According to an estimate by DN/Dinheiro Vivo, there are 44 food products that have been selected by the government to integrate the VAT reduction basket to zero, saving the taxpayer €9. The list presented by the Prime Minister was intended to cover all groups in the food chain, as well as the most consumed. The measure costs the State 600 million euros, between loss of tax revenue and reinforcement of production support.
“It is of course a very big effort for a program with a horizon of six months”stressed the prime minister during the signing ceremony of the pact for the stabilization and reduction of food prices between the government, the Portuguese Association of Distribution Companies (APED) and the Confederation of Farmers of Portugal (CAP). home where there is inflation, everyone swears and everyone has his share of reason”.
But the “lion’s share”, admits, is up to the consumer. To which the Prime Minister does not want to create “false illusions”, so he wanted to “speak clearly” to the Portuguese: the price reduction is not immediate, it has yet to be approved in Parliament and proclaimed by the President of the Republic. “What I can guarantee is that the Council of Ministers will meet today by electronic means to approve the bill that will be introduced tomorrow in the Assembly of the Republic,” he stressed. Assembly of the Republic as soon as possible”.
On the part of the distribution, represented by APED, the commitment is that the price adjustment will take place “15 days after the publication of the diploma in Diário da República”.
As for the pact signed yesterday, António Costa classifies it as the result of joint work with producers and retailers, with a view to “finding the best possible solution” for consumers, who are affected by price increases every trip to the supermarket. The fault, says the prime minister, is the rise in inflation, caused by the disruption of supply chains, and “greatly exacerbated” by the effects of the war in Ukraine on world markets.
So and In order to minimize the effects of inflation on the rise in producer costs, particularly in the field of fertilisers, the government has negotiated with the CAP an increase in production aid. At stake is 140 million euros, which will strengthen the resources available for the pig farming, poultry, egg, cattle, small ruminants and vegetable crops sectors. In addition, agreement was reached on an immediate extension of the exceptional aid for agricultural diesel and aid to limit cost increases in fertilizers and fertilisers.
Finally, adjustments will be made for the implementation of the Rural Development Program 2020 in the reprogramming of the Strategic Plan for the Common Agricultural Policy (PEPAC), in September.
Distribution, which commits to “fully reflect the elimination of VAT”, without including this drop in its margins, also assumes the responsibility to “consolidate the partnerships with producers that reflect the support in wholesale prices” .
In addition, in the name of transparency, supermarkets and hypermarkets assume that they will provide “clear and accurate” information on the effective reduction of the price of VAT-free food products, in addition to promising to conduct commercial campaigns to publicize it measuring unit.
For its part, the government is committed to “ensuring communication between production, agro-industry and distribution”, in order to ensure the transparency of all this in the public eye.
To ensure that all these commitments are fulfilled and that they work, a monitoring committee will be established, consisting of public and private entities. In addition to APED and CAP, it will include members of the Competition Authority, ASAE, Tax and Customs Administration and General Directorates for Economic and Consumer Activities. The Ministry of Agriculture’s Office of Planning, Policy and General Administration is also part of the group responsible for “sharing information on the achievement of the objectives” of the signed pact.
While the document is only signed by the president of CAP and the general manager of APED, letters of commitment have been signed by AJAP and CNJAP, both representatives of young farmers, ADIPA, of food product distributors, Centromarca, of product company brands, and by Confagri , from agricultural cooperatives and FIPA, from the agri-food industry.
During the ceremony, Eduardo Oliveira e Sousa, president of CAP, guaranteed that producers “are not responsible for inflation or rising prices. On the contrary, they suffer.” And he gave an example: farmers’ incomes fell by 12% last year, and the average increase in the cost of production factors was 36%. But CAP wants more. “This commitment is not an end in itself. The government must continue and strengthen it by analyzing the policies involving the Ministry of Agriculture that are causing so much damage to the sector, starting with the immediate suspension of the transfer of the regional directorates of Agriculture under the supervision of the CCDR, at least until the conclusion of the 2020 PDR,” he stressed.
Gonçalo Lobo Xavier, director general of APED, recalled that last year’s distribution already suggested a reduction of VAT to zero, as the measure is “useful to fight inflation and improve the lives of the Portuguese”.
The VAT reduction to zero in this now well-known food basket applies for six months. Looking ahead, António Costa recalled that as long as the war in Ukraine continues, the tension on the factors of production will also remain, with the result that they risk increasing. “It is in this forecast that we strengthen production support so that we can deal with these potential risks. But it is therefore essential that everyone, together, is within the scope of PARCA [Plataforma de Acompanhamento das Relações da Cadeia Alimentar] we can monitor the evolution of prices on a weekly basis, so that we can anticipate risks and react quickly when things don’t go the way we want,” he defended.
Source: DN
