Situation in the Food Market: New Signals and Old Problems

Abstract

The current situation in the agrifood market is characterized, on the one hand, by the differentiation of food markets in terms of saturation, and on the other hand, by a reduction in consumer demand due to rising prices. Consumer prices in these segments are much lower than the level of inflation. The processes of import substitution in the food market occur against a background of a decline in consumer demand and an increase in the share of food expenditures in households. Analysis of regional statistics shows a high degree of stratification both in terms of production and consumption of food per capita. An outpacing increase in food prices casts doubt on the correctness of the choice of measures and instruments of protectionism. Proper protectionism, the author believes, can not be realized at the expense of reducing the standard of living of the population, but rather combine market mechanisms with point-wise temporary support for those industries that are characterized by growing profitability and high return on investment. The author considers it necessary to use the tools of the green box (in particular, the program of food cards), the lifting of the embargo on food imports and the introduction of export and import customs duties, depending on the degree of saturation and the formation of domestic industry markets.