Cyprus Mail

Grains commission fate unclear, as it is no longer viable

AGRICULTURE Minister Nicos Kouyialis said on Friday that despite there being no final decision yet as to whether the Grains Commission will close down, he could not see any other way for it to remain viable as in the last four years it has accumulated losses of €15m.

Speaking to CyBC radio, Kouyialis said that the decision whether the semi-government organisation would close down will be taken by the cabinet in January.

The Grains Commission was established in 1960 as a state-controlled monopoly, in order to ensure the lowest possible prices for grain imports which it delivered to local businesses and maintain the country’s strategic reserves. With accession to the European Union in 2004, however, the grain market was liberalised and the semi-state importer was forced to operate under free-market conditions.

Even though he would not confirm that the organisation would be closed down, Kouyialis said that due to its very high operating cost, its prices are very high and this gives the opportunity to private merchants to sell slightly lower than the Grains Commission.

“We believe that the state must secure the country’s strategic reserves, we must ensure that there are grains in stock for 1.5-2months,” Kouyialis said. He added that it was imperative for grain prices to drop, to benefit both producers and consumers.

The commission’s assets are worth around €30m, Kouyialis said, “which in our opinion are not being utilised rationally”. All these will be taken into consideration by the cabinet before deciding on the fate of the Grains Commission, he said.

“Unfortunately, the commission is not viable, as it suffered a €15m loss these past four years. This cannot go on because it is to the detriment of producers, animal farmers and consumers,” Kouyialis said. “This is the solution, I don’t see how it could become viable”.

He added that any decision taken would not affect the organisation’s staff and their employment rights.

Farmers, however, citing a study of the Grain Commission’s board, called for the overhaul of the organisation, instead of its closure.

The head of the farmers’ association EKA, Panicos Champas, said that the Grains Commission’s board unanimously agreed that the organisation can be spared only thorough radical changes that could see its 60 staff reduced to a mere dozen.

The head of Panagrotikos association, Tasos Yiapanis, too said that if the government agrees to implementing the present board’s proposal, from the €2.5m losses suffered annually, the organisation could even see a profit of €130,000 a year, and grain prices would drop.

In 2014, the Commission’s board chairman, Demetris Theocharous, had warned that the outrageously high wages and overstaffing at the organisation would translate to a forced shut-down within two years if it was not radically reorganised and allowed to operate as a private-law entity.

Theocharous had told the House finance committee that 70 per cent of the commission’s €5m annual budget – or €3.5m – went towards covering its unsustainable payroll. The average annual salary for a permanent staff member is €80,000, and for a term-contractor €34,000. Theocharous had suggested the slashing of the organisation’s budget to €1.5m, to make it viable.

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