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The participants discussed measures to raise the quality of services in the housing and utilities sector, ways of attracting investment to this sector, the Agriculture Ministry’s current work and the harvesting campaign.

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Vladimir Putin: Good afternoon, colleagues.

We will hear today from [Minister of Construction, Housing and Utilities] Mikhail Men, who will tell us about attracting investment, particularly private investment, to the housing and utilities sector. This is a very important matter and it is clear that its resolution is crucial if we are to bring about any serious change in this sector.

Before we turn to this issue though, I would like to hear from [Agriculture Minister] Mr Tkachev on the work in this sector and the situation with the harvest. This is also an issue of national impact, so I think that it will be useful and interesting for us all to hear about it.

Mr Tkachev, please go ahead.

Agriculture Minister Alexander Tkachev: Thank you.

Mr President, right now, the harvesting campaignis in full swing in all regions. We have harvested nearly 20 million tonnes of grain from an area of five million hectares, with output per hectare growing by 200 kg against last year’s figure and coming up to some 3,700 kg per hectare.

I need to mention specific regions. Droughts decimated crops on an area covering 1.5 million hectares in Volgograd, Saratov, Samara, Orenburg and Irkutsk regions, Trans-Baikal Territory and the Republic of Kalmykia. In Volgograd and Samara regions, a state of emergency was declared due to the drought. We are now working to assess the damage caused to agricultural producers. And, of course, we will do everything we can to provide timely help and support.

Given the increase in output I mentioned earlier, we expect to have a harvest of at least 100 million tonnes this year. We also forecast an increase in sugar beet yield of up to 37 million tonnes; this will put all our domestic sugar mills at just about full capacity.

We expect to produce over 15 million tonnes of vegetables and 31 million tonnes of potatoes thanks to the construction and modernisation of greenhouses (this year, we will be constructing over 200 hectares of modern capacity) and vegetable storage and processing facilities.

I want to say that agricultural producers’ reserves of diesel fuel and gasoline exceed last year’s by about 10%. On average, equipment readiness in Russia is higher than last year. I want to tell you that within the framework of fulfilling the anti-crisis plan, we have implemented support measures and allocated two billion rubles worth of additional resources to subsidise agricultural equipment manufacturers. The volume of subsidies will account for 25% of the equipment price. Earlier, that figure was 15%. We expect this market to rally significantly in the second half of the year with the farmers buying some 5,000 units of equipment.

Also, Rosagroleasing has increased its capital and as a result, agricultural producers will receive about 700 units of home equipment.

We have already transferred 153 billion rubles in subsidies to the regions. About 60% of this money was transferred by the regions directly to agricultural producers. That’s 94 billion rubles, or a 1.5-fold increase over the same period last year. Disbursement is proceeding normally, in accordance with the farmers’ needs.

Modern state support is yielding results. Yesterday, I reported to Mr Medvedev at a meeting. In the first half of this year, agriculture has shown stable growth of over 3%. I feel that at the end of the year, this figure will increase significantly and I want to use this opportunity to thank the Government of the Russian Federation for maintaining the same levels of funding for domestic agriculture, for Russia’s agro-industrial complex in 2016. This will indeed provide good potential and opportunities for serious growth of up to 7–10%.

Thank you.

Vladimir Putin: Mr Tkachev, agricultural producers have repeatedly raised questions, and still point out that our market continues to receive agricultural products that come from nations included in the sanctions list of the Russian Government with regard to our retaliatory measures. What is actually happening? What is your assessment?

Alexander Tkachev: Unfortunately, this does happen. As a result of some speculations, third countries are importing products, which are not actually grown by our neighbours, sort of illegally, through certain borders and under fake certificates.

I want to use this opportunity to ask you, Mr President, and the Russian Government to do everything possible to allow us to destroy illegal agricultural imports crossing the Russian border right on the spot. Unfortunately, the Russian law requires us to send these imports back to suppliers; this way, we will never be able to resolve this issue, which first and foremost, affects our domestic agricultural producers, because products of unknown quality are entering the market at a low price. And, of course, given today’s policy of import substitution, this would certainly be the right decision.

Vladimir Putin: Mr Medvedev, what is your opinion?

Prime Minister Dmitry Medvedev: Mr President, indeed, this is a problem. And it is clear that, unfortunately, certain dishonest companies take advantage of this. The products are being imported to third countries but end up on the Russian territory. Then, these products, which are essentially illegal imports, are sold here. This eventually affects the interests of our agricultural producers, who grow the same products, sometimes of better quality, but unfortunately, cannot sell their goods on the market.

I think we could introduce the same strict measures as were once introduced, following your suggestion, with regard to sturgeon roe.

Vladimir Putin: Very well.

Let’s agree with the Minister’s suggestion. I ask the Presidential Executive Office and the Cabinet to work on this together with lawyers and come up with a corresponding decision.

Alexander Tkachev: Very well.

Vladimir Putin: Thank you.

What about fuels and lubricants? You said everything is okay?

Alexander Tkachev: Yes. The stores are better than last year by 10%.

Vladimir Putin: In this respect, there is a question of natural gas motor fuel. This year, we are allocating three billion rubles in subsidies for purchasing corresponding equipment. What are the prospects here?

Energy Minister Alexander Novak: Mr President,

Two years ago, you held a meeting on broadening the use of natural gas motor fuel. Work in this area has been intensified significantly. Federal executive agencies and the Cabinet conducted work to improve the legislative and regulatory framework aimed first and foremost at removing administrative barriers and increasing the investment appeal of using natural gas motor fuel by building the corresponding infrastructure to store, transport and sell natural gas, as well as converting automotive vehicles to natural gas fuel.

I would like to report that the fire and industrial safety requirements to facilities selling natural gas motor fuel have been updated. Amendments have also been made to the Land Code of the Russian Federation, significantly simplifying procedures for providing tracts of land to build filling stations.

We also updated technical regulations for natural gas fuel-based equipment and gas motor fuel quality requirements, lowered import duties for equipment that is not produced in Russia, and compiled a list of 23 priority regions to implement the projects to convert the vehicles to natural gas.

We have harmonised a large number of standards and regulations. Overall, I would like to note that as of today, we can already see serious changes in the use of natural gas fuel.

As recently as 2014, the volume of natural gas use increased by nearly 10%, to 414 million cubic metres. Last year, for the first time in recent years, we put seven natural gas fuelling stations into operation. There are 31 stations under construction now that will begin operating this year. Overall, Gazprom, Rosneft and NOVATEK plan to have 500 new natural gas fuelling stations in operation by 2020.

In accordance with our forecast, we will increase the volume of natural gas motor fuel consumption more than three-fold by 2020. And here, I would like to point out that Russian regions have gotten actively engaged in this work. We are regularly holding meetings with the Industry and Transport ministries, governors and regions. Twenty-nine regions have adopted programmes to develop and use natural gas fuel. Under these programmes, we plan to put over 34,000 units of equipment that use natural gas fuel into operation by 2020, thus reducing businesses’ expenditures by 28 billion rubles a year as a result of using this type of fuel. We also plan to reduce air pollutant emissions by at least 15,000 tonnes per year.

As far as investment volumes are concerned, we expect that the total investment will be around 140 billion rubles by 2020.

Mr President, the most pressing task now is to synchronise the construction of the natural gas filling infrastructure and demand for natural gas. The opportunity to turn the existing petrol stations into multi-fuel ones offering both petroleum products and natural gas would help enhance the accessibility of such fuelling complexes for the consumers. In other words, alongside building new gas stations we suggest reconstructing the existing petrol stations, of which we have over 20,000 across the country. This would not involve all of them, though, because natural gas may not be equally effective in all regions.

Nevertheless, we are working on lifting the existing regulatory limitations on installing natural gas dispensing equipment at petrol stations. For this purpose, the Energy Ministry has drafted a law to amend industrial safety legislation to remove natural gas dispensing facilities from the list of dangerous production facilities. We estimate this would make it possible to redesign more than 2,000 existing petrol stations.

A relevant draft law was approved by the Government of the Russian Federation and submitted to the State Duma, which approved it in the first reading on May 13. We expect it to pass the second reading as well. This will give additional impetus to the development of natural gas fuel market.

We will continue implementing the measures you instructed us to develop as they were approved by the Government of the Russian Federation.

Vladimir Putin: Is that for autumn?

Alexander Novak: Yes, for autumn.

To be continued