Potatoes Movement Takes Root as Recession Bites

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Potatoes Movement Spreads to Meat as Recession Bites

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Customers queue to buy cheap sacks of potatoes sold directly by farmers at cost price in the northern Greek town of Thessaloniki on March 2.

By Nektaria Stamouli and Alkman Granitsas

Angry over food prices that keep rising even as Greece stumbles through a fifth straight year of recession, ordinary Greeks have teamed up with local farmers in a new grass-roots consumer movement to bring potatoes and other basic foodstuffs to market by cutting out the middle men.

Since it started in late February, the potato movement — as it is known here — has swept the country, taking root on the internet and spreading by word of mouth. Volunteers ranging from ordinary citizens to local mayors and even university authorities have all pitched in to help organize dozens of impromptu potatoes markets in cities across Greece, while the movement is now spreading to products such as olive oil, meat and other produce.

The buzz is palpable: evoking comments from Greek political leaders, government ministers and media pundits. The organizers have been featured in countless newspaper and television interviews, and the movement has excited the blogosphere. The founders of the movement “should be awarded the title: Knights of the Cheap Potatoes,” writes one enthusiastic blogger, who sees them as crusaders against the “shameless profiteering” that characterizes the market.

At first blush, the movement looks like a response to Greece’s growing social crisis as Greeks grapple with the effects of a two-year long austerity program that has slashed wages and pensions across the board and driven many to the brink of poverty. One example, a university in the northern Greek city of Thessaloniki, has begun renting out garden plots to cash-strapped local residents so they can grow their own fruits and vegetables. And in the past year, there have been other grass-roots campaigns calling on citizens to stop paying taxes or road tolls in an open revolt against austerity measures.

Since 2008, Greece’s economy has been in recession with unemployment now at record highs while wages have fallen sharply. But on a 12-month running average, Greek consumer inflation is currently above 3% — more than the euro-zone average. Many economists say such structural problems have hamstrung the country’s adjustment program and slowed Greece’s attempts to become more competitive.

So the potato movement has emerged at an opportune time.

But the phenomenon mainly underscores many of the rigidities and market-distorting practices that still exist inside Greece’s overregulated economy, and highlights one of many structural problems hobbling the adjustment program mandated by the European Union and International Monetary Fund. In effect, the movement is a collective call to action by ordinary Greeks to bypass the country’s rigged market in the absence of structural reform by the state.

“The so-called potato movement showed some real market issues: the large price differential between farmer and consumer, distortions in the functioning of the market and changes in consumer behavior due to the economic pressures on Greek households,” said Deputy Agriculture Minister Giannis Drivelegkas.

The roots of the movement date back to late last year, when farmers in the northern Greek district of Nevrokopi refused to sell their spuds to wholesalers who were paying them 10 euro cents for a kilogram of potatoes at the same time that retailers were charging consumers between 55 and 80 cents — a markup of more than 450%.

It wasn’t the first time that Greek farmers had quarreled with wholesalers over the huge gap between the prices they receive and the prices on supermarket shelves. Almost every year Greece’s farm producers stage protests and block roads as an expression of their discontent. But faced with some 50,000 metric tons of unsold potatoes, the Nevrokopi farmers decided to appeal directly to consumers instead.

“We finally put an end to this pitiful practice where the only thing we wound up doing was to go on to the streets and demonstrate,” said Christos Gontias, a leading farmer in the movement. “We didn’t have a communications strategy. Now we understand we have to do something on our own.”

With the help of local volunteers — and the internet — the farmers began to organize direct consumer markets in various cities around northern Greece, offering their potatoes at 25 euro cents per kilo. The sales process is simple and circumvents established vendors of fruits and vegetables.

Usually, a local municipality will organize a potato market at the weekend, spread the word through the internet and take orders from citizens through an online form, which it then sends directly to the farmers. The actual sale takes place when the farmers roll up later in the week with their truckloads of potatoes.

“I now pay €10 less for a 20-kilogram sack of potatoes,” said Eleni Grigoropoulou, who was queueing one recent Sunday morning in Athens. “If this is the only way to make middle-men and sellers realize that prices cannot remain at the same high levels they were a few years ago as our salaries shrink, we are willing to shop this way.”

Since the movement started, the potato markets have spread to other cities in central Greece and even to the upper-class northern suburbs of Athens. Farmers on Crete are planning to follow suit and so too are producers of rice, flour and honey.

Meat is also being considered — especially ahead of April’s Easter holiday, when Greeks traditionally tend to consume a lot of meat. But there is a challenge here: meat rots much faster than potatoes, so any ad-hoc retail market would have to find a way to keep the meat fresh, no small challenge in Greece’s Mediterranean climate.

“In the middle of the crisis, a part of the Greek society is trying to take initiatives without political guidance,” said Alexandros-Andreas Kyrtsis, professor of sociology at the University of Athens. “It helps both sides [farmers and consumers]; it improves farmers’ social prestige and creates a feeling of solidarity in this hopeless climate.”

Another reason for the movement’s popularity is that many Greeks — of all social classes — have complained for years about exorbitantly high prices for basic foodstuffs, with many items in Greece, such as flour or coffee, sold at prices well above the European average.

Wholesalers and retailers are widely seen as engaging in anti-competitive practices, and in the past several years there have been a number of prosecutions of Greek supermarket chains and local dairy companies for price-fixing — usually without a clear outcome.

Bloomberg News
A customer sits with sacks of potatoes purchased from the back of a farmer’s truck in the Peristeri suburb of Athens, Greece, on March 22

Beyond the big supermarket chains, Greece boasts hundreds of weekly street markets across the country that also sell fruits, vegetables and, of course, potatoes. But here too, the country’s web of regulations and restrictive guild rules stifle competition and keep prices artificially high.

For example, street vendors are only allowed to sell a fixed amount of produce in any given year and the number of licenses is restricted. Also, farmers need special permits to sell their wares at those markets. There are also hints of oligopolistic practices, mirroring complaints made against the supermarkets.

“Farmers are finally waking up from their slumber,” said Alexandra Valopetropoulou, a former advertising executive who now runs a small home-delivery business selling organic fruits and vegetables around Athens. “The obstacles facing growers are both traumatic and challenging. For example, farmers have been exiled from the street markets.”

What’s less clear is whether the new potato movement will last. “The start was made, now the important thing is the durability,” said Mr. Gontias.

Mr. Kyrtsis at the University of Athens has his doubts. “Despite its romantic dimension, the movement cannot last long,” he said. “Greece doesn’t operate in a closed economy, it has certain rules and with this movement, institutions, processes and jobs are bypassed. However, the movement could press for more immediate reforms.”

Still, this isn’t the first time that the lowly spud has changed the direction of Greek public policy. Potatoes were first cultivated in Greece during the 1830?s at the instigation of Greece’s first governor, Ioannis Kapodistrias, who brought the then unknown tuber from France.

Legend has it that his first attempt to distribute potatoes for free was met by indifference by Greek farmers. So, in order to stoke the interest of Greek farmers in the new root, Kapodistrias placed the spud stockpile under armed guard.

In the end, potatoes caught on after local farmers, reckoning they must be something precious, started stealing them.

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