ECONOMY

Glut production stirs farmers

Quite a few Greek agriculture products are suffering from distribution problems, adding to the government’s headaches. Peaches, rice, wheat, corn and potatoes are among those goods whose prices are very low this year after European and global overproduction and the application of certain rules for the first time. As products fail to reach the market, discontent is growing among farmers across Greece, with the government walking a tightrope in its effort to solve the problem: An indirect ban on imports and attempts to mediate between producers and merchants by the Ministry for Agricultural Development and Food have worried European Union agencies as well as some embassies, who see these moves as market intervention. Critics point out it was not so much the measures themselves but the way they were applied that created discontent: Market circles said the ministry had tackled the issue clumsily. The first problem arose in July with the prices the manufacturing industry gave to peach producers. The government then promised «everything» to the manufacturers so that they improved their offer to producers. This included granting them 5.38 million euros through a staff training program. In mid-August the mission of food aid to churches, charities and hospitals was approved, costing the state just under 3 million euros. By the end of August the ministry had decided to impose additional control measures on imported cereals and on tomato products from non-EU countries. The new Common Agricultural Policy (CAP) on rice also created fresh problems for farmers, with the intervention threshold lowered to 15 cents per kilo from 30 cents, while intervention mechanisms could only use up to 4,500 tons. Excessive wine product imports from third countries have undermined the absorption Greek wines. The ministry again announced stricter controls against labeling imports as Greek. Meanwhile the effective ban on cereal imports, which blocked them at Greece’s borders while samples gathered in warehouses without any laboratories to examine them, resulted in a protest by merchants and flour industrialists. Then Deputy Minister Alexandros Kontos said imported cereal carriages could «leave» border posts if their control results were not out. Last week the ministry imposed added controls on imported corn. There are already rumors that in the next couple of weeks corn from Serbia will enter the market costing half as much as the already cheap Greek one, priced at 14 cents per kilo. The ministry’s policy of obstructing imports so as to protect Greek farmers has obviously upset the EU and other exporters to Greece, such as Canada, Ukraine and Russia. A market observer comments that although some measures were essential to assist Greek agriculture under these tough circumstances, they were taken without prior consideration. «They should have announced decisions about controls earlier, so that they applied to the entire production, including the local one, and everyone would be prepared,» says the observer. That way measures would be really effective and cause less of a stir.