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Russian bread prices are expected to rise in February when suppliers are expect to pass increased production costs to the consumer, and the government is being urged to consider introducing food coupons to assist low-income consumers. A farmers’ lobby group has made this suggestion because last year saw a bountiful harvest and the state has also curbed the exportation of grains. This means that Russia has enough supplies to feed the population and it’s only fair to introduce coupons to help the poor consumers increase their purchasing power.
15 percent rise in bread prices
Since early 2014, the ruble has fallen by 50%, which has seen Russia’s inflation rising quickly, and it’s expected to reach 15-17$ by March or April of 2015. According to Alexander Korbut, the vice president of the Russian Grain Union, it’s not enough to fight rising food prices without addressing the low incomes that most people try to survive on. He says that it’s time for Russia to return to the concept of giving poor people food coupons because such measures will be cheaper compared to other alternatives. He went on to refer to the Supplemental Nutrition Assistance Program (SNAP), which was a food-purchasing assistance program introduced in the US, and was also a common feature in the defunct Soviet Union when there
were food shortages.
Banning of grain exports
Bread prices are expected to rise by almost 15% if the annual inflation hits 7.5 percent. In 2014, bread prices rose by 7.5 percent, which means that the situation is getting worse and this is the perfect time to introduce food coupons. After the ruble lost value towards the end of 2014, food inflation increased and the government was forced to ban the exportation of grains. The government is now considering banning the exportation of grain exports across the board if the current restrictions fail to rescue the ailing economy as anticipated. Rising fuel prices are not helping matters either.
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