Wild boar and power cuts were Greek cotton farmer Mimis Tsakanikas’ biggest worries until a bank shutdown last month left him stranded without cash to pay suppliers, and his customers without money to pay him.
Squeezed on all sides, the 41-year-old farmer began informal bartering to get around the cash crunch. He now pays some of his workers in kind with his clover crop and exchanges equipment with other farmers instead of buying or renting machinery.
Tsakanikas is part of a growing barter economy that some Greeks deplore as a step backward from modernity, but others embrace as a practical means of short-term economic survival.
Photo: Bloomberg
When he rented a field this month, he agreed to pay with part of his clover production.
“It’s a nightmare. I owe many people money now — gas stations and firms that service machinery. I have to go to the bank every single day, and the money I can take out is not enough,” said Tsakanikas, who also grows vegetables and corn on 60 hectares of farmland. “I’ve begun bartering in some forms — it existed in the past, but now it is growing... Times have become really tough, and friends and relatives help each other out.”
A rising number of Greeks in rural areas are swapping goods and services in cashless transactions since the government shut down banks on June 28 for three weeks, restricted cash withdrawals and banned transfers abroad to halt a run on deposits and prevent a collapse of the banks.
That was days before Athens became the first advanced economy to default on an IMF loan, forcing it to request a humiliating third financial bailout.
Capital controls are slowly being eased but will remain for months. Even now, Greeks can only withdraw 420 euros (US$462.43) a week.
Data on the scale of barter is unavailable since much of it is done informally, but activity on online platforms and anecdotal evidence from farmers and businesses show it is surging, even if on a small scale compared with cash deals.
In remote villages and farming areas like the region around the central town of Lamia, the concept of barter is not new. Farmers have long exchanged goods and services. However, the age-old practice has gained new vigor, reviving traditions from ancient Greece, amid the economic crisis.
One of the world’s oldest trading nations, the Greeks, along with the Phoenicians, traded wine, olive oil, wheat and dye across the Aegean and the eastern Mediterranean for centuries.
“Barter has been a part of everyday life for Greeks for a long time,” University of Patras economics professor Haris Lambropoulos said. “In the past, it was mostly on a family and individual level, but now is expanding due to the developments in the banking sector and capital controls. Now it is a more structured and organized phenomenon.”
The growing practice is most visible in rural areas and on islands where farmers are swapping produce with each other, Athens Chamber of Commerce and Industry president Konstantinos Michalos said.
Tradenow, a Web site started three years ago to facilitate barter of everything from food to technology, says its number of users and the volume of transactions have doubled since capital controls came into effect on June 29.
The online platform has concluded about 3,000 transactions worth a total of 800,000 euros.
Among other Internet-based companies that allow barter is Mermix, a Web site that allows farmers to share heavy machinery in return for cash or cashless barter transactions.
Set up three months ago, the platform has about 100 farmers registered on it and expects to break even within two years as business grows, says founder Christos Stamatis, who also heads an agricultural union in Lamia.
In the lush yellow and green fields outside Lamia dotted with cotton, peanut and olive groves, barter is also flourishing on an informal basis outside the online platforms.
Panagiotis Koutras, a cattle herder and farmer, recalls how he sold clover for animal feed worth 2,000 euros to a farmer who did not have cash and paid him in wheat. Another farmer offered his heavy equipment to cover 4,000 euros of a 6,000 euro bill for products Koutras had supplied him.
Kostas Zavlagas, who produces cotton, wheat and clover, recounted how he gave bales of hay and machine parts to another farmer who did not have cash to pay him.
“He is going to pay me back in some sort of product when he is able to, maybe in cheese,” 47-year-old Zavlagas said. “It’s representative of the daily issues that farmers face and why they turn to barter trading to resolve them.”
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