Vladimir Putin attends a conference of agricultural producers

“In any situation and under any economic circumstances the government will do its best to create appropriate conditions for your productive labour and will be supporting you,” the prime minister said addressing Russian agricultural producers.

Vladimir Putin’s address:

Good afternoon, ladies and gentlemen. Let me first thank you for inviting me to address your representative forum. The Russian Association of Farm Holdings and Agricultural Cooperatives holds its meeting in the first days of spring – a very important and very tense period for rural communities and farmers. Spring planting will soon come into full swing.

I cannot help mentioning that we have had two very difficult years. We have had droughts for two years running – a rare thing. This natural disaster hit many Russian regions and put a strain on all farmers. Naturally, it is difficult to predict what weather conditions and yield we will have this year. But we all know that in the end – if not entirely, then in part – whatever happens will depend upon skill, resilience, the will to work, and the knowledge of how to do so. And our farmers have those qualities. In any situation and under any economic circumstances, the government will do its best to create appropriate conditions for your productive labour and will be there to support you.

As you know, five years ago we began implementing a national project in Russia’s agroindustrial sector and then used this project as the basis for a government programme to support the sector. We have invested over 440 billion roubles from the federal budget within this framework. In total, taking into account regional allocations, 700 billion roubles have been put to support agriculture over the past years. And experience has shown that we have been making the right decisions – these investments are now paying off.

Russian producers are retaking their position on our domestic food market. Despite the hard two-year drought in 2009 and 2010, Russia almost completely met its domestic demand for grain. Russian producers now account for more than 75% of the meat market, and poultry production has doubled over the past five years. If you recall, Russian meat producers accounted for a mere 64% of the domestic market in 2005. And we can certainly be proud of these results. You, the Russian farmers, have made a significant contribution to this success. Thank you very much. This has indeed been a very significant contribution to our collective efforts to ensure Russia’s economic growth, stability, and sustainable development.

The share of small businesses in Russia’s agroindustrial sector is steadily rising. We now have more than 200,000 farm holdings and over 100,000 individual farmers. The production rate in rural small businesses is growing between three and four times faster than the industry average – I noted this when preparing for this meeting. This is a very good sign and is further evidence of the sector’s bright prospects.

Farming enterprises and individual farmers account for almost a half of Russia’s agricultural production and this share is even larger for certain goods. In Russia’s three leading agricultural areas alone – the Krasnodar and Stavropol Territories and the Rostov Region – farmers harvest more than 5 million metric tons of grain. Our farmers produce 55% of Russia’s milk and 80% of its vegetables. This is not a trifling figure – it is a significant market share.

We have every reason to say that farming has established itself in Russia as a powerful economic and social entity, as a bulwark of the country, and as an important source of development for Russia and for reviving its rural communities and their rich traditions.

You are winning the respect of the public. Last year alone, more than 2,000 farmers were elected deputies to municipal government agencies. Your neighbours entrust you with the problems of their villages and districts because they see that you are people of action and that by succeeding in business, you are changing the world around you.

The main thing is that the attitudes and social expectations of people living in rural communities are improving despite many challenges. This means that we have to set new goals for ourselves and to strive for more. The first thing to do is to ensure that government support is equally accessible for everyone, from major agricultural companies to smaller farming enterprises and family farms. That is our general approach. I would like to emphasise that we view supporting small businesses and forming a diverse structure in agriculture as our top economic and social priority.

Government support should be accessible for small businesses in rural communities. We will be monitoring this issue, and I request that the association keep an eye on it, too. We certainly need a feedback mechanism like this, especially given that we are speaking about a wide range of measures and substantial government funds, including those set aside to carry out this year's spring planting.

For example, all agricultural producers will be able to buy fuels and lubricants at discount prices this year. In absolute terms, this will help farmers save up to 10 billion roubles. The measures we’ve taken helped significantly reduce prices on fuels and lubricants, including petroleum. On average, prices dropped by between 3% and 4.5% depending on the region, and some regions even reported a decrease of almost 5%. Winter fuel prices fell by 8% in several regions. However, we will discuss the sector’s problems later, and there are quite a few of them. Mineral fertilisers are a separate issue, and I will touch upon it later as well.

We have set aside an additional 2 billion roubles for the purchase of seeds and fertilisers, and we have also made certain efforts to stabilise the fertiliser market. I know – and I have mentioned it already – that despite our efforts, fertiliser prices keep growing. We are collecting this data. We will later discuss what can be done to address the problem. We have already made pertinent agreements with mineral fertiliser producers, and, incidentally, they are fulfilling their promises as to the price at which they sell. We need to look at what's going on with market intermediaries at the regional level.

The additional financial support provided by the state will only partially offset possible losses caused by the growth in mineral fertiliser prices, and we are aware of that. Unfortunately, these measures are not enough to help farmers purchase more fertiliser. At times like this, we have to admit that state support cannot always work to full effect, and the result is a situation that can satisfy neither you nor the government.

In this regard, I am asking Mr Viktor Zubkov and another deputy, Mr Igor Sechin, who oversees this industry, to analyse the situation in the fertiliser market and work out the necessary measures to curb price growth, as well as ensure that they are implemented to the letter. Clearly, this can only be done in close cooperation with regional and municipal authorities.

I’d also like to remind you that we have allocated five billion roubles to agricultural holdings that have retained large cattle stocks. I would like to underscore that this support also extends to farmers.

I am asking the Ministry of Agriculture to pay special attention to the needs of farmers and small businesses while executing the current state programme for agriculture and preparing the next programme, which will last from 2013 to 2017.

I believe that it is necessary to start providing support to farms immediately. This can be done through subsidising the purchase of young breeding stocks and seed. And we can also help farmers obtain seed and maintain perennial planting. The Ministry of Agriculture has the necessary funds.

I’d also like everyone to attend to the problems of small farms. Moreover, I believe that we should begin by addressing these issues. Such support measures have already been considered, but they applied only to orchards and vineyards of over 50 hectares, so only large farms could benefit from them. Farm size qualifications should be eliminated as soon as possible.

There is no need to tell you how important the current insurance system is for agriculture. This year we have budgeted five billion roubles for crop insurance, which is double what we planned for last year. The government and the State Duma are improving insurance legislation in agriculture. Our main goal is to make insurance affordable and accessible, and, above all, to guarantee farmers insurance coverage in case crops are damaged. And, to put it bluntly, we must protect small farmers from insurance scams and unscrupulous agents.

According to the information the government is receiving, several insurance companies have neglected their responsibilities, refusing to pay damages to those affected by the recent drought under various pretexts. They’re trying to fudge the issue by referring people from one authority to another. That’s what the farmers say. This is the case in the Orenburg Region, and here, in the Tambov Region, too.

I am again asking Mr Zubkov to sort out each such complaint. I will give the same order to the Minister of Finance and the insurance supervision agency. If necessary, we will get the police and prosecutors involved. I think you’ve heard that several insurance companies have had their licenses revoked. Nobody needs insurance businesses that exploit government support without fulfilling their responsibilities. As I said, six companies have had their licenses revoked.

Moving on to our policy regarding the grain market, as you know, we made a decision to distribute all fodder from the intervention fund to the regions that were hit by the drought and applied for support. The price of this grain will be two times lower than the market price. We purchased it at anywhere between 4,500 and 5,000 roubles, whereas it now costs anywhere between 8,000 and 8,500 roubles. We will sell it at the price at which we purchased it, with a small mark-up. We made this decision because, clearly, we had no intention of exploiting fluctuations on the market.

The grain intervention fund was specifically created to assist farmers should difficult conditions arise, although many argued that the grain should be distributed according to market exchange. But I proceeded from the assumption that those who need this grain would not be able to afford it after the drought. That’s the main issue here. There was a risk that traders would purchase the grain at high prices and keep it. This is why I agreed with regional leaders – it was their position – to use the aforementioned method of distribution. It should be transparent and clear, and the farmers that need this grain must be the ones who receive it.

I’d like to return to the issue of getting feedback from farmers. I personally would appreciate it if you helped me to do so. We need to make sure that people receive the grain at the price we set, which is twice lower than the market price. We made this decision with an understanding that the primary mission of the government is to maintain stability in agriculture and ensure that food products are affordable.

Again, I’d like to address regional leaders: you are personally responsible for the distribution of grain, and it is highly important that agricultural producers, primarily cattle farms, receive this money. As I said, the whole distribution process should be absolutely transparent. There's no room for gray areas. This money must not be distributed to farms affiliated with local authorities. I hope that will be the case.

And, of course, measures of financial support should also be undertaken as effectively as possible.

More to be posted soon...

источник новости: http://premier.gov.ru/eng/events/news/14315/