The Cabinet of Ministers intends to cancel restrictions on a rise in prices on food

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Yesterday the Ministry of Economics published the draft of the resolution of the Cabinet about cancellation of obligatory declaring of changes is wholesale - selling prices of foodstuff, entered on October 17, 2007 the resolution #1222 Victor Yanukovych's governments. The enterprises still had to declare the change in price more than for 1% within a month on a flour, sugar, meat, sausage products, eggs, milk, cottage cheese, sour cream, creamy and sunflower oil.

Such scheme had to allow the regional state administrations, to the Kiev and Sevastopol gorgosadministration to stop inflation. "But in connection with price seasonality in the markets of food staples the average monthly gain made sometimes to 10%, and the enterprises of the food industry from - for the continuous change in price were compelled to prepare monthly a package of documents for declaring that significantly increased administrative expenses", - is spoken in conclusions of Ministry of Economics which claims that the subsequent price dynamics showed an inefficiency of these measures. Moreover, of department are sure that preservation of declaring of the prices in the conditions of crisis and absence at the enterprises of current assets will lead to falling of outputs of food and their deficiency in domestic market. According to Goskomstat, in 2007-2008 food rose in price for 24,7-24,5%.

Among other things the Ministry of Economics decided to deprive local authorities of the right to define limit profitability of production of a flour, bread and the bakery products, fixed by the resolution of Cabinet of Ministers #1548 of December 25, 1996. According to Ministry of Economics, the regional state administrations established a profitability limit on mass types of bread - 2-5% (in separate areas - to 15%) which "doesn't provide the profit necessary for expansion of production". Possibility of local authorities to limit profitability of production of other food of Ministry of Economics suggests to keep.

Business approves such initiatives. "It is the correct step. One that we got permissions to revision of the prices not instantly, and through a considerable period, resulted in bankruptcy about 40 dairy plants", - the head of board of National association of milk sellers of Ukraine Vasily Bondarenko speaks. "On declaring of new cost two weeks leave, - the general director of the company "the Agromars Complex Alexey Marchenko agrees. - It leads to that on a number of positions our prices of realization concede to prime cost".

Cancellation of limit profitability for the baking enterprises, according to the honourable president of the Grain Investments company Yury Tryndyuk, shouldn't lead soon to a bread rise in price. "Bakers have a profitability about 10%, - he speaks. - Thus flour prices were now stabilized, and cancellation of limit profitability shouldn't cause a rise in prices for bread". In 2008 bread rose in price for 25,1% at the general rate of inflation in 22,3%.

The government support even in Party of Regions. "The decision of the government of adequately support, - the People's Deputy Anatoly Kinakh, in 2007 heading Ministry of Economics recognizes. - If in the conditions of a world rise in prices for the food we don't allow exclusive arrangements in domestic market, now, in the conditions of decrease in the world prices, it is necessary to maintain competitiveness of domestic producers".

However, producers disperse in estimates, whether there are enough such changes for support of agrarian branch. "In present conditions of decrease in demand additional support - financial subsidies or increase of a threshold of profitability is necessary for us", - Bondarenko notes. Marchenko isn't so exacting: "From - for decrease in purchasing power of citizens we won't be able physically to exceed a present threshold of profitability in 15%, differently our production (meat - an edition) will cease to buy".

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