Turkish gov't to adopt radical measures to reduce food inflation

Deputy Prime Minister Mehmet Şimşek said that foreign trade measures to ensure supply continuity in the domestic market would be taken for unprocessed food products to reduce food inflation. "We have also decided on new regulations on the price setting process in bread. We will introduce alternative marketing channels in fresh fruit and vegetables," Şimşek said.

Şimşek told Anadolu Agency (AA) that keeping inflation low and in single digits is among the priorities of the government, adding that volatility in food prices in Turkey negatively affects inflation outlook and foreseeability.

The consumer price index (CPI) rose 1.31 percent in April, bringing annual inflation to 11.87 from 11.29 percent that month, according to Turkish Statistical Institute (TurkStat) data Wednesday. The latest increase brought the annual inflation rate to its highest since April 2012.

Pointing out that they have been conducting projects to overcome these negative effects and remove flaws in supply and price formation in the food market, Şimşek said that they have established the Food and Agricultural Product Markets Monitoring and Evaluation Committee in this regard and assigned the central bank as the secretary of the committee.

Recalling that the Food Committee convened on Friday after the inflation in April, Şimşek said that short-term measures, which will mainly limit unprocessed food inflation, have been settled and that the stages of the studies on medium and long-term structural issues are being evaluated.

He pointed out that developments in unprocessed food prices continued to have a negative influence on inflation outlook, adding that a number of measures have been taken to limit this effect in the short term and that roles have been distributed.

A new foreign trade strategy to be setIndicating that they will take foreign trade measures to ensure the supply continuity in the domestic market for unprocessed food products, Şimşek stated that the project carried out on this subject will be presented to the committee as soon as possible, highlighting that it will be one of the most critical steps to prevent food price volatility and high inflation.

New regulation for price setting in bread

Explaining that they have agreed on new regulations regarding the price setting process for bread, Şimşek said that they will take important steps in a short period to review competition conditions at certain points in the supply chain in detail and increase audits on illegal storage in storable products. "We are also working on tax incentives for supply increases. We will introduce alternative marketing channels in fresh fruits and vegetables where unhealthy price formations are observed," Şimşek said. "We have decided on some of these, and the implementation process will start immediately. We will settle the other issues at a second meeting to be held this month and put them into practice."

Food to reach consumers without leaving cold chainŞimşek emphasized that they attach great importance to measures that increase agricultural production capacity in the long run and solve structural problems in the sector, while also taking short-term measures too.

Indicating that the Ministry of Food, Agriculture, and Livestock has taken steps to increase the domestic production capacity of imported agricultural products and eliminate import dependency in the medium term, Şimşek noted that various regulations are planned regarding supply chains, licensed warehousing and producer associations.

Stressing that international standards will be brought for the stages that products go through in the supply chain between producers and consumers, Şimşek stated that there will be compulsory rules to be followed in logistics such as packaging, storage and transportation.

"The legislation on this issue is in the last stage, and the application will start as soon as possible. Unprocessed food products will reach the consumer without ever leaving the cold chain following the harvest," Şimşek said.

Underlining that they have prepared a comprehensive incentive package to alleviate commercial costs and accelerate their implementation, Şimşek said the Food Committee has shown special interest in financing agricultural production.

He also noted that extending and encouraging the use of licensed warehouses is on the agenda, adding that thus, the product certification system will evolve and collateral problems of manufacturers will be overcome.

Recalling the decision of the Council of Ministers to include licensed warehousing among priority investment subjects and ensure investments in this area to benefit from 5th zone incentive applications, designed to ensure development of the eastern part of Turkey, Şimşek said: "Detailed projects are being carried out on producer associations and markets. Other structural problems in the sector are also expected to be handled as soon as possible."