“Daily bread will not be lacking”: Argentina announces subsidies to curb price hike

RIO DE JANEIRO, BRAZIL – The Argentine government announced Monday that it will subsidize flour mills to lower the price of bread and other wheat flour-based products, and said it is considering other measures to curb accelerating food price inflation.

“We are creating a mechanism to ensure that the Argentine people do not lack bread,” said Argentina’s Minister of Productive Development, Matías Kulfas, at a press conference.

Read also: Check out our coverage on Argentina

The minister explained that the sharp increase in international and domestic wheat prices as a result of the Russian invasion of Ukraine has forced the government of Alberto Fernández to take this measure.

Specifically, the government has decided to create a trust fund to stabilize the price of wheat, whose main objective is to subsidize mills so that they can charge similar prices for the flour they sell to the food industry and bakeries as they did last February, when the war had not yet broken out, without affecting the higher price they pay agricultural producers for the grain.

This trust fund is fed with the extraordinary funds from the increase in export duties on soy derivatives (flour, oil and biodiesel), whose rate increased from 31% to 33% last Saturday.

Kulfas said that the industry and bakeries will be obliged to comply with the reference prices set by the government for products made from wheat flour.

SHARP INCREASE

The executive decided to take measures to curb prices after inflation in Argentina rose 4.7% in February, including 7.5% for food.

Kulfas said the government is considering other similar measures, such as a fund to stabilize fresh food.

In addition, he said he met with food sector companies and major supermarkets on Monday after noting that “unexpected increases” and “totally disproportionate increases” were seen last week.

Kulfas said that within 24 hours it will be determined which increases are the responsibility of the food industry and which are the responsibility of the commercial distribution chain, and that the increases will then be restored to the levels in effect on March 10.

The minister warned that the government will not allow unjustified increases.

More: Argentina news in English, every day from The Rio Times.