberal governments to restrict grocery prices, but the Belarusian government declared its intention to let go off consumer prices.
Minister of Economy Nikolay Zaichenko explained that “the main idea about restricting inflation is to find the golden middle when production does not run into losses, and prices are not so volatile”.
Inflation in Belarus during January was 2.5%, while the Ministry of Statistics said that prices for the staple products grew by 15.9% last year.
Why is the Ministry of Trade so keen to raise prices? Deputy Minister of Trade Alexander Davydov said that it is because the country “is facing the situation when farmers get very little returns from their products”.
Still, the main problem now is not prices but the condition state farms are in and those continuous donations they receive from the state or industrial enterprises. The state has been trying to play the role of an investor in farming. Now farming is unable to pay back the credits it borrowed before. Most farms can hardly make enough money to stay afloat. In this situation, raising retail prices for groceries looks quite logical.
Anyhow, the state does not seem to be willing to make farming more attractive for investors. Vice Prime Minister Vladimir Semashko said the other day that “we are going to invest huge funds into villages before 2010 to raise them technologically”. He also said that “we keep agricultural prices lower than in Russia. It can’t carry on like this for long – we are moving towards market”.
Where is the state going to get these huge funds but from creditors? So, it will be consumers paying it all back again.

29 Февраля, 2008
  
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