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President of Russia Vladimir Putin: Mr Tkachev, you were only recently appointed to the post of [Agriculture] Minister, but you are not a newcomer to this sector. You know it well, and this is why you were appointed to this position.

My first question: how are you settling into your new job? After all, you are responsible for the entire country now, with all the opportunities and difficulties that we see before us in developing the agriculture sector. Second, what is happening with the support programme for the agriculture sector this year, and with state support, one of the most important issues in this area? My next question concerns the situation with credit resources. You know how important this is. What is the situation in this area? Please, go ahead.

Agriculture Minister Alexander Tkachev: Thank you, Mr President. I am settling in without problem. I have been having many meetings, especially with the department heads, getting to know the ministry, and meeting with people from the business community and various public organisations and associations. I think that I will soon start travelling around the regions a lot more so as to see first-hand the various sites and get to know the issues people face. Overall, everything is going well.

We have accomplished a great deal over the past years in the areas of credit access, state support and structural change. A lot of work has been done in the ministry in general, and in river management too.

Regarding the credit resource situation this year, state support from the budget under the programme adopted at the end of last year provides for around 237 billion rubles. This is an unprecedented level of support for the country’s farmers.

Vladimir Putin: This is taking into account the additional funds allocated – 54 billion rubles?

Alexander Tkachev: Yes. Support for the sector has never been so high over the last decades. As a result, we see growth in the sector now, particularly in the livestock industry, which is very good. The pork sector posted a 4-percent increase, poultry had an 11-percent increase in just five months, and beef production was up by one percent. We are starting to see an increase in milk production too.

The harvest is shaping up to be a good one this year, with the experts predicting at least 100 million tonnes of grain. Let’s hope that the weather is good, given our country’s vast size. Things are a bit behind in the Urals and Siberian federal districts because of the high rainfall they had there, but I think that the situation will come right.

In order to maintain the pace of rural development, we really need to get the business community involved – big business, and small and medium-sized Russian companies. We need to get the rural people into agriculture-related business and put the land to use, develop small-scale production, small farms. Of course, we will need state support for this, and of the level we had last year and this year. We already have plans for 2015, 2016 and 2017, and if we keep state support at the current level, business will certainly be willing to put considerable resources into the sector’s development too and we will be able to achieve much higher figures. This will be very positive for the tax system too, and it will create new jobs in rural districts, help to spread new technology and so forth.

Regarding budget loans, bank loans and other financial instruments, we are a little behind this year compared to the situation last year. As always, Rosselkhozbank and Sberbank are active on this market. Following your instruction, Rosselkhozbank had its capital topped up by another 10 billion rubles. I hope that this will have a positive impact on drawing in new players from the business community, new borrowers, above all. I hope very much that the banks will be just as active in lending to the agriculture sector, lending to farmers, and this will have a positive effect on the level and quality of life in the countryside and help to make our products more competitive.

Vladimir Putin: I know that the ministry has earmarked more for the regions this year than was the case last year. Of the 124.4 billion rubles allocated for supporting livestock production and crops, the ministry has already transferred 88 percent of the annual limit to the regions. This is the money coming through the state support programmes. There is also 78.5 billion rubles for subsidising loans.

But at the same time, one issue that I want to bring to the attention of the regional heads, above all, is that after the money comes to the region, it is very slow in actually getting to the agricultural producers themselves. According to the statistics we had on May 21 this year, the final recipients have actually received only 48.5 billion rubles in total. This is a very low figure.

The worrying thing in this situation is that if the final recipients do not receive this money on time, they might not be able to get their projects underway this year, and this delay could end up costing us dearly.

According to the statistics from May 21, 2015, there are some real outsiders on the list. Murmansk Region, for example, has delivered only 4.12 percent of the funds to the final recipients. The figure is 5.23 percent in Ingushetia, slightly more than 6 percent in Primorye Territory, just over 10 percent in Yakutia, 12 percent in Sakhalin Region, and 12.9 percent in Astrakhan Region. This is absolutely insufficient.

Mr Tkachev, I ask you to make a thorough investigation of this situation and work with your colleagues in the regions I just named and in the other regions too. I hope this situation will be put right, and I hope that this will happen swiftly. If you need further support from my end, tell me right away.

Alexander Tkachev: I will, thank you.

The Agriculture Ministry is aware of this problem, of course. We are monitoring the situation. There are two reasons for this problem. One is objective: the money comes from the federal budget on condition of co-financing from the regional budget. It can happen that the regional budget does not have the required funds at the given moment, and so the federal money stays in the treasury and does not get used. As the regional budgets put together the required funds, the money will come and will reach the agricultural producers directly.

As for the subjective reason – this is just the usual lack of discipline and poorly organised work.

Vladimir Putin: Yes, it’s this above all. I can imagine that some of the regions on the list I just named, Ingushetia, for example, might not have sufficient resources of their own for co-financing, but all this should be taken into account when organising the work together. But some of these regions definitely do not have such problems. Astrakhan Region, Sakhalin, Primorye Territory, Murmansk Region, Yakutia – they do not and cannot have such problems.

Alexander Tkachev: Previously, the co-financing level was half and half. In other words, 50 percent came from the federal budget and 50 percent from the regional budget. Following your decision, the ratio was changed to 70 percent from the federal budget and 30 percent from the regional budget. We are thus helping the regions. For the regions facing the biggest economic difficulties, the ratio is 95 to 5. You are absolutely right – they can surely find this 5 percent.

Vladimir Putin: Work with your colleagues, and the sooner, the better.

Alexander Tkachev: Yes.

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