COMMENTARY
When Adam Smith extolled the virtues of a market economy and its 'invisible hand', markets were characterized by a very large number of sellers and a very large number of buyers. In recent times this type of market has disappeared in modern societies and modern economies and been replaced by product flows that are very much in control of very large organizations that only respond to market forces in a most clumsy manner. Any economic system where there is a concentration of economic power cannot be considered to be a meaningful 'market economy'

I am happy to see this article because it shows what could happen if an old fashiopned efficient market was reestablished with many small suppliers and many small buyers.

I think it is fair to say that nearly every supply chain from farmgate to consumer has been hijacked by economic intermediaties who extract 'rent' at every stage of the post harvest processing and delivery to consumer. In the process there is profit, but at the same time value destruction and distortion of the market. Whatever happened to sasons? Prices should vasry according to season, and according to the supply and demand for items. Huge food and agribusiness concerns set prices depending on costs and profits that have little to do with the real economy of supply and demand!
Peter Burgess

Greece's 'potato movement' grows in power A growing group of grassroots activists are cutting out agricultural middlemen and connecting farmers and shoppers.

IMAGE Recession-hit Greeks can now buy rice for a euro per kilo directly from producers [Anna Psaroudaki/Al Jazeera]

Athens, Greece - When an economy shrinks, prices are meant to go down in response to falling demand. This has not happened in Greece - at least not yet. While the Greek economy shrank by an average of five per cent a year between 2009 and 2011, consumer prices rose by an average 3.7 per cent a year. The combination of falling revenues and rising prices has led to an explosive political mix.

It is not politicians but grassroots activism that has come to address this issue. In April, the Hellenic Statistical Authority (ELSTAT) reported a 24.6 per cent drop in potato prices from March 2011 - the largest ever one-year drop in any commodity. The reason for this historic deflation was what has come to be known as the potato movement - and it is having an empowering effect on Greeks, not only as consumers, but also as citizens and voters.

The seminal event of the movement was a free distribution of more than ten tons of spuds in the centre of Greece's northern metropolis, Thessaloniki, on February 5. It was organised by a group of farmers from the village of Nevrokopi, Greece's potato-growing capital.

The farmers were protesting against imports of Egyptian potatoes - while they had barns full of the Greek product - after a meeting between the agriculture minister and potato importers days earlier failed to yield any concessions.

A growing movement

The first to invite the farmers of Nevrokopi to sell their potatoes at wholesale prices was the Pieria Prefecture Voluntary Action Group, based in the northern Greek town of Katerini, on the foothills of Mount Olympus.

Keratsini Mayor Tzanis: 'We did not come to hold sway over the city, but to serve the city' [Anna Psaroudaki/Al Jazeera] The Pieria group was formed in late 2007, after a series of wildfires devastated Greece's forests, to provide the local fire service with an early warning system. It was already busy creating a free supermarket for the destitute when it heard of the potato handout in Thessaloniki. On February 19, it organised a sale of potatoes to the Katerini public at 25 cents a kilo - one-third of market price.

Days later, the movement spread to Thessaloniki's Aristotelian University. Christos Kamenidis, a professor of agricultural marketing, organised a potato sale on campus with student volunteers. 'I was worried that we would [only] sell three or four tonnes. We sold 50 tons on the first day,' Kamenidis said.

'People just fell upon the produce. The producers couldn't cope with demand.'

The entire greater Thessaloniki area now holds regular sales of cheap produce, and the movement has spread south to the capital, Athens, and beyond.

The potato movement is changing the food market. 'Competition has increased,' Kamenidis told Al Jazeera. 'The stores that once sold for 75 cents are selling for 45 cents, and I heard prices as low as 19 cents.' And the effect has not been limited to potatoes. Other basic durable goods such as olive oil, flour, rice, and honey have also gone on sale directly from producers, undercutting market prices by half.

Broadening the field

The potato movement is giving renewed impetus to two institutions that could have been expected to channel market economics in hard times but didn't. The first, farmers' cooperatives, were set up in the 1980s to give producers the clout to compete with wholesalers. 'Cooperatives have the ability to sweep wholesalers aside, but they don't sell any cheaper,' Kamenidis said. 'They mark up produce even more.'

Farmers' markets, set up throughout Greece to help producers compete with retailers, also reportedly fall prey to the same greed. 'Producers have succumbed to the logic of the market. They are trying to gouge consumers in the same way as middlemen,' Ilias Tsolakidis, who created the Pieria group in Katerini, told Al Jazeera.

The potato movement has not gone unchallenged. 'Now there is a war breaking out,' Tsolakidis said. 'The potato sorting and packaging centres are raising their prices to producers.' Controlled by wholesalers, the centres are using their leverage to inflate producers' overheads.

'We receive about 5,500 orders for each sale of produce, representing about 45,000 people, or 55 per cent of the population of our town … Political gatherings are lucky if they get 50 people.' - Ilias Tsolakidis, Pieria group co-founder

'Many of my fellow villagers did not believe in the movement. They thought the price was too low,' she said. 'Some made fun of us.'

Cash in hand

Arnaoutoglou was vindicated. She and the growers she coordinates sold their potatoes at the cost price of 25 cents a kilo, and have cash in hand to sow next year's crop. Those who held out for a higher price are stuck with potatoes they may have to sell over the border to Bulgarian middlemen for 10 cents a kilo, or with cheques and IOUs from Greek middlemen that haven't been honoured in two years. She now plans to sell abroad via a website.

Perhaps the ability to foster a can-do spirit and generalise it is the potato movement's most lasting - and subtle - contribution to Greek culture. It has already begun to transform civic attitudes in Katerini. 'It takes me an hour to walk a kilometre from my house to the centre of town, because people stop me and the other volunteers and beg us to take over the local government,' Tsolakidis told Al Jazeera. 'This happens every day. They see this movement as something very hopeful.'

The group's organisational power and economic potential give it a possibly subversive political appeal. 'We can mobilise more people than anyone else,' Tsolakidis told Al Jazeera. 'We receive about 5,500 orders for each sale of produce, representing about 45,000 people, or 55 per cent of the population of our town … Political gatherings are lucky if they get 50 people.'

Potato power

Local politicians now queue to sign up for firewatch duty, said Tsolakidis. 'This is how we see our role as citizens. With my behaviour I determine the behaviour of those in power. We cannot organise things like the potato movement and not have an opinion about local or national politics.'

Even in places where the potato movement has nestled directly in the folds of political power, that power is tinged with anti-authoritarianism and an emphasis on individual empowerment.

IMAGE Rice grower Yiorgos said traders 'don't pay as much as they should and often pay in six-month cheques' [Anna Psaroudaki/Al Jazeera]

'We are completely unsupported by any political party,' said Loukas Tzanis, a former pharmacist who in 2011 took the reins of Keratsini-Drapetsona, Athens' largest working class municipality. 'People need independent, authentic expression in local government. We did not come to hold sway over the city, but to serve the city.'

Tzanis and his mayoral team have plunged into a series of social measures. They have secured European Union funds to assist poor children and battered women, and have already organised six distributions of rice, flour, potatoes and oil on the town's main square.

Tzanis has also defied powers greater than himself to raise his voters' quality of life. He recently bulldozed his way to take control of a municipal waterfront leased to the Peiraieus Port Authority - a wealthy public company that runs the country's largest container terminals in collaboration with China's COSCO - and is organising children's activities there.

He said he is also in talks with Formula One to recast his municipality's coastal highway, already highly developed for truck traffic, as a racetrack abutted by parks. His goal is nothing less than a recreation economy to tame a 50 per cent unemployment rate.

Both in Katerini and in Keratsini-Drapetsona, the potato movement is championed by those who have understood the sea change in Greek values: independence from party and special interests, and a dedication to public service.

These 'new values' may today be limited to grassroots activism and local government, but judging by the ferocity with which Greek party hierarchies are being shaken, it may only be a matter of time before they reach the top.

Source: Al Jazeera