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President of Russia Dmitry Medvedev: Good day!

We have already discussed this topic, but nevertheless I would like you to tell me and everyone else at the same time what the harvest will be like this year. Perhaps you could go into more detail concerning current market prices, since this is of concern to all farmers and in the final analysis also affects the overall situation.

Agriculture Minister Alexei Gordeyev: I should point out that this is the first year of a five-year government programme to develop agriculture. Simply deciding on such a programme was an important milestone for agricultural policy. Of course, all this is thanks to the priority national projects and in some measure – I would say in large measure – this has led to impressive achievements in the current year. In particular, more than 100 million tonnes of grain and vegetable crops have been harvested. There was a comparable harvest in 1992, yet under the planned Soviet economy when much more land was under cultivation.

It should be noted that this is a historic yield, that is, we have broken the record of 22.2 hundredweight [per hectare]. Russia has never seen such yields or such productivity before. I should stress that we have broken a number of records: for the first time in Russia we have collected 60 million tonnes of wheat, which happens to be the most valuable type of cereal crop. We have also had a very good corn harvest, more than six million tonnes, another record when compared to the Soviet era and to more recent years.

And a number of other indicators suggest that we will be able to satisfy all Russia's food and fodder needs. We may also have 20–25 million tonnes for export.

Dmitry Medvedev: This has been the subject of some very intense discussions recently – will we be able to store that much?

Alexei Gordeyev: There are problems in the Central Federal District with storing such a large quantity of grain. Basically we're talking about fodder grain. The Ministry is now considering how to help move grain to other regions of Russia, where there is a lot of livestock and not enough grain for them. We are conducting a detailed analysis of this problem with the Russian Grain Union and a solution will be found.

Dmitry Medvedev: You must do everything to maximise storage for the harvest, because it is such an outstanding one and of course we are now in a different situation.

Alexei Gordeyev: In terms of livestock, it stands out in the state programme. To be sure, here the results are also quite high. In fact they are the result of our two-year priority national project. In particular, growth in meat production this year will amount to more than eight percent, and milk production continues to grow at a rate of about 1.5 percent. In general we can say that in terms of overall performance this year has been the best for all the reform years, beginning in 1992.

Dmitry Medvedev: Can you clarify the meat situation so that I can really grasp what you're saying? This is a higher figure for meat, as I understand it. This is for poultry, and pork and cattle?

Alexei Gordeyev: Yes, basically this is attributable to the growth achieved by the poultry industry, a growth of sixteen and a half percent, and the swine industry, an increase of eight percent. There are problems in the production of beef, so next year we are working out a special programme for that industry. There will be additional money for the development of beef cattle breeding.

Dmitry Medvedev: This should be a continuation of what we're in fact doing as part of the national project to increase cattle production.

Alexei Gordeyev: The main problem is the one you touched on, the low market prices. On the one hand, unfortunately, this is bad for the farmers, but of course on the other hand, it has been a powerful factor in curbing inflation: this year agricultural prices have gone up by only half a percent. Obviously because there has been such strong growth in the cost of logistical resources, especially oil, lubricants and fertilizers, the economy is under pressure and this reduces farmers' earnings, but the government cabinet is taking several measures.

Altogether this year budget has increased by 60 billion roubles, i.e. support available from the federal government has gone up by 75 percent. The money will primarily go just to compensate for the additional cost of feed, fertilizers and lubricants. There are good reasons to suppose that this will happen before 1 January. The most recent version is now in the State Duma (they are considering amendments to the budget this year) and I hope that all these documents will soon be signed.

Dmitry Medvedev: Good.

So you think that special measures need to be taken?

Alexei Gordeyev: Of course we will consider issues such as stabilising the grain market. There is an opportunity to buy about six million tonnes of food grain and three million tonnes of fodder grain. To do this, we have just recently raised wholesale prices for wheat and, in general, the money in Rosselkhozbank is earmarked for this purpose. We will now take action and we will certainly look at what else needs to be done.

Dmitry Medvedev: Good.

There is one last thing I would like to say. Despite the current financial difficulties, all the measures necessary for maintaining sufficient capital and liquidity in the Rosselkhozbank system and other banks, the measures that ensure the normal functioning of the agricultural industry, must be taken. I have already said this to the cabinet and I would like to say it once again to you.