Quasi money for food for the poor: what can be introduced instead of the ration cards and coupons

Quasi money for food for the poor: what can be introduced instead of the ration cards and coupons
Quasi money for food for the poor: what can be introduced instead of the ration cards and coupons
10 March, 16:34EconomyPhoto: Соцсети
As part of the US National Program of Food Assistance to the Poor, all low-income citizens are credited with quasi-money on credit cards, which they can spend only on products made by American manufacturers.

Alexander Chernov, food market expert

Friends - they call and ask if it is necessary to buy stew and will there be lines for groceries? Decided to tell here what I know. I have been involved in institutional monitoring of food prices in Russia for five years, worked for the largest grain company for 10 years, and even wrote a book about Russian grain. So I have a certain understanding of the situation.

It is still premature to talk about the introduction of ration cards

So, let's start with the main thing. The basic product without which hunger will begin is grain and soy.

I will round the numbers heavily for readability. Russia produces from 100 to 140 million tons of legumes. If the weather is good and there is money for sowing, the crop will grow to 140 million. If the weather is unlucky, 100 million tons can grow. And domestic grain consumption revolves around 80 million. That is, the basic food will be. In principle, this is the basic equation that tells us that there is no threat of hunger. However, in history it happened many times that there was grain in the warehouses, but the queues in the stores were incredible.

The population has enough money to provide itself with an average daily dose of calories. In 2020, the minimum wage in Russia made it possible to buy almost 15 kilograms of bread a day. If the purchasing power of money falls 10 times, then we will reach the level - 1914, when the average monthly salary of a worker in Russia was 5-7 rubles per month - and this money could buy only 1.5 kilograms of bread a day. Could a worker live in 1914 with such a salary? Yes, he could, but apparently he didn't want to. It is difficult to assume that inflation in the country will be 1000 percent per annum. And in a year, revenues will fall so much that we will return to the unforgettable - 1993 (with its record inflation of 850 percent).

But where will the state get the money to pay the workers?

GDP (goods that the country produces) of Russia in 1993 - 350 billion dollars, in the default year of 1998 - about 200 billion. In 2021, more than one and a half trillion. It is difficult to assume that despite all the sanctions there will be a 10-fold decrease in GDP. Such a fall would be comparable to the events of 1917 - world war, revolution and civil war, it seems, are not yet foreseen, so it is premature to talk about the introduction of cards.

The American food aid system could protect the poor

However, the fact that the state has money and grain in warehouses does not guarantee the presence of products on the shelf. Even in the late USSR, food and money had to be enough for every inhabitant. But this is theoretical. In practice, then the distribution chains collapsed. The lack of an economic incentive for the seller to sell the goods officially led to the fact that our mothers spent most of their lives in line. It is the preservation of economic incentives for trade that is the main line of defense against hunger. Unfortunately, these incentives are now under attack. The decree on limiting margins on socially important goods is not yet a direct clash, but already the echoes of a cannonade.

Mechanisms to support vulnerable segments of the population, which will definitely be needed, must be urgently implemented. Inflation is called a poverty tax. And assistance to those who have lost their jobs or those who live at the subsistence level must be organized. There are developments in this direction.

One could take and copy the American food aid program for the poor. This is the same program under which the unemployed are credited with quasi-money on a credit card. They cannot buy alcohol or cigarettes, but they can be spent on products made by American manufacturers.

This money, in fact, is provided with products. They do not create additional money overhang and do not heat up inflation. We have discussed the introduction of food cards many times. But the phrase itself echoes the besieged Petersburg and frightens officials. But "bonus points" sound great. The operator could be someone from under the sanctions banks. For example, VTB. Every low-income Russian could get a card with bonus points, say, "Magnit", which could buy bread, sugar and pasta. Officials could regulate this sector as much as they want and leave shops, their margins and trade alone. It is the intervention of officials with their eternal desire to set a fixed price - the main risk of queues.

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