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Meeting on prospects for the harvest and the current situation on the grain market

July 25, 2011, Michurinsk

Dmitry Medvedev held a meeting On Prospects for the Harvest and the Current Situation on the Grain Market.


President of Russia Dmitry Medvedev: Colleagues,

First of all, I would like to congratulate everyone on the successful start of the harvest. We just had a chance to see how everything is looking here in Tambov Region. Overall, things look good. Twenty million tonnes of grain have already been harvested as of the middle of July.

Weather conditions have also been mainly advantageous for the harvest. And if things continue similarly, I hope we will have the ninety million tonnes of grain we planned for, and perhaps even slightly more. In that case, we will not only have bread for ourselves, but also be able to continue developing our nation’s grain export potential.

Currently, we have sufficient grain reserves and the situation on the domestic grain market is stable. As you know, we were able to achieve this and decrease prices due to some timely grain interventions. Right now, we have 6.7 million tonnes of reserves in our intervention fund.

We have these reserves and can use them again if, for example, there is a sharp increase in grain prices on the global market. I believe that they will be sufficient, and for the time being, there is no need to take additional measures to regulate the grain market.

These figures on cultivated land and ground tonnes of grains are created through the sweat of our farmers, even with today’s modern mechanisation. This is particularly true given that last year was very trying for our agricultural industry. We lost nearly one third of the harvest – as much as 30 million tonnes; we were forced to stop exports; we had to regulate the situation on the food market almost in manual mode. We also had to make an emergency decision to provide additional financial assistance to agricultural producers who found themselves in difficult circumstances. Let me remind you that the overall volume of aid was about 70 billion rubles [over 25 billion dollars]. This is more than half of what we spend yearly to support the sector as part of the government programme for developing agriculture.

Certainly, we will continue to support farmers facing tough situations. Nevertheless, federal funding must be spent as efficiently as possible and aimed concretely at developing the industry. Meanwhile, we need insurance for risks such as weather anomalies and crop failures, same as in other nations throughout the world.

I know that many problems remain, but we must all learn to work in a civilised way; in this case, that means awaiting compensation from an insurance company rather than the government. I am certain that the agricultural companies will need no urging to get insured, assuming the payments are not too high and guarantees by the insurers are reliable and sound. Last year, I gave instructions to develop an insurance system for agricultural risks wherein the farmers’ interests would be taken into account as much as possible.

Colleagues, I would like to inform you that today, I signed a law on government support for agricultural insurance and amending the Federal Law On Developing Agriculture. I would also like to hear your opinions on it – the opinions of agricultural producers and insurers.

I want to say again that a great deal depends on having sound insurance policy in this sector. This is one of the key mechanisms for ensuring the competitiveness of Russia’s agricultural production on the internal market, as well as the external one.

There is one topic I would like to address: Russia’s accession to the WTO. In this context, I would like to say that we are not discussing any reductions in government support for agricultural producers following WTO accession. As you may recall, we are committed to providing nine billion dollars in assistance through 2012, with some gradual reduction through 2017.

Nevertheless, that level of government support will be almost identical to what we have right now. In other words, we will not have any barriers to implementing current and planned long-term programmes to develop and modernise Russian agricultural production. The level of tariff protection for basic agricultural products will also remain sufficient; indeed, Russia has the right to increase import customs duties for some of those products.

The level of protection for the meat market, as well as sanitary and phytosanitary control, are still the most acute issues in the talks. We are defending our approaches, wherein investment projects in Russian livestock breeding must remain advantageous, and control regulations must firmly protect consumers and be comfortable for trade.

This is what I wanted to say in the beginning.


July 25, 2011, Michurinsk