Authorities are going to bring down prices for tomatoes and cucumbers by reducing import duties

The Ministry of Agriculture will achieve a reduction in import duties on tomatoes and cucumbers if the prices for these vegetables, which are in great demand by Russians, continue to grow. This was agreed upon by the participants of the meeting, which took place in the office of Dmitry Patrushev on February 15. The experts interviewed by MK differed in their views on the initiative of the agrarian authorities: some consider it extremely useful, others see it, first of all, as a threat to domestic producers.

By the beginning of the last month of winter, tomatoes and cucumbers began to rise in price at an accelerated pace. Which, on the one hand, is logical – no one has canceled the seasonality factor for these products. And on the other hand, fears immediately arose of a repetition of last year’s vegetable anomaly, when the rise in price amounted to tens of percent per month.

So far, it has not come to this, but the figures of growth in value are alarming. According to the Ministry of Agriculture, wholesale prices for cucumbers in early February reached 133.8 rubles per kilogram, which is 15.3% more than last year. Tomatoes rose in price to an average of 125.9 rubles (by 11.8%). In just one week from February 7 to 13, cucumbers added 6.2% in value, tomatoes – 4.1%. As for the value of the import duty on these two types of vegetables, it now varies between 10-15% (but not less than €0.08-053 per kilogram).

In the arsenal, the Ministry of Agriculture has at least one more leverage to influence the price situation associated with tomatoes: an increase in the duty-free quota for their import from Turkey. From the beginning of this measure in 2017 to February 12 of this year, Russia received 315.6 thousand tons of tomatoes from there – 90.2% of the established quota. When it is fully developed, it will be possible to consider the issue of its increase, according to the department.

The increase in the price of tomatoes and cucumbers (both Russian and imported) in winter is due to natural factors: in January, very little sun enters the greenhouses, and the ripening process is slower. In turn, this affects the level of production and costs of suppliers. In addition, prices are rising due to the rise in the cost of electricity for greenhouse complexes, gas and logistics.

At the same time, if we talk about cucumbers, self-sufficiency for them reaches 95% (890 thousand tons were produced last year), small volumes come only from China – for the regions of the Far East, as well as from Belarus. With tomatoes, the picture is different: Russia is only 62% self-sufficient with them, the rest are purchased from China, Turkey, Azerbaijan, Georgia, Serbia, North Macedonia. In 2022, supplies dropped sharply compared to 2021, for example, from China – by 1.4 times, from Turkey – by two. This was immediately reflected in retail prices in Russia.

“In a situation where prices within the country are growing too fast, reducing import duties is a completely logical decision,” explains Vasily Uzun, chief researcher at the RANEPA Center for Agricultural Policy. – This measure allows at least for a while to remove the severity of the problem. In the spring, it can be canceled, as more domestic products will enter the market. In winter, our own outdoor vegetables cost us a pretty penny, primarily due to weather conditions. Accordingly, the share of imports, which are cheaper, is growing.”

It is clear, Uzan argues, that the bulk of Russian farmers are interested in maintaining the current import duties. They have invested a lot of money in production, and now they need to sell their goods at all costs, which is sometimes inferior in quality to imported ones, but invariably surpasses in price. However, we should not forget about ordinary consumers: their incomes are falling, life is getting harder, and they have to overpay for vegetables in winter, among other things.

“The decision requires a balanced approach, a deep analysis of the market and the ability of Russian producers to meet its needs in cucumbers, tomatoes and other vegetables,” says Dmitry Valigursky, Doctor of Economics, agrarian specialist. – It is impossible to act out of the blue, according to the principle: since prices are rising, let’s reduce import duties. This step will lead to long-term negative consequences – a drop in demand for domestic products, a reduction in the country’s tax base, the number of jobs, the creation and consolidation of unequal conditions for domestic and foreign producers. In favor of the latter, of course.

In winter, the stocks of domestic vegetables are quickly exhausted, and prices in any case grow within 10%. As Valigursky recalls, this is due to the invariably high dependence on imports: raw materials, packaging lines, packaging equipment – everything has to be purchased abroad, mainly in “friendly” countries. Logistics, services for the delivery of goods are becoming more expensive.

“The price is always determined by the balance of supply and demand,” said Dmitry Leonov, deputy chairman of the board of the Rusprodsoyuz association. – At the moment, upward price dynamics prevails on the market, for a number of reasons: seasonality, growth in electricity tariffs, supply volumes. But literally in a week mass fruiting will begin in greenhouses without artificial light. Supply will increase, prices will start to decline, and there will be no need to adjust import duties.”