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Minister Davitashvili: “The Government of Georgia-adopted decision to subsidize topnotch wheat grain, guaranteeing that prices on bread will not increase”
As a follow-up briefing to a commenced session of the Inter-Agency Coordination Council under the Government of Georgia (GoG), Mr Levan Davitashvili, Minister of Environmental Protection and Agriculture of Georgia (MEPA) stated that “the GoG-adopted decision to subsidize topnotch wheat grain will safeguard Georgia’s dwellers from an increased price on bread”. The program will be launched in the week of November 30 and will run for four months, leading up to March 31, 2021.“Throughout the last couple of days, bread producers’ as well as the Georgian Wheat and Bread Producers Association’s statements have been aired. There have been talks on circumstances, which have boosted prices on wheat, arguing projected increase on bread prices. The two Associations have delivered their statements today, reiterating having a dialogue with the Government and scrutinizing of a subsidizing scheme; hereby, we would like to approve the latter statement. We have reiterated the bread being a highly strategic product. Meanwhile, we fully acknowledge social hardships of our citizens caused by economic turmoil of the pandemic, both, in Georgia as well as globally. We ensure consistent liaison and meetings with producers. The GoG has adopted a decision on subsidizing topnotch wheat grain. It comes with my full responsibility that prices on bread will not increase. The programme will be in forth till March 31, commencing the next four months. We will observe general situation at an international market, due to grain being of highly important subject of trade, thus numerous factors make an impact on the latter’s price. We will proceed forward with our decisions upon observing global prices on wheat grain and determine our actions post-March 31. We have carefully assessed the period of an upcoming 3-4 months and the State has asserted how vital the respective intervention has been” – Minister Davitashvili stated.
The Minister also elaborated on the role of an incumbent and existing grain storage in the country, which has amounted to more than 100, 000 tonnes and has complementing balancing efforts throughout autumn. Nevertheless, prices on grain have boosted throughout the Black Sea region since September; an increased worth has constituted to 200 – 270 USD, thus causing rising prices on both - wheat and wheat-derived products.
“Against all odds, we have intensified our efforts for joining forces with producers and ensure sufficient storage and refrain from undisrupted supply of a highly strategic product. Our efforts will translate into subsidizing policy, which will be acceptable for all the parties. We had been on constant liaison with large mills and grain wheat producers, as well as bread bakeries, due to these forming strong chain of supply and production, thus, the two parties shall seek for mutual consent on terms, which will guarantee that population will not witness hardships” – Minister stated.
A fixed price of 53 GEL per topnotch quality 50-kg pack of grain wheat has been determined, thus the respective term shall be adhered to by the mills.
“Such scenario will entail a maximum amount of 10 GEL of state subsidizing per 50-kg pack, which will be followed with diverse price offers by the mills. Nevertheless, we anticipate competitive prices, thus ensuring that state resources are effectively utilized; amid having less expenditure of state funds, while guaranteeing the same tangible result – neither wheat grain nor bread prices increased. Our budgetary estimates project 2 – 2,5 million GEL per month, thus amounting to a total budget of 10 million GEL within the respective program” – Minister Davitashvili stated