Prime Minister Vladimir Putin chaired a meeting on improving the effectiveness of state agricultural policy
Prime Minister Vladimir Putin arrived in Yessentuki where he chaired a meeting on improving the effectiveness of state agricultural policy. Before the meeting the prime minister visited a farm dairy in the village of Suvorovskaya.
Speech by Vladimir Putin at a meeting on improving the effectiveness of state agricultural policy:
Good afternoon.
As agreed, we will first concern ourselves with the problems of agriculture and the agro-industrial sector. This is our first meeting on the subject.
You know that a sharp rise in prices on the world food markets has had a serious effect on the situation in this country. It hit senior citizens, large families, and other vulnerable strata of the population, i.e. those for whom food takes up the biggest part of their family budgets.
In these conditions we ought to pay close attention to the development of the agro-industrial complex and the strengthening of stability on the domestic food market.
Russia has a unique agricultural potential. It allows us not only to meet our needs in full but also be a key player on the world food market.
The basis for that is already provided, and a national agricultural project has been one of the factors. The development of that complex has become a priority in the work of federal and regional bodies of authority. Billions in investment are flowing into the sector.
I have just spoken with the agriculture minister and we recalled that in the late 1990s 90% of farms in the country were loss-making. Imagine, 90%! Today their number is still large, but the figure is down to 25%. Not 90%. We now see that the mood of those living and working in the countryside is improving.
The adoption of a federal law on agriculture and a five-year state programme marked a milestone in our policy. Massive funds are currently being allocated at federal and regional levels to pursue the state's agricultural policy. Our key objectives are: to ensure the sustainable development of rural areas, to improve the quality of life in the countryside, and secure a substantive increase in the efficiency of the agro-industrial sector and competiveness of Russian-made products. In other words, we must protect ourselves against sharp fluctuations in world markets.
In doing so, our policy must guarantee our people affordable and stable food prices. At the same time we have to create incentives for the promotion of effective farming".
I would like to dwell on the following key points.
First. We need to substantially increase the production of basic types of farm produce. This concerns above all meat, milk and grains. Particular attention should be paid to grains - the prime source of all agricultural production.
In world practice, an optimum annual figure is one tonne of grain per head of population. We have done a lot to raise the output of grains lately. You know that we have a fairly good export potential. But in order to reach the level I indicated, we need not only to expand sown areas but also get down in earnest to improving yields and effectiveness of grain production.
Second. We must think of a technical and technological "retooling" of the industry. For these purposes we must develop effective leasing instruments and practice long-term loans.
Third. Prices for basic resources consumed in the agro-industrial sector must be stable. I am not telling you anything new here: these are fuel, lubricants and fertilisers. To keep their prices steady, we must give more teeth to anti-monopoly legislation and make wider use of subsidies.
Fourth. We must introduce a modern system of risk management. The state programme provides for measures to develop agricultural insurance. In practice, insurance is not widely used yet. The situation must be drastically altered.
Fifth. We need up-to-date market mechanisms for responding to changes in basic farm prices. A system of constant monitoring must be set up. And if prices overshoot their boundaries, appropriate mechanisms must be automatically triggered. I mean, of course, market mechanisms: purchase and commodity interventions, and customs and tariff regulation. This set of tools exists and is occasionally used, but in an unsystematic way and often, unfortunately, too tardily.
In a highly volatile business situation and with prices growing on the world food markets, the Ministry of Economic Development and the Ministry of Industry and Trade must make an inventory of all Russia's foreign trade agreements in the agro-industrial sphere and jointly with the Ministry of Agriculture make suggestions on improving the state of affairs in this area. Being guided, of course, by the interests of domestic producers and consumers.
In this context, we should also thoroughly shake-up the rules and regulations governing the production and sale of foodstuffs and adopt modern technical by-laws. Such work is already being done in the Government and the State Duma, assisted by branch-specific ministries. It must be accelerated and coordinated.
Finally, to develop the agro-industrial complex and food market, we cannot do without an effective trade policy, one that would reduce costs on the way from producer to consumer. We must meaningfully focus on such things.
Appropriate directives will be issued following today's discussions.
Now I give the floor to Alexei Gordeyev.
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Final remarks by Vladimir Putin:
There are some additional measures to enforce and some additional steps to take to insure the sustainable development of rural territories and quality of life in the countryside, make farm production and genetic potential of crops and livestock more effective, give attention to the primary processing of raw materials and pay most serious heed to the contractual legal framework.
Following this meeting, a draft government directive to ministries and government departments has been drawn up.
In the course of our discussion today I updated some of its points. Now I will give you the main provisions of this directive. They are to:
• ensure effective measures, including those provided by anti-monopoly legislation, to stabilise prices for basic resources consumed in the agro-industrial sector, above all fuel, lubricants and fertilisers;
• draft proposals for improving insurance in agriculture;
• monitor basic farm produce and food prices;
• improve the mechanisms for responding to world market fluctuations and price growth, and bear in mind that these mechanisms must be market-oriented and set in motion as soon as the price situation on the market is changed. This also includes drafting normative legal acts to expand state purchase and commodity interventions and collateral operations, including on the dairy and meat market;
• draft normative legal acts to speed up customs and tariff measures to regulate trade in agro-industrial products;
• formulate and approve rules for determining and monitoring the profitability of principal agro-industrial products;
• analyse the socio-economic effects of foreign trade agreements concluded by the Russian Federation in the agro-industrial sector and report the findings to the Government together with foreign trade proposals;
• draft and submit to the Government a federal law to encourage farm producers' associations;
• speed up the drafting of rules and regulations governing safety and quality of food ingredients and foodstuffs, especially meat and meat products, and poultry meat. The results are to be reported to the Government before May 26, 2008;
• speed up submission to the Government of a draft federal law on state regulation of trade in the Russian Federation, setting up a separate section on the sale of agro-industrial products.
As Mr Morozov [governor of the Ulyanovsk Region] suggested, we should submit to the Government in the established manner a draft bill to take account of the performance of farming when assessing the work of local government bodies in city and town districts and municipal regions located in rural areas.
And finally, speed up the submission to the Government of a draft federal law on changes to the budget for 2008 and the 2009-2010 planning period, in order to allocate 10 billion roubles to farmers in the first six months of 2008 to compensate them for the costs of buying mixed fodder; 8 billion roubles for purchasing mineral fertilisers, and 30 billion roubles to increase the authorised capital of Rosselkhozbank so that long-term agriculture loans could be granted and grain purchase interventions made.
I call your attention to what we have agreed upon. This money must be spent by all means, including on no less than 5 million tonnes of grain in possible future interventions.
Lastly, proposals should be made to the Government on keeping tax incentives to produce and sell agro-industrial products.
Thank you for your attention.
I would like to congratulate you all on the victory our national team won in the world ice hockey competitions.
