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Meeting on agriculture development

June 18, 2014

Vladimir Putin chaired a meeting on agriculture development in Russia. The meeting was held at the Stavropol State Agrarian University.

Before the start of the meeting, the President toured the agricultural equipment used for teaching at the university and spoke with students.

President of Russia Vladimir Putin: Good afternoon, colleagues.

The Governor and I have already visited one of the businesses here – the Rossiya Agricultural Cooperative. Mr Pyanov, the head of the Rossiya Agricultural Cooperative, will also tell us today about how they are using the newest technologies.

Today, we will discuss our current efforts. The growing season is very much underway; in some places, harvesting has begun and we will see how it is going, what problems are occurring at this time, and what needs to be done in order to resolve them effectively and on time.

I want to note immediately that overall, the sector is developing confidently. According to last year’s results, the volume of agricultural production grew by 6.2 percent, although as we all know, there was a drop of 4.8 percent the previous year. So in comparison to 2011, the growth for 2013 is 1.4 percent. This is good too. But we must be realistic and understand our current position and the results we are achieving objectively.

This year, we are also seeing a positive trend: we have already had a 1.3 percent growth in January through April. This is occurring on a truly new, increased foundation; it is a good indicator. Expert assessments predict a good harvest: we are planning to harvest around 97 million tonnes of grain. This will be partially achieved due to an increase in cultivated areas. Overall, things were good last year as well: the harvest was 92.4 million tonnes. But if the forecasts for this year come to fruition – granted, we noted today that agricultural producers like to talk about results only after the harvest is in the barn. So it’s good to have the forecasts, but the actual result is something entirely different. Nevertheless, we will hope for the best.

“Our entire state policy to support agricultural producers should be calibrated and aimed to achieve long-term structural plans. Each ruble from the budget must work toward development.”

At the same time, we still have certain problems in the sector: farms are heavily in debt, their main assets, including machinery, require replacement and renewal, while the overall production profitability is, unfortunately, still at a low level. According to data from the Agriculture Ministry, as of May 1 of this year, agricultural producer indebtedness to Russian banks grew by 5 percent compared to the same period last year, and reached the high number of 2 trillion rubles. Meanwhile, overdue debts increased even more, by 20 percent.

Today, we will have a discussion with participation of ministries, regions and business representatives about the current state of the sector, as I already mentioned. Most importantly, I would like us to come up with ways to reach substantive resolutions to the problems faced by the sector. I would like to hear suggestions from you on measures that will allow us to ensure high-quality, sustainable growth in Russian agriculture. First and foremost, we should be talking about increasing state support for the agricultural sector and how to provide this assistance in a more efficient and effective way that is more accessible to agricultural producers. As you know, the federal budget alone allocates about 200 billion rubles annually to support the industry. These resources should be providing maximum results. I want to once again point out the need for high fiscal discipline and timely delivery of funds to specific producers. We have certain problems with this and we will also discuss them today.

Our entire state policy to support agricultural producers should be calibrated and aimed to achieve long-term structural plans. Priorities in this type of support should correspond to real needs in the industry. Each ruble from the budget must work toward development, promoting strong, successful companies and promising directions, including pertaining to import substitution. This is exactly the case where import substitution is needed. Of course, this cannot be done for the entire range of agricultural products – we are not going to grow bananas here – but we have many crops that can certainly be very competitive.

“The Russian market, the market of the newly-formed Eurasian Economic Union is one of the most promising today. We need to ensure that Russian producers play a key role in that market.”

Overall, I feel it is imperative to improve conditions significantly for investments in agriculture, increasing the appeal of this capital-intensive and technological sector of the economy. The Russian market, the market of the newly-formed Eurasian Economic Union – and as we know, that’s over 170 million people – is one of the most promising today. We need to ensure that Russian producers play a key role in that market and can systematically develop their businesses, creating new, modern jobs in rural areas.

In addition to strengthening our positions in the domestic market, we must also gain a footing in global markets. To do this, it is vital to increase access to resources for implementing goals that have been set; first and foremost, I am referring to long-term credits, as well as broadening the range of convenient financial instruments available, taking into account the particulars of working in rural areas.

Colleagues, today I would like to hear your suggestions. Although we have discussed this topic many, many times, life nevertheless moves forward and conditions change, so let’s talk again. This is a key element of development.

I repeat, it is important for us to help agricultural producers reach an acceptable return on investment, create the option to launch new investment projects and programmes. Finally, it is imperative to improve the quality of the domestic market, carefully monitoring price formation, eliminating unfair competition, smuggling and counterfeit goods. Ultimately, this directly affects the quality of the products available to Russian consumers.

Let’s discuss all these issues.


June 18, 2014