Sunday, March 26

Sweden Plans to Compensate Farmers for Rising Energy Costs

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(Bloomberg) — Swedish farmers are set to get a one billion-kronor ($106 million) relief package from the government in compensation for a surge in costs for electricity, fuel and fertilizers.

The cabinet plans to add 300 million kronor in direct support for pig and poultry farmers as well as greenhouse operators in an extra budget amendment, Finance Minister Mikael Damberg said at a news conference in Stockholm. An increase of the agricultural and forestry sectors’ tax deduction for diesel is expected to cost a further 700 million kronor.

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The announcement comes as the agricultural industry is grappling with soaring prices on electricity and other commodities, raising concern that Swedish farmers will be unable to compete with imported produce.

“This is a temporary measure in an unusually difficult situation,” Damberg said. “Parts of this sector aren’t able to simply pass on the cost increases as it’s a fiercely competitive market, so if they do, consumers may buy agricultural products from Denmark or other European countries that have more farm subsidies.”

Sweden’s annual inflation rate in December was the highest in 28 years, but unlike in many other parts of the world, outsized price increases have so far been mainly limited to electricity prices.

Read more: The Fertilizer Crisis Is Getting Real for Europe Food Prices

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