Cyprus grains commission doomed to closure

The closure of the Cyprus grains commission after 67 years is inevitable because it is unviable, its chairman Kyriacos Kakouris told the House finance committee.

With the exception of the 2010-2011 period, the grains commission has been recording yearly losses since Cyprus joined the European single market, Kakouris said, citing high operation costs and fluctuations in the global economy as reasons for losing a significant share of the market.

“These problems have eroded the commission’s strengths, based on years of expertise and technical know-how, not to mention vast storage spaces,” he told MPs on Monday.

Kakouris stressed that the commission expected a budget deficit of just over €7m for 2021, with revenues estimated at €5m and expenditure at €12.2m. Cash reserves in 2020 reached €6m, which cannot fully cover the deficit, leaving the commission with a negative cash balance of €1m.

In addition, labour costs for 2021 were expected to reach about €6m and would incorporate a voluntary retirement scheme worth €1.5m for permanent employees and €2m for staff on hourly wages.

Last July, three bills aimed at nationalising the grains commission were submitted to parliament.

The first bill terminates the commission’s functions and responsibilities while providing for its dissolution and liquidation.

The second transfers all responsibilities and staff to the ministry of agriculture, which will set up a separate grains authority within the ministry to handle the state’s strategic stock.

Finally, the third regulates stock maintenance for feed materials and grains for human consumption.

The bills are opposed by political parties that support the restructuring of the grains commission in a way that retains its status as a semi-governmental organisation.

Andreas Kafkalias of Akel said this move would not serve the public interest and blamed the government for making moves, such as privatising Limassol port, that have directly or indirectly hurt the grains commission and contributed to its repeated loses.

“We will not stand for the current plans to close the commission,” he said. “It is possible to save it with a restructuring plan, if the government is willing to consider it”.