Price riddle

Farmers always seem to have problems. This year, it’s the draught, which is estimated to have caused a loss of one hundred billion forints so far. According to irrigation experts, it is irresponsible behaviour in times of fast changing climate to hope that rain will come when plants need it. They also know that farmers are perfectly aware of the appropriate time to sow. Increasingly dry weather is no surprise to farmers either. This is why it is rather strange that the majority of farmers fail to perform the works which allow moisture in the ground to be retained. Dry weather could be a reason for agricultural prices to rise, if the economy was OK. It looks certain that 20-25 percent less grain will be harvested this year than in an average year. However, it is also certain that large stocks of cheap produce were stockpiled last year, which can have a moderating effect on price rises. The supply of fruits and vegetables is also going to be lower. Purchasing of fruits and vegetables usually begins at the normal price, then prices suddenly drop drastically after a few days as a result of imports which are never paid for. Farmers involved in animal husbandry are also effected indirectly by the draught. The supply of fodder is lower which translates to higher price. Farmers producing milk are planning to demonstrate again, this time against the milk policy of the EU. It has become natural for farmers to demonstrate and block major roads whenever the market refuses to pay the price they want for their produce. According to estimates by food processing enterprises, a price rise of 10-15 percent would be needed to remedy the problems of the sector. However, there is no chance that retailers or consumers would accept this.