There is about 86.000 tones of grain produced in Karabakh, i.e. 19,8 cents. Currently the price for grain is too cheap (70 dram), which doesn’t affect bread price. The price for grain has come down by about 40 % since last year, but bread price hasn’t changed yet. People complain much about this.
Recently the Journalists’ Union of Karabakh organized discussions regarding this issue. Karabakh’s head of NA financial and budget management group Arayik Harutiunyan, Karabakh deputy agriculture minister Vladimir Zakiyan, representatives of taxation authorities, representatives of Stepanakert bread factory, independent economists and journalists were present at the meeting.
During the meeting they noted that bread producers of Karabakh made super-profit because they hadn’t decreased the price for bread after the price of grain had decreased. This kind of increase of bread price took place in November, 2003. Representative of Stepanakert bread factory Karen Nersisyan didn’t deny the opinion regarding super-profit, but noted that their factory didn’t have much profit during the last nine months. He also noted that in January they used to sell one kilo of bread for 255 dram, but then they sold it for 167 dram. For your information: there are more than 25 bread producing companies in Karabakh except this one.
It turns out that the government doesn’t have any leverages to regulate bread price. Different suggestions were made regarding this issue. According to Karen Nersisyan, the government can use taxation leverages to regulate bread price. Taxation authority representative Armine Baghdasaryan didn’t agree with him and said that this leverage was not effective, because all farmers were free of any kind of taxes in Karabakh(except the tax for land property).
They also noted that the government must protect both the producers’ and consumers’ interests by implementing correct policy. Independent economist Rouzanna Mangasaryan noted that the government could regulate bread price by fixing the maximum and minimum prices for grain and bread. But NA member Arayik Harutiunyan didn’t agree with her and said that the government couldn’t make any limitations because in this case they would not be able to sell the product. He suggested a more effective way. He said that they could add a provision in the Code about licensing, according to which the government could regulate the activities of those producers, who get super-profit. Taxation body representative Armine Baghdasaryan noted that the state didn’t have any law regulations, which could give definitions about super-profit and taxes in case of super-profit. According to most of the participants there was a need in such a law regulation. MP Arayik Harutiunyan said that the NA was going to discuss this issue in the near future. He also noted that they also had to make their efforts to support the grain crop increase. The government of Karabakh is not intended to provide loans for grain. According to the agriculture deputy minister, in order to support the grain crop increase they have to make good investments. He noted that this year grain was cultivated on territories of 19 K hectare instead of the 65 K hectare territories of the previous year. “I think we should support farmers. And as bread producers work with super-profit now, we should apply our leverages on them”, – said V.Zakiyan.