Page 56 - bne magazine September 2021_20210901

56 I Eastern Europe bne September 2021
($475), but far from all of that could be spent on food as 15% goes on taxes and mandatory payments like utilities. That leaves RUB29,800 of disposable income, or 84.5 portions of borscht. On top of that another one and half portions of borscht is eaten up by housing and communal services costs to leave 83 portions after all the obligatory outgoings.
But this is on average. Social stratifica- tion in Russia is large, and 13% of the population only had enough money for food, and another 50% only for food and clothing, Rosstat reports. Money enough to prepare borscht (with no meat) 83 times a month is enough to keep a family of four fed, but leave very little over for anything else.
For families living on the border of poverty Vedomosti reports they have an income of RUB13,100 left over after taxes, utilities and housing costs, or a mere 48 portions of borscht. By comparison the average disposable income of the richest 10% was RUB96,000 – seven times more than the bottom 10% and enough for 302 portions of borscht.
The poorest Russians actually spend an average of RUB4,900 on food per person per month, or RUB160 ($2.16) per day, according to Rosstat. This is 20% less than the food portion of the subsistence minimum, which recommends eating 200 grams of meat per day, and half of what is needed for the borsch set, which doesn't include meat.
“In 2019, a tenth of Russians could not afford meat at least once every two days,” says Vasily Anikin, a leading researcher at the Federal Research Soci- ological Center of the Russian Academy of Sciences, as cited by Vedomosti.
Regional differences
The borscht index also reveals big differences between regions. The gap between richest and poorest regions according to the index is 4.6 times in 2021.
The regions where incomes allow residents to cook the most borscht
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a month were in the oil and gas-rich regions (Yamalo-Nenets and Nenets Autonomous Okrug – 230 and 204 dishes, respectively), as well as Moscow (179).
The poorest ten regions include Tuva on the Mongolian border (50), Ingushetia in the Caucuses (56), Kalmykia in the centre (59) but also other national republics, such as Kurgan Oblast (64) and Crimea (65), where salaries are very low.
The dynamic changes in the index this year also varies by region. In 64 regions of Russia, the indicator fell in the first half of 2021 compared to the first half of 2020 by an average of 4%. The most exaggerated changes were in those regions where the incomes of citizens were simultaneously declining while prices were rising, which happened in Sevastopol in the Crimea.
A borscht set in Moscow in July was RUB307, which is 16% less than the average RUB368 calculated by Rosstat on August 2.
The borscht set is also distorted by buying not the cheapest options but going for quality products. Rosstat explains discrepancies between its published numbers and the prices in the market that when calculating
carrots in the capital had doubled from January and the essential red beets that gives borscht its colour cost 3.5 times more.
The vegetable harvest has been badly affected by this year’s extreme weather conditions. “Usually the harvest comes from July, and the peak is in September. But this year is a protracted spring, late sowing, so everything has shifted by about a month,” says Sergei Korolev, ex-chairman of the public council at
the Russian Ministry of Agriculture, as cited by Vedomosti. “When seasonal shortages arise, farmers want to
get more margins at each stage and consistently inflate prices.”
Delivery of goods can be more expen- sive than their cost at the place of production, for example, if you bring vegetables from the south of Russia to Siberia. In this case, the goods must not only be stored, but losses must be anticipated which can double the cost of vegetables in transit.
"Trading networks, in turn, also put a high mark-up on the fruit and vegetable group – 30% [to the producer's price], or even 50%," Korolev said.
Meat prices also get marked up, espe- cially by retail chains, but by a lesser
“In 2019, a tenth of Russians could not afford meat at least once every two days”
consumer prices, it takes the most popular goods, and they are mainly from the middle and below average price category.
Buying from one of the many open air markets or from the burgeoning number of supermarkets also affects the prices. The cost of vegetables on the shelves in stores is two to four times higher than that of producers, according to Rosstat data. This excess is usually stable; nevertheless, by June, prices jumped and the gap became three to five times higher. By June, potatoes, cabbage and
extent. “The additional margin of retail chains is 10%, and for premium meat – 20%,” says the founder of the Veles meat processing plant, and now a State Duma deputy, Alexander Iltyakov.
The average trade mark-up for veg- etables is on average 16.5%, the press service of the Ministry of Industry and Trade reported.
To keep prices down, the government decided to negotiate with retail chains to limit premiums and actively subsidise producers and expand acreage.