No matter what happens I am always surprised at the next communist steps the Greek government takes.
The whole point of the crisis has been that the Greek government is too big and needs to do less. But the Greek government continues to take on more responsibilities despite the fact that it has shown itself completely incompetent to provide the services it is already obligated to.
Why the Greek government thinks it can do something better than private business is beyond me.
So this is the latest story. The Greek government is going to open an online shop selling fresh vegetables.
The motive is that the government believes that the “middlemen” in the distribution channel are gouging prices and make inflated profits.
The creation of the online grocery store, which will be designed by the Development Ministry in cooperation with the Thessaloniki Central Market, aims to sidestep middlemen who are widely accused of driving up prices in order to increase profit margins
So the government’s answer seems to be to try to put these “middlemen” out of business creating more unemployment. As if unemployment in Greece was not high enough already.
Not to mention the fact that government involvement in the fruit and vegetable sector can only lead to less businessmen wanting to get involved and that means less competition.
The fact that the government will not make a profit from its website guarantees that the service it will offer will be less in tune with customer needs and that prices could be taken to unsustainable levels putting into jeopardy investment in the development of agriculture in Greece.
I can imagine the quality of the products and services associated with agriculture will decline with government involvement and I also imagine that the government will use this decline in service quality as yet more “evidence” that more government involvement is needed.
I’ll address the profits issue because it has been brought up.
I would love to know what evidence the newspaper is using to justify repeating the claims of inflated profits. If prices are inflated and no companies are coming in to undercut the existing players then there must be some sort of restriction stopping from new companies stepping in.
I expect there is and rest assured, these restrictions are not put in place by businesses or you can be sure the government would have told the press.
Where is the money coming from? The EU. The EU is giving the Greek government money to put people out of business. If you needed anymore evidence on the communist agenda……
I am sorry but you have no idea what you are talking about.
The one time that the (local) government did something right you call it communism and claim that the government is enlarged.
Here are the facts. For years now, farmers have been complaining that their produce is undersold to the middlemen and subsequently reach the consumer at highly inflated prices. The current example of the humble potato: farmer set a reasonable price at €0.22/kg but the middleman only gives €0.12/kg. Since it’s usually a monopolistic status quo and the farmer cannot keep the produce for too long they have to comply. The potato reaches the supermarket at €0.77/kg! Somewhere in the middle some people made €0.65/kg for just moving the product from A to B. This is not only wrong, it’s madness.
What the various local governments (prefectures) have done is to cooperate. Prefectures with consumers worked with producer ones, in order to bring their producers and cosumers together without the middleman. Result: potatoes at €0.25/kg for the cosumer ( €0.03/kg logical charge for petrol).
This is nothing but a combination of internet selling and a farmer’s market. Are farmer’s markets a communist costruct? Are they a sign of an inflated government? Doesn’t any government regulate and aid farmet markets to operate? Did anyone ever care about middlemen losing money or lost jobs because of farmer’s markets?
I am not even going to bother with the rest of the comments, assumptions and eventual conclusions which are the product of a paranoid mind.
Hi
One thing I didn’t realise is that this was the incentive of local government which is obviously slightly better than central government. If you don’t like what your local government is doing you can move somewhere else, unlike central government actions.
With regards to farmers getting shafted, it is the same situation in Britain http://www.guardian.co.uk/environment/2011/jul/02/british-farmers-supermarket-price-wars
I do not agree with it.
The question you have to ask is why? Given that the situation is so one sided, why don’t farmers sell direct to the public?
To be honest I thought farmers already sell to the public in Greece in street markets?
And what are the prices like in street markets? Are they less than supermarkets?
Hi,
I was slightly wrong on the size of the local government. It is not the prefectures (equvalent of county councils) but the demoi (equivalent of town councils). So this is an action that is more granulated than I presented.
I am sure this farmer-to-shelf price war is happening everywhere but for very different reasons. In the UK there are basically four suppliers of food. It’s in their interest to buy cheap and sell cheap. In Greece somehow they managed to buy cheap and sell with a large profit. Why does it happen? Because everyone is complaining but nobody is boycotting. Freemarket prices are eventually set by the supply and demand principle. Greeks, who were not familiar with the concept before, complained about the price but paid anyway.
As for the producers, they have a few problems. Their produce is slowly wasting and they have to sell it fast, the middlemen are a monopoly or a cartel that don’t want to pay reasonable prices, and globalisation has made it easy to buy from the other side of the world so they can be blackmailed into selling at very low prices.
Finally, indeed farmers’ markets are quite popular in Greece but this new method is quite different in scale. At a local farmer’s market you take enough produce to fill a stall and hope to sell it, possibly dropping the price during the day, effectively wasting your day and ending up with a sore throat from shouting to advertise. This new method means that what you take with you is already pre-sold; it’s not a local affair the farmers can travel quite a bit; and the quantities are of course much largers (last one I heard about was 30,000Kg. And guess what, once the truck is there, all sorted out, sold and paid for in a couple of hours.
This was done with potatoes up to now. And since they were Nevrokopi potatoes, a PDO produce and, for me, the best potato you can buy on the planet, it was quite popular. Furthermore, a family can easily store and consume 20-30Kg of potatoes without it spoiling. They will now start with rice, olive oil and other produce that can be safely stored long-term. This cannot be easily done for things like vegetables, tomatoes, milk products because of the small shelf and fridge life. Meat is a maybe though, some are asking for lamb.
I believe this was a stroke of genious on the part of the local government, the farmers or whoever devised it. The use of the internet to place orders makes it effectively a non-cost affair except for the petrol for the farmer to move the produce to the destination. Sales volumes mean that farmer’s revenue is collected easily and quickly so they can go back to farming. Oh, and one more thing, prices of the same product are falling at the supermarket – although they are still higher than the farmer’s prices. Everybody is happy, except the middlemen.
The rest of Europe should take a hint and copy the method. A global shortage of food is fast approaching and we need to keep our farmers happy and farming. Also, we need to stop the madness of undercutting local farmer’s prices with produce from the other side of the world with its massive carbon footprint.