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President of Russia Vladimir Putin: Good evening, Mr Gordeyev.

Deputy Prime Minister Alexei Gordeyev: Good evening.

Vladimir Putin: Shall we start with the results of the year?

Alexei Gordeyev: Yes, I would like to brief you.

The agricultural year is nearing completion. I should say this was a good, successful year. Speaking about such indicators as gross yield of all grains, it totalled 120 million tonnes, which is 6 percent more than last year. That includes 75 million tonnes of wheat. It offers us a good export potential and we will be among the world’s leading wheat exporters.

I would like to name the regions that made the greatest contribution: Krasnodar Territory, Rostov Region, Stavropol Territory, and Kursk and Voronezh regions. We had good yields of practically all crops. I can single out just several items: sugar beet – 53 million tonnes, a 25 percent growth and the country’s all-time record. Let me remind you that 20 years ago, 85 percent of sugar in the consumption structure was imported. Today, we are confident sugar exporters.

The potato harvest showed a 9 percent growth, vegetables – 20 percent, and fruit – 15 percent. All that will make it possible to have good stable prices in the consumer market and to speed up import substitution.

I would like to thank you separately with regard to the federal law that was enacted as of October 1 on a 10 percent VAT on fruit. It went through a long discussion but finally fruit will be taxed at the same rate as other foods.

Animal farming. Meat and dairy output has grown by two percent. It is important to stress that our domestic producers have begun to confidently export pork and chicken, and we also see good prospects here.

Vladimir Putin: Mr Gordeyev, was milk marking put off until the middle of next year?

Alexei Gordeyev: Regarding milk, Mr President, we are putting things right, and efficiently at that. Now all the decisions have been adopted and everything that contains natural produce should be on a separate shelf while the products with vegetable fat should be on another shelf for the buyer to see. The Mercury product tracking system began operating to full capacity on November 1. Incidentally, our Belarusian colleagues have also joined it, so we can see the whole chain from the farm to the counter.

Vladimir Putin: Mercury does not see the whole chain.

Alexei Gordeyev: Mr President, I assure you, I can report separately on that, we even uncovered a number of phantom plants that use unidentified raw materials, and we can see it.

Just a few more words about the food processing industry. Production is up 4 percent; there are also some areas here with growth above 10 percent, especially cheese, tinned meat and baby food, which is very important.

We have an indicator regarding exports. You know that we must double exports within six years. We expect $24 billion, which meets the projected figure in the datasheet. And I am sure that we will reach the target as well.

You often ask about state support funds reaching the recipients. I am ready to report on that as well. The state support budget this year will total 318 billion rubles, 20 percent up on last year. Monitoring shows that 99 percent of the funds will reach agricultural producers before the year’s end. I would like to highlight the effective performance of the federal Ministry of Agriculture and regional agro-industrial complex agencies. By the way, not all industries have such a high rate of delivering state support.

We are facing three current challenges. We are aware that we must change the model of insuring harvest loss risks in emergency situations, since unfortunately only 5 percent of crops are now insured. At present, we are working with ministries and Central Bank specialists. We are ready to propose a new model and we will insure around 40–45 percent of areas under crops.

The second challenge is engaging idling agricultural lands. This mainly concerns arable land, of which we have over 30 million hectares. There is also good potential for farming produce. The Prime Minster has instructed the ministries and agencies together with State Duma deputies to draft a targeted programme. We will be ready to report to you on its key points in the first half of next year.

A new state programme launches on January 1. It was your decision made at a meeting in Stavropol Territory. This is a programme of comprehensive development of rural territories. It enjoys great support in the regions today. And it is crucial to note that initiatives from the ground, as they say, are supported here, that is, rural municipalities will present projects, approved by the regions, of comprehensive support for a particular township. I think it is a very important new phase in the agricultural policy.

All these issues will be reviewed at the State Council in December, in line with your decision. The working group is currently drafting a report, and we will present it to you with their proposals.

Vladimir Putin: And who heads the working group?

Alexei Gordeyev: Altai Territory Governor [Viktor Tomenko]. This is quite appropriate, as Altai Territory is an outstanding example of our agriculture in terms of both the population and the production volumes.

Vladimir Putin: Good.

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