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Russia introduces price controls after drought

© RIA Novosti . Sergei Pyatakov / Go to the mediabankRussia introduces price controls after drought
Russia introduces price controls after drought - Sputnik International
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The Russian government has approved food price controls for the first time since the collapse of the Soviet Union, as a month-long drought in the country is sure to send food prices soaring this fall.

The Russian government has approved food price controls for the first time since the collapse of the Soviet Union, as a month-long drought in the country is sure to send food prices soaring this fall.

The pricing regulations allow the government to freeze prices on 20 "socially important food products," including beef, pork, fish, milk, butter and bread, for up to 90 days if in the course of 30 days prices rise by 30%, according to Ogoniok weekly magazine.

The price controls are part of a landmark trade law, which came into force in February.

However, experts say price controls should only be used as a "temporary measure."

"The price regulation of basic food products have been used in other countries; it was introduced in China amid soaring food prices two years ago, for instance," agriculture expert Boris Frumkin said.

"However, in the West such regulations are always viewed as temporary. It is believed that it doesn't work for longer periods because it distorts the real price relations on the market," he said.

Price controls may lead to either poorer food quality or food shortages, Frumkin said, a more obvious backlash being a rise in prices on other products, outside the 20-strong list.

Over 10 million hectares of crops across much of central Russia have been destroyed by drought and wildfires, which were caused by temperatures of up to and over 40 degrees Celsius (104 Fahrenheit).

MOSCOW, August 4 (RIA Novosti) 

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