Potato producers are proposing that the Federal Antimonopoly Service establish a minimum price below which retailers will not be able to purchase this product from suppliers.
Usually, when it comes to setting a maximum price, it refers to the maximum retail price of a given product.
In this case, the situation is reversed: potato producers believe that establishing a minimum purchase price below which retailers will not be allowed to purchase this product will help them address low margins and excessive market volatility.
The proposal has been officially submitted by the Potato Union to the Federal Antimonopoly Service. If adopted, all retail chains and stores will be required to operate under the minimum price rule. The only exceptions will be stalls and weekend markets.
The authors of the initiative expect it to increase farmers’ incomes.
According to experts, this area presents significant challenges, as new prices are set in the potato market every year, forcing producers to adapt to the current reality.
Seasonal factors, which can almost double prices within a year, also must be taken into account. This means that producers are unable to even recoup their production costs.
Against this backdrop, potato supplies at predetermined prices should, if not provide producers with excess profits, at least balance the market situation and make their profitability more predictable.
The most contentious issue may be the specific price limit below which retailers will not be able to purchase potatoes from producers.
It is expected that unwashed potatoes will cost at least 30 rubles per kilogram, and washed potatoes at least 60 rubles.
However, for now, we are only dealing with the proposal submitted to the Federal Antimonopoly Service. It’s clear that even if the measure is ultimately adopted, the authority will likely set its own «prices,» while taking into account the interests of all parties as much as possible.
However, some analysts are skeptical about the idea of setting minimum and maximum prices, noting that such interventions always negatively impact market performance.
Currently, retailers already purchase potatoes through long-term contracts specifying a minimum volume of products they must purchase within a year.
At the same time, establishing a minimum price for potatoes will inevitably result in an increase in the final retail price, which could create difficulties for low-income households, experts say.
