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Farmers: Against the repeal of preferential price of electricity for agricultural use

03 November 2010 / 13:11:55  GRReporter
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Winter season is approaching and farmers in Greece are concerned how they will cope with the coming changes required by the Memorandum of financial support from the Eurozone countries and the International Monetary Fund. The price leveling of electricity for agricultural and general use planned for the next year completely terrified Greek farmers. “In no case this onerous measure should be allowed to come into force as it itself contributes to the lack of competitiveness concerning the end product,” stated in an open letter to the Minister of Rural Development and Food Kostas Skandalidis the representatives of farmers’ national coordinating body in Greece.

The problem with the preferential price of electricity for agricultural use have troubled Greece  long time. According to the European Commission, the reduction that farmers benefit in their bills for electricity is considered illegal because thus the government subsidizes indirectly the agricultural market, which, as a whole, should be free and independent from state interference. On this occasion, it is expected the country to pay in the near future a penalty in the amount of € 327 million for violating common market regulations in the period 2003-2009. Electricity for agricultural needs today is approximately 40% cheaper than the usual levels of electricity bills. The Ministry of Energy, Environment and Climate Change decided the last month to raise the price of electricity for agricultural use by 5% -7%. According to experts, this is just a drop in the ocean and would not change the position of the European Commission on the matter, while according to farmers this increase will only help in raising the cost of output.

The open letter presents other problems of the sector for which farmers seek the assistance of government representatives. Greek farmers disagree with the impending leveling of the price of heating and transport fuel. Another problem in the Greek sector of agriculture are state compensations that were not allocated transparently in the past seven years. In the period 2004-2007 the Hellenic Agricultural Insurance Organization has paid over € 500 millions as compensations for natural disasters and upheavals that have damaged crops. Lack of clarity and transparency, however, made the European Commission to reassess the cases from this period and this has led to a penalty of € 344 million in the middle of the last month.

The problem for farmers is that after dubious payouts in the past today they can not be compensated for their losses from heavy rain and other hazardous weather phenomena in recent times. Potato producers in northern Greece have lost almost all their production due to the October floods. The amount of the damage to cotton growers after the attacks of the green worm, which has destroyed a large percentage of their production this year, is not accounted yet. Due to lack of funds in the Hellenic Agricultural Insurance Organization cotton growers are now left without resources and they seek assistance from the Ministry of Rural Development and Food.
All the problems of farmers in the country were presented to Minister Kostas Skandalidis, who met with 25 representatives of the farmers’national coordinating body in Greece. The meeting lasted nearly three hours and when it ended the agricultural entrepreneurs left the building of the Ministry in silence not commenting the outcome of the discussions with the Minister and his colleagues. "We have common goals with the farmers in the country - the development of the agricultural sector and the wider supply of Greek production. The doors of the Ministry are open to dialogue, which will be permanent and hopefully fruitful," said Minister Skandalidis in much more friendly manner after the end of the meeting.

Tags: EconomySocietyAgriculture
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