“The government, as we have done before, energy and also with subsidies fuelsthat discounts VAT And help farmers directly and instantly transferred to food prices”. 27 December and chief executivePedro Sánchez informs the media that he will leave without VAT (0% rate) staple foods taxed at 4% and pasta And oil, from 10% to 5%. The measure is designed to last for six months or until the annual rate of core inflation (which excludes the most volatile items such as energy and unprocessed food) falls below 5.5%; But three months later, halfway through, he still seems far from reaching his goal.
As a first example, from the data National Institute of Statistics (INE) Food prices increased 15.5 percent in January and 16.7 percent in February. The March figure has not yet been made public, but Consumer price index (CPI) On Thursday, the headline announced that inflation increased by 0.4% month-on-month, although this increase is smaller, it does not herald very good news. Core inflation remains high after falling from 7.6% to 7.5%, far from the 5.5% that would prompt the lockdown.
The final analysis on the evolution of prices prepared by Weighbridge and this week’s presentation at the Food Chain Observatory confirms this negative prediction. During the first two weeks of March, only about thirty foods and drinks sunflower oil and very little cafes And infusions. According to these data, prices continue to rise rapidly. eggs, meat, daily, pastriesHE olive oil, fruit, vegetables, beer And juicessome increases that, on average, drove the increase in prices to 16.1%.
Room main center for economic policy This Thursday, it published an analysis that determined that the prices of the food group affected by the VAT cut actually fell in the week after the cut. enforcement of the measure, but this indicator has since recovered until it practically reaches the level at the end of last year. The economists who prepared this report go further and accuse the Government of indirectly allocating more public money to high-income families with this decision.
“The government started with inadequate measures: It was inappropriate to set a cap on food prices. large-scale taxesAlso, because when the problem is cost, you have to go to costs instead of penalizing the manufacturer or the seller,” he says. Chairman of the Collegi d’Economistes de Catalunya Agri-Food Economics Commission, Francesc Reguant. “Second [la bajada del IVA y el bono para los hogares con rentas bajas] they are more focused on the problem, there is a lack of density with the exclusion of meat and fish, and there is a limit to them,” says the same expert, referring to the direct impact of all this. public coffers.
Instead of, Ministry of Agriculture, Fisheries and Food they believe it’s just a matter of time. “The prediction is that the expected decline in prices will be gradual: how the food value chain workschanges occur in energy prices and production costs over time”, deepens from the same department.
According to him, there is reason to believe that prices will gradually fall: prices have already begun to fall. energy costs, to feed And fertilizers (together they make up 70% of agricultural production costs); or FAO Food Price Indices The Food and Agriculture Organization of the United Nations has been on the decline in recent months.
climate effect
In addition, this ministry has anticipated the inflationary recovery in February. climatic adverse. “The cold at the end of January and the beginning of February, lower production of fruits, vegetables and legumes; In fact, the main reason for the increase in CPI is the increase in fresh products,” said sources from this department, adding that there is more demand from Europe. Holland (the continent’s second largest supplier of fruits and vegetables) has reduced its production in greenhouses due to high weather conditions. cost gas. “This has an impact on prices,” they conclude.
In this sense, Reguant agrees that the scenario is much more complex than it seems, and that it is not just about confronting the problems arising from the events. Pandemic and the war in Ukraine, but also bird flu, climate change Or fight for sustainability. “These are the factors that reduce production and increase costs, the outlook we have is structural, so we need to go further. structural measures“analyses this economist, who suggested, for example, to be more proactive in the face of potential crop shortages, to purchase from neighboring countries, to better develop agricultural production, or to implement strategies that better manage risk.