Tatarstan hopes to restrain bread price growth through federal subsidies

Tatarstan hopes to restrain bread price growth through federal subsidies
Photo: Roman Khasaev

First subsidies from Moscow in 10 years

Bakeries and flour-milling enterprises of Tatarstan will receive federal support in the amount of 131 million rubles to curb the growth of prices for their products. This was reported on 11 March at the press conference by deputy minister of agriculture of the republic, Nail Zalakov.

The package of measures is aimed at protecting socially vulnerable categories of citizens, primarily pensioners, from a sharp rise in the price of bread. Out of the total amount of subsidies, 66,6 million rubles will be allocated to flour-milling enterprises, the rest — to bakeries. The subsidy originally was supposed to be 48,3 million rubles for bakers, but Tatarstan decided to add another 16,3 million rubles. By the amount of subsidies, the republic received more than many subjects — even larger amounts have been allocated only to the regions of the Ural Federal District, and Moscow and St. Petersburg were not included in the list of subsidised ones at all.

As Nail Zalakov specified, the money was allocated from the republican treasury quarterly. Photo: tatar-inform.ru

At the same time, in 2020, the amount of subsidies for flour mills and bakeries amounted to 206 million rubles. As Nail Zalakov specified, the money was allocated from the republican treasury quarterly. Tatarstan has received federal money to stabilise retail prices for bread for the first time in the last 10 years, and the ministry of agriculture expects that this assistance will not be the last:

“We consider this money as a subsidy for the first quarter. If the budget allows and if the situation in the production of bread worsens, then to prevent price increases, respectively, this issue will be considered further in the second quarter," the deputy minister explained.

But the situation has already begun to get out of control: if previously subsidies to flour and bread producers from the republican budget were allocated from the beginning of the year, then in 2021, they still have not received money from either the federal or regional budgets. As a result, the prices of social types of bread in Kazan stores rocketed, approaching the expensive varieties.

Subsidy of 2 rubles was taken based on the calculation that bread made from rye-wheat flour rose in price by 6%, and from wheat — by 4%, which is enough to offset this amount. Photo: Roman Khasaev

Containing the price by increasing export duties on grain

If in previous years compensation for bakers concerned only a narrow category — social varieties of bread, and it was received by about 50 bread producers, then the federal money will also cover other varieties of bread, provided that the shelf life of the products does not exceed 5 days, the deputy minister added. Therefore, subsidies can be received not only by large bread producers, but also by small bakeries that have never received subsidies before. Compensation will be allocated at the rate of 2 rubles per 1 kg of bread sold, not just produced — the more the bakery sells, the greater the amount of subsidies it will receive from the total amount.

The subsidy of 2 rubles was taken based on the calculation that bread made from rye-wheat flour rose in price by 6%, and from wheat — by 4%, which is enough to offset this amount. According to the calculations of the ministry of agriculture of Russia, as Realnoe Vremya wrote, for small enterprises that bake about 15 tonnes of bread a day, the amount of support will be about 1 million rubles per month of work, for large ones (from 60 tonnes of products per day) — more than 3,6 million rubles.

Another measure, the ministry of agriculture is confident, will help to contain the growth of grain prices and, accordingly, flour and bread prices — a twofold increase in the export duty on wheat from March 1.

A twofold increase in the export duty on wheat from March 1 will also help to contain the growth of grain prices. Photo: Roman Khasaev

“This measure is aimed precisely at stabilising prices within the country, because exports have become more attractive for sales, so the amount of the duty has been increased to stabilise prices and prevent shortages for both the flour milling industry, bakeries, and livestock," Nail Zalakov explained.

When asked where Tatarstan is today in terms of the cost of bread among other regions of the Volga Region, the speaker clarified that “in terms of prices not only for flour, but also for all products, we occupy the leading position from the bottom, that is, we have one of the lowest prices”.

It is unknown when the subsidies will reach the recipients

As Realnoe Vremya already wrote, flour alone has increased in price by almost 40% over the year. “Now flour is most expensive over 15 years of my work” But it's not just about flour and grain. For the last six months, I have been receiving notifications from suppliers every other day about a price increase of 5% to 10%," Bulat Kutdusov, the head of the Kazan Bakery and Confectionery Plant, said earlier.

At the beginning of 2020, the highest grade of flour was held down within 18 rubles per kilogramme, by the end of the year, it reached 25 rubles, said Alexander Marchenko, the director general of the Vasilyevsky bakery. He also drew attention to the rise in the price of other raw materials: sugar increased from 26 to 46 rubles per kilogramme from September 2020, vegetable oil — from 46 to 78 rubles.

Meanwhile, the republican ministry of agriculture began collecting applications from industry representatives for receiving money only from the beginning of March: to date, two flour mills and eight bakeries are on the list of applicants for subsidies. This was announced on 11 March by the deputy minister of agriculture of the Republic of Tatarstan, Nail Zalakov. The submission period finishes at the end of the month, and it is not yet clear when the subsidies will reach their recipients, as the applications have yet to be considered and approved.

Another measure of support, that will help residents of the republic to save money, the ministry of agriculture believes, is food fairs that are held in major cities of Tatarstan (Kazan, Zelenodolsk, Nizhnekamsk and Naberezhnye Chelny) from March 13 to April 24. The products of local farmers and greenhouses — flour, eggs, meat, vegetables — they, according to Nail Zalakov, will be sold at a price below the market.

By Angelina Panchenko