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Wednesday, August 10, 2022

Golob’s government clearly does not understand the operation of the free market: Farmers will not sell at the lowest price, but to whoever offers more!

By: Sara Kovač / Nova24tv.si

Golob’s government just does not seem to understand how the market works. If the state had an interest in keeping as much Slovenian wheat as possible in the country, it should not expect farmers to sell wheat at the lowest price. Wheat can be sold at a higher price to foreign buyers without any problems.

When the farmers made a proposal to the state to buy surplus wheat, they certainly did not think that everything would turn out like this. The ruling authority has set itself the task of carrying out the increased purchase for commodity reserves through a public tender, where the lowest price is the main criterion.

They are either acting stupid or did not understand the idea

While the wheat harvest in Pomurje region is coming to an end, and activities are said to be ongoing for the public tender of commodity reserves for the additional purchase of wheat, one thing is becoming clear: Slovenian farmers will not be offering surpluses at the public tender. As the grower Franc Küčan, who is also the vice-president of the Slovenian farmers’ union, explained to RTVS, the Minister of Agriculture, the Minister of the Economy, and the Prime Minister were either acting stupid or did not understand the idea.

“Slovenian farmers will not offer wheat to the country at the lowest price, but some foreign suppliers will do it, while our wheat will look for a good buyer somewhere abroad who will be willing to pay as much as we expected from our millers,” Küčan explained. The price of wheat depends on the quality of the wheat. In principle, it reaches a price of 300 to 370 euros per ton.

According to Küčan, Žito, which is considered the largest buyer of wheat, ignores the purchase of Slovenian wheat. The Croatian-owned buyer wants to buy wheat at the same price as in Croatia, which is not acceptable for Slovenian farmers in light of the large increase in production costs. “Croats have a lower price for wheat and a much lower price for bread and bakery products. We have a higher price for wheat and achieve a higher price for bread and milled products on the market,” he added.

However, Slovenian farmers will have no problems selling surpluses. Küčan said that foreign buyers are already checking the situation. It should be noted that in neighbouring countries – Hungary and Austria – they have higher purchase prices than in Slovenia. So, if there is a choice, it is only logical that farmers will not sell at the lowest price. They would only do it if they were forced to. If the government did not want to buy Slovenian wheat, it could of course do so. But if it has already decided on an increased purchase for commodity reserves through a public tender, the concept is flawed. Why would a man spit in his own bowl after all?

Prime Minister Robert Golob said on Thursday’s 24ur Zvečer programme that he has no problem if farmers decide to sell wheat at a higher purchase price. “With this measure, we want to ensure that we fill our state granaries and enable those farmers who want to sell to the state to have a way out,” he said. However, since Golob announced that there is an interest in doubling the quantity of wheat in commodity reserves, the country will obviously have to look for other providers on the market. Slovenian farmers will not sell wheat at the lowest price, as they have the option of selling it at a higher price. Will the country have to look for grain abroad?

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