Greek Rural Dev. Min.: Incentives for farmers to increase domestic production

It never rains but it pours. The war in Ukraine caused an unprecedented humanitarian crisis in the “heart” of Europe, exacerbated the energy crisis that had been going on since last September, and caused a food crisis.

Food transports have become difficult, trade in commodities from Russia and Ukraine has been interrupted, fertiliser prices have skyrocketed due to the Russian embargo and reduced production of chemical plants as gas prices rise.

The Result? Food insecurity has led consumers to supermarkets, creating artificial demand, market shortages and speculative practices.

In any case, as the Greek Minister of Rural Development and Food, Mr Georgantas assured, in an interview with the journal “To Vima”, the sufficiency of goods in the Greek market and added that “we will not allow” any kind of artificial shortage to be created. As for speculation, he argues that it can be curbed by setting up the system of compulsory recording and sending of data on agricultural stocks.

At the same time, as he points out, the Ministry of Rural Development and Food provides incentives to increase Greek production. These include the inclusion of common wheat in the coupled payments as well as the “release” of farms declared for fallow land or in the greening scheme, so as to be cultivated (e.g. with corn, legumes, etc.).

“We must all – Greece is already doing so – reconsider our priorities in production and strengthen products that we imported from warring countries,” the minister stressed.

As for the need to support farmers, the government, according to Mr Georgantas, will take advantage of the activation of the European Union’s crisis reserve, a fund of EUR 500 million – an amount derived from the direct payments of unused farmers. Of these funds, over EUR 26 million corresponds to our country, which can be increased by 200% with national resources. In addition, funds are also expected to support fishermen, with an envelope of around EUR 45 million to be allocated to Greek livestock farmers, based on the 2021 annual turnover, in order to provide them with feed and not to abandon their farms.

Αre we threatened by a global food crisis? Are you concerned?

“It is a fact that Russia and Ukraine covered a quarter of the world’s cereal production. However, the global community needs to adapt to this new situation. And habits of over-consumption, excess and waste must be ruled out from this new situation. The planet can feed us all, as long as the products produced are properly managed. “We must all – Greece is already doing so – reconsider our priorities in production and strengthen products that we imported from warring countries,” the minister stressed. Proper planning and programming on the one hand, and proper allocation and management on the other, will avert the risk of a global food crisis. ”

Are the services responsible able to establish that the supply chain in Greece is functioning smoothly? Is there a sufficient supply of the basic consumer goods on the Greek market?

“Greeks can rest assured that there is no risk of a food crisis. There is a sufficient supply of goods, and their availability must be guaranteed. We need to stay calm in the face of any artificial shortage attempted to be created. ”

With regard to cereals, which has been much talked about in recent days, what percentage of imports is covered by Ukraine and Russia? Fromch what countries are we going to import these goods ?

“From Russia and Ukraine we imported about 25% of the consumption of common wheat. Concerning the hard wheat, there is sufficiency and we do exports. The approximately 250,000 tonnes of common wheat we imported from the warring countries are already being replaced by imports from Germany, France, Hungary, Bulgaria and Romania, from the EU and from Canada as far as third countries are concerned. ”

Is it possible to cover domestic consumption from Greek wheat?

“To be covered by domestic production there must be an increase in Greek production. As Ministry of Rural Development and Food, we are giving incentives, such as the inclusion of common wheat in the coupled payments, and we believe that this is going to help our producers. At the same time, farmers who have declared their farms for fallow or greening are given the opportunity to cultivate them without losing the advantages they have through the EU.

Apart from the  supply chains where a precautionary cap on sunflower oil, flour, seed oil, sugar was decided to be imposed, there is a prospect to set corresponding measures at a central level.”

Is the food purchase voucher one of the solutions that has been considered by the government?

“This is not something that we have been concerned about, as there is a sufficiency of goods in the Greek market .”

The EU strongly supports the avoidance of restrictions on food exports. Is there any possibility, however, of putting a ceiling on exports of some Greek products?

“The free market operates by rules, with its basic rule being supply and demand. Everything depends on that balance. In any case, our concern is the adequacy of goods and the coverage of the needs of the Greek family. ”

You said a few days ago that “if farmers and stockbreeders continue to produce, we have nothing to worry about”. However, Greek producers warn that it is not worth continuing their production as the costs of inputs, supplies, transport have soared, due to the war and the benergy price rallies. Is there a budgetary margin to support Greek farmers?

“The Greek government decides having a sense of responsibility. The same applies to Greek producers. As far as we are concerned, the government has taken steps since autumn to mitigate the effects of the energy crisis. We have already allocated more than 200 million euros exclusively to support producers, who also benefit from the recently announced measures to support the general population, which exceed 1.1 billion euros. We are monitoring the development of the crisis, and month by month, we are trying to give further support to our producers, either through decisions from national funds or by incorporating European funds. In addition, at the last Council of Ministers I raised the issue of supporting fishermen, a proposal that had been put forward by southern countries and Greece. Moreover, approximately 45 million euros will be paid to support livestock farmers, so as to be supplied with cattle feed, an amount that is going to be allocated on the basis of the 2021 annual turnover. ”

What about the price hikes. How are we going to tackle unfair commercial practices and profiteering?

“We have already taken action. The government, last week, passed a special provision to prevent any speculation. The establishment of a system of compulsory recording and sending of data concerning the stocks of agricultural products combined with strict controls is a deterrent to any possible speculative disposal. ”

In its toolbox, the EU allows Member States to apply reduced VAT rates in order to curb retail prices. Are you going to apply this practice? What other “tools” will you use to contain price increases?

“The crisis is under way. We are watching the evolution of this phenomenom and intervene in a targeted way, in order to have both adequacy and availability of goods. There are different tools that we are going to use depending on the evolution of the crisis and the need to bring prices to reasonable levels. “