European food production tab soars

TYRNAVOS, Greece — In the heart of the Greek countryside, tractors have become a symbol of anxiety.

For weeks, they have been parked along highways across the country, their owners threatening to block traffic. Farmers desperately need additional financial assistance to cope with soaring energy prices that are driving up their fuel and fertilizer costs, posing a sudden threat to their livelihoods.

“Take some fertilizer: last year, we paid 500 euros [$570] a ton. Now it’s like buying land. It’s 1,700 to 1,800 euros,” said Dimitris Kakalis, a 25-year-old farmer from central Greece who joined the protests.

Soaring energy prices and its ripple effects, he says, are affecting every aspect of his winery and fishery business – it costs more for gasoline for farm machinery, electricity for power irrigation pumps and weed killer.

“To these [prices]we are going to ruin,” he said.

The sting of high energy prices – which have driven high inflation figures for decades – is being felt across Europe and around the world, adding to the financial strain on governments, businesses and households. Countries are scrambling to cope with expensive utility bills and rising food prices as farmers and supermarkets pass their costs on to customers, many of whom are facing a cost of living crisis.

Turkish police have been ordered to inspect grocery stores to ensure that a new food sales tax cut is implemented, with President Recep Tayyip Erdogan promising ‘tough penalties’ for those who defy measure. For some in agriculture, they have to bear the extra costs: egg farmers in France recently bombarded the windows of the headquarters of a major supermarket chain to demand higher retail prices as energy costs weigh heavily .

In Greece, inflation is at its highest level in 25 years and price increases for many food staples are in double digits: vegetables are up more than 14% from a year ago, olive oil is up over 15% and some types of meat are up over 17%.

At a neighborhood grocery store in Athens’ central Petralona district, shoppers who pick up a few items say they now carry a 20 euro note with them instead of the 10 they needed last year.

“You have to cut some things [out] to be able to manage his monthly groceries and the farmer’s market,” says Antonia Kalantzi, 38-year-old personal trainer. “Things are quite difficult compared to what I remember two years ago. The prices have gone up a lot.”

Farmers feel the same pain as they try to stay afloat. They are lobbying the government to provide additional help on their electric bills, lower fuel sales taxes and other demands.

Kakalis splits his time between his farm and a roadside protest near Tyrnavos, a town 235 miles north of Athens. Protesters have not decided when – or if – they will block traffic through Greece.

Kakalis stands in a circle with other men, warming his hands by burning scrap wood, the discussion focusing on the long-term effects that rising energy prices are likely to have.

“Unfortunately, we cannot rule out the scenario that food and energy prices will be permanently higher, which means that, you know, it’s not just a shock this year, but also in years to come,” said Zsolt Darvas, an economist and senior fellow at Brussels think tank Bruegel.

Like many other countries in the European Union, Greece has rushed to provide subsidies, tax breaks and other temporary measures designed to help households pay their electricity bills. But the prospects for longer-term aid are unclear. The EU has promised to reintroduce tough government budget rules next year after allowing emergency spending during the covid-19 pandemic.

Darvas is optimistic that prices will eventually stabilize this year. But the pain for low-income households is expected to last much longer.

“The poorest 20% of the population spend much, much more on energy and food. They basically spend two-thirds of their budget on household cleaning. [bills] and food,” the economist said.

“The richest 20%, however, spend about a third of that. It is therefore clear that the huge increases in energy and food prices in the European Union mainly affect the poorest people,” said Darvas.

“The gap between the poor and the rest of society is widening, and what we are seeing is shocking,” said Constantine Dimtsas, director of Apostoli, the country’s largest charity affiliated with the Greek Orthodox Church.

He says the charity distributes 7,000 boxes of food a month to needy families in Athens, up from 2,500 in 2019. The daily number of meals distributed, around 20,000, has quadrupled.

Information for this story was provided by Lefteris Pitarakis, Zeynep Bilginsoy, Sylvie Corbet, Kirsten Grieshaber of The Associated Press and AP staff from across Europe.

Mary I. Bruner