Citizens Relief for Expensive Food: Everyone Should Be Able to Afford Healthy Food – Economy

When it comes to food prices, everyone is an expert. Every time you go to the supermarket, you realize that almost everything is getting more expensive in the stores. After Aldi raised prices on hundreds of products, virtually all of its competitors followed suit. The increases are already reflected in the statistics: In March, the Federal Statistical Office reported inflation of 7.3 percent, and food prices rose 6.2 percent compared to the same month last year. However, for some products, the breakouts were significantly higher: sunflower oil cost 30 percent more if you could get it, flour was 17 percent more expensive, fresh vegetables nearly 15 percent, and the price of coffee rose almost nine percent. percent.

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There are many reasons for this: the war in Ukraine is causing shortages in the supply of wheat and oils and is also driving up energy and fertilizer costs. Logistics problems exacerbate the crisis. Already in 2021, container prices had more than quadrupled compared to the time before Corona, and the blockade at the port of Shanghai is now increasing the bottleneck.

Groceries are getting more expensive

One thing is clear: food will be even more expensive. Because customers still benefit from longer-term supply contracts between shopkeepers and growers. But the rapid rise in producer prices shows where things are headed. Virtually all manufacturers are currently negotiating unscheduled negotiations with retail chains over rapid price increases. “We expect food to be around eight percent more expensive this year compared to the previous year,” inflation expert Sascha Möhrle from the Ifo Institute told the Tagesspiegel. Compared to the pre-coronavirus March 2019, German households had to spend an average of 11 percent more on food in March 2022, the scientist calculated.

Poor people in particular suffer from price increases

Price increases hit poor households in particular. “They spend a disproportionately large amount of their income on living and eating,” says Alexander Kriwoluzky, head of the macroeconomics department at the German Institute for Economic Research (DIW). Richer households would have larger reserves, and if they had to spend more money on food, they would simply save less.
“Anyone who earns little, has to deal with a small pension or basic security, is desperate for ever higher prices”, criticizes the president of the VdK social association, Verena Bentele. “It must not be that healthy food is becoming more and more of a luxury,” Bentele told the Tagesspiegel. “Even today, families receiving unemployment benefit II do not usually eat a healthy and balanced diet,” warns Anne Markwardt, head of the food team at the Federal Association of Consumer Centers (VZBV).

[Lesen Sie dazu auch: Wenn der Einkauf zum Luxus wird, T+]

Social associations, unions and consumer defense groups have been demanding relief for households with little budget for months. The previous aid package with an energy subsidy and a family subsidy for all plus a one-time payment for recipients of social benefits is not enough, they say. They demand a quick increase in standard rates for Hartz IV and basic security. And they want a radical movement on VAT. For staple foods, it should be reduced to zero.

Less food for the money: There are many reasons why prices are going up.Photo: dpa/Fabian Sommer

Associations demand: Eliminate VAT

The abolition of VAT on fruits, vegetables and legumes would not only ease the burden on the wallet, but also allow consumers to eat healthily, Markwardt promotes the initiative. Furthermore, this would also be compatible with EU law, because a new directive that came into force recently allows this type of tax exemption for food. “The federal government should follow up and implement this quickly,” Markwardt told the Tagesspiegel.

Until now, staple foods such as eggs, meat, fruit and vegetables have been subject to a VAT rate of seven percent in Germany and 19 percent for processed foods. However, the system has some quirks. A tax of seven percent applies to cow’s milk and 19 percent to oat milk.

Not only Dietmar Bartsch, leader of the Left Party, but also Agriculture Minister Cem Özdemir likes the idea of ​​temporarily suspending VAT. Relieving consumers when buying fruits and vegetables and thereby also promoting healthy eating would be a “proposal with a double dividend, which I prefer”, underlines the green politician. Until now, Özdemir has kept a low profile on the question of how to help citizens with supermarket purchases.

Agriculture Minister Cem Özdemir believes that the VAT reduction is a good thing.Photo: dpa/Moritz Frankenberg

Scientists have doubts.

The tax route sounds easy, but scientists have doubts whether this will ease the burden on people who need help in particular. “I don’t believe in lowering VAT on food,” criticizes DIW expert Alexander Kriwoluzky. “This would mainly alleviate the wealthiest households, which spend more money on food in euros and cents than low-income citizens.” And the Ifo Institute isn’t thrilled either. “We advise against general tax cuts as they are costly to the state and it is questionable whether they will actually reach consumers,” says Möhrle. Instead, he advocates specific measures in favor of low-income households, such as increasing the Hartz IV standard rate.

100 euros for each recipient of the transfer

But there are other options. “A one-time food allowance of €100 for transfer recipients would make sense,” Krivoluzky suggests. DGB board member Stefan Körzell also calls for a financial surcharge for recipients of social transfers as an immediate measure to cushion the sharp rise in energy and food prices. But what is also needed is a real mobility subsidy that replaces the commuter subsidy and is granted regardless of income and the means of transport used. In addition, a VAT reduction should be introduced not only for food, but also for electricity and gas, the trade unionist claims.

There are also other suggestions: So you could increase the standard rates for Hartz IV and on basic security.Photo: imago images/imagebroker

FDP: That’s the wrong way

The FDP rejects it. “An attempt to counter war-related food price increases with more subsidies would be a David versus Goliath battle,” says Gero Hocker, spokesman for agricultural policy for the FDP parliamentary group in the Bundestag. You have to start somewhere else: “We can’t take any land out of food production,” the liberal told the Tagesspiegel. Instead of clearing ecological priority areas for animal feed only, as Özdemir wants, the areas should be cleared entirely. “The more land our farmers can farm, the better it is in terms of affordable prices.”

SPD: Healthy does not mean expensive

The coalition partner SPD is also holding back with new aid commitments. “Through the flat rate of the price of energy, the increase in pensions and economic support for families and recipients of social benefits, the federal government has decided on important and efficient measures that relieve all citizens, but above all everything to those who need it most”, said nutrition. The parliamentary group’s policy spokeswoman, Rita Hagl-Kehl, The Daily Mirror.

“Eating healthy does not immediately mean paying a higher price,” says the former Secretary of State for Justice. The way people eat depends not only on price, but also on the appreciation of food and food in general. “If we don’t buy too much, but shop efficiently and carefully and don’t throw away or waste our food, we can afford a healthy diet.”

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