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Liubovė, a 59-year-old retiree, told reporters that while shopping, she did not understand why she could no longer buy as much for a state pension as before. But the retiree is convinced that the government has something to do about it.
“All food prices are going up. Everyday products like sugar, bread, eggs and chicken have become too expensive,” he said.
The higher prices made Liubov think twice about adding something to the cart, as well as more frequent purchases at the cheap retail chain Dixy.
“The government must make sure that people do not go hungry. But the hunger is already here. I see many NGOs and churches that help feed those people. That should be the responsibility of the state,” he said.
Food prices have long been a hot topic in Russian society.
Rising world prices, a weaker ruble, and factors such as the bird flu outbreak, which led to shortages of eggs and chickens, and rising commodity prices have only exacerbated the economic crisis and contributed to the decline. of living standards for several years.
Photo by Scanpix / ITAR-TASS / Mall in Russia
Official figures show that food prices in Russia rose 7.7 percent last year. This is the highest growth in the last five years. And net income grew just 1.5 percent. In terms of inflation, Russia’s net income has fallen by more than a tenth since 2013.
In December, the government introduced maximum prices for basic products such as sugar and sunflower oil. Then, taxes on exports of cereals and other agricultural products were increased to prevent them from being sold abroad, writes The Moscow Times.
President Vladimir Putin and Prime Minister Mikhail Mishustin have urged supermarkets and producers to do everything possible to keep food prices low.
However, the prices of products such as eggs, sunflower oil, meat, fruits and vegetables have risen in double digits.
“I first noticed it in November when the price of apples and tomatoes went up. Now I buy products through sales. If there’s anything I can live without, I’ll wait for a discount. But I can’t help buying products like milk, eggs, bread and meat, ”said Victoria, a 25-year-old saleswoman at the supermarket.
„Scanpix“ / ITAR-TASS nuotr./Maskva
Ineffective response
Government-imposed price restrictions have been criticized by economists as a populist and ineffective response to the concerns of millions of people.
“Price capping is a measure of desperation. This is very bad for the economy in the long run, it undermines the motivation of entrepreneurs to invest in agriculture and does not solve any problems,” said Ruben Enikolopov, rector of the New School of Economy, to The Moscow Times.
Andrei Kolesnikov, an analyst at the Carnegie Center in Moscow, believes such measures are designed to combat the consequences of the problem, not the causes. According to him, the real economic problems of Russia are deeper: the excessive role of the state in the economy, weak competition, a weak ruble due to the arrogance of foreign policy.
Russia cannot avoid the effects of rising world prices, but there are short-term measures the government could take, according to economist Vladislav Inozemtsev.
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For example, you could reduce the sales tax on agricultural products. Or the government could act as an intermediary to buy raw materials at market prices and sell them at a discount to processors and producers.
The problem is bigger
The rise in food prices is felt so strongly across the country due to the difficult economic situation in Russia.
“The key problem is that the people are poor,” said Vladimir Milov, an economist and former minister who is now an opposition figure.
“There has been no economic growth in the country for a long time.” We are in a constant crisis, we have seen a decline or stagnation in real income for seven years, “he told The Moscow Times.
“Food prices are slower than 20 years ago. But that was not a problem, since incomes increased and people were able to buy at higher prices. Now they have no money, so this is much more of an issue. delicate, “said Milov.
In his view, food prices are just one part of increased socio-economic unrest. This dissatisfaction led to a record low rating from the ruling United Russia party and increased dissatisfaction with the Kremlin.
„Scanpix“ / ITAR-TASS nuotr./Maskva
The current measures, which limit food prices, will expire at the end of March. With the parliamentary elections scheduled for September approaching, the government cannot afford to ignore the problem.
“There is discontent among retirees and they are the most loyal voters. I do not expect a food riot, but it is realistic that the government can realistically face problems in the September elections,” Enikolopov said.
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