Alexey Plugov's comments on rising food prices

Many key food products have become noticeably more expensive. Government measures to contain prices sometimes backfire. What products will rise in price in the near future and how can this problem be solved by market methods.

Potatoes, carrots, beets

This year, 5.8 million tons of potatoes were harvested, while last year the harvest was 6.8 million tons. Aleksey Plugov, General DIRECTOR of the AB-Center Expert and Analytical Center for Agribusiness, said that in 2020 there was a high price for potatoes. Producers were expected to expand their planting areas to generate more income this year. However, this year the spring was late, and the area, on the contrary, had to be reduced. Then there was a hot, dry summer, and the land yielded less.

As a result, last year the wholesale price of potatoes was 8-9 rubles per kilogram. This year it has grown to 23 rubles. According to Alexey Plugov , in November the price may fall by a couple of rubles, but then it will start to grow again. By March, the wholesale price of a kilogram will reach 32-35 rubles. In stores, potatoes can be bought for 60 rubles in March and for 70 rubles in April.

Harvest of carrots and beets,  according to the expert , also decreased. Their value may rise in sync with the price of potatoes.

How to stop the rise in prices?

Russians' incomes are still falling, and prices are rising at an alarming rate. In October, Prime Minister Mikhail Mishustin instructed Deputy Prime Minister Andrei Belousov to coordinate work to curb food prices. According to the Prime Minister, the government "has quite a lot of proposals of an economic nature from other federal authorities to solve these problems"

According to Aleksey Plugov , the regulation of prices in an administrative-command way destroys the entire investment attractiveness of agriculture. "Imagine, world prices are high, manufacturers have invested in selling some products abroad, they invested resources. And then the authorities start to restrain prices. Maybe politicians will be able to earn a couple of rating points, but in the long run it's worse for everyone," -  the expert emphasized .

According to him , there are effective market methods that can make products available to the public. It is necessary to create inventory funds, purchase products from the manufacturer and save them. For example, the state can buy, for example, 200 thousand tons of buckwheat in a season when there is a lot of this cereal, and when there is not enough cereal and it is expensive, it can sell it, thereby reducing the price. So prices for buckwheat will remain at the same level.

Ministry of Industry and Trade: the ability of retail chains to contain prices is extremely limited 

If prices are not touched directly, but the problem is solved by market methods, there will be more investment and more production. So, earlier in RUSSIA MEAT cost several times more than in other countries. Now domestic production has improved, and Russian meat prices are even lower than world prices.