NATALIA SHAGAIDA: “TARGETED AID FOR THE NEEDED HAS MORE ADVANTAGES FOR AIC THAN ARTIFICIAL REGULATION OF PRICES”

Natalia Shagaida, Head of Agrarian Department of the Gaidar Institute, noted in a discussion organized by the Center for Strategic Research (CSR) that instead of an artificial regulation, targeted food assistance to the most vulnerable groups of the population could be much more beneficial for the domestic agro-industrial complex (AIC). The expert's opinion is quoted by Kommersant.

Amid the sharp ups and downs in world prices for agricultural products and a drop in incomes of the households that has intensified in the wake of "coronacrisis", it is critical to find a balance between the support for domestic food market and agricultural exports. State regulation of prices for socially significant products threatens the agricultural export plans as well as the entire agricultural sector with its economy basing on export revenues.

Thus, the introduction of duties only on grain exports may result in a loss of more than Rub 200 billion for Russian producers, while the use of protective duties is becoming a universal tool for “regulating” supply at the domestic market.

As Natalya Shagaida noted, currently about 30% of individuals fail to ensure the recommended standard, only 85%. For example, among 10% of the least well-off Russians (first group) purchasing the cheapest food stuffs, about half of their expenses fall on food, however, they ensure only 66% of the recommended standard. To "stretch" the first and the second (providing about 75% of the standard) groups to 85% of the rational set, it takes about Rub 400 billion, which she calls "peanuts" compared to the total food spending of the Russian households.

Thursday, 04.02.2021