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#3 - JRL 7271
July 31, 2003
What About Bread Prices?
Price for bread increases contrary to prime minister's words

According to the Russian newspaper Komsomolskaya Pravda, life got 0.8% more expensive over June, although economists in the government assured they would restrain the inflation at last year's level of 0.5%. A record rise in prices for bread, flour, macaroni and cereals became extremely unexpected for the governmental analysts. A government commission studied the situation on the grain market; then Prime Minister Mikhail Kasyanov said that prices for bread were not increasing and wouldn't increase further.

However, the prices disobeyed the prime minister's words In June, the following products fixed an increase in prices: flour v by 7.5%, white bread v by 5.5% and rye-bread v by 4.9%. Independent analysts think that this increase in prices boosted the inflation by 0.3% which is so disagreeable for the government. This will hardly have an effect upon the economic situation, but will become a strong social issue. Indeed, bread, macaroni and cereals are the basic products in the ration of the Russian population.

Over the past months the price of bread increased in several parts of Russia. It may sound strange but in some places even special cards for veterans and people of limited means have been introduced. Russia's Agriculture Minister Alexey Gordeyev resolutely declared that no bread cards would be introduced in Russia. The increase of prices for bread is seriously lagging behind the rise of prices for other products and the general rise of prices. Alexey Gordeyev says that good or poor harvest doesn't have any effect upon the prices for bread. The price for bread is made up regarding the purchasing capacity of the population.

Two years ago a ton of grain cost 4,000 rubles; last year this cost was 2,000 rubles. However, within this period bread didn't become twice as cheap, on the contrary it even increased in price. The price for bread increases for some different reasons related to commercial organizations. For instance, the extra charge for bread makes up about 50 per cent in Moscow stores. At the same time, the agriculture minister says some regions of Russia follow the right policy and have the extra charge for bread of not more than 5%. Bread doesn't increase in price in these regions.

Alexey Gordeyev says that the value of grain makes up not more than 20% in the price for bread. The rest of the sum comprises the work of bread bakers and dealers. The prices for bread are rather high in the Russian city of Norilsk, while it is the basic product for the population. Do pensioners of the city have enough bread? It was promised some time ago that pensioners would have an opportunity to buy bread at a reduced price. Deputy Chairman of the Department for Social Protection of the population Lyudmila Rebenchuk says that there is no need to have special prices for bread meant for pensioners. Incomes of pensioners in the city of Norilsk are higher than the living wage in the region that makes up 3,319 rubles. The income of Norilsk pensioners comprises the pension, free monthly tickets for public transport (300 rubles), 500-ruble supplement paid by the administration, subsidies for public utility services and other kinds of public assistance. As a rule, the total sum is even higher than 4,000 rubles. In addition, there are charitable programs organized for free nourishment of pensioners and indigent population (the programs are financed by a mining company) and sponsors who give free bread to indigent population. 

Director of the city's urgent public assistance service Valentina Gutsalova says that every day 14 loafs of free bread are appropriated by the Norilsk bread-baking plant and 20 loafs are given by a private enterprise (now the enterprise doesn't provide bread as it is under repair). The amount of 34 loafs was not enough for indigent people in winter. People had to come and stand in a line for free bread from 6 a.m. Valentina Gutsalova says that free bread is a real support for some people; for others standing in a line for free bread means a chance to see people and to talk. In most cases, these people need not bread itself but hearty communication.

There is no reason for panic about bread; it is also proved by the exposition of Russia's only museum of bread situated in St.Petersburg. Its 18,000 exhibits demonstrate that ancient people baked bread, we bake it now and our ancestors will also bake bread. The unusual museum is the world's only exposition of bread; 24,000 people visit the museum every year.

Tatyana Ivanova

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