Visits within Russia

14 january, 2010 16:30

Prime Minister Vladimir Putin chairs a meeting on poultry production and development of Russia’s poultry market

"We will succeed only if we replace imports with goods that are completely safe, of a high quality and, importantly, sold at affordable prices. Both producers of agricultural goods and consumers - the Russian people - should benefit from this."
Vladimir Putin
At a meeting on poultry production and development of Russia’s poultry market

Mr Putin's opening address:

Good afternoon, colleagues, friends.

I have invited you to the Leningrad Region because it has a very high productivity in agriculture, uses modern technology and posts good results. We have just returned from one of the farms, where we saw how they organised work there. However, I have invited you here to discuss a specific issue: the development of the Russian poultry meat market and poultry breeding.

At first glance, it seems to be a trivial issue, but in fact it concerns millions of Russians. Poultry meat enjoys high demand in Russia. Millions of Russians eat poultry meat.

Poultry breeding is also the profession of everyone in this audience, and therefore you know that recently, in 2007, we satisfied only 60% of the demand with home-grown products and imported the remaining 40%.

Poultry breeding has been developing fast in the past few years. It posted a 12% growth in 2009, and now we can satisfy over 75% of the demand. But we still have to import nearly 25%, which is too much.

However, I want to say again that we are working hard to replace imports. I hope that government support has contributed to this trend; we have allocated long-term investment loans for the construction of farms and subsidised interest on loans.

Also, in the past few years we actively used the mechanism of import quotas. We have been working in coordination with other market operators, above all you, the producers. I believe that we are protecting the interests of Russian producers efficiently.

In addition, you know that the new law on trade has come into force, stipulating strict deadlines for payments to the suppliers of agricultural products.

We have set the strictest deadline for perishables, 10 days, I think.

I hope this measure will have a positive effect, and will help to strengthen the financial situation of agricultural enterprises. I believe that the positive trends we saw in the past years, including the crisis of 2009, have persisted and will also persist in the future, so that we will fully meet the domestic demand with home-grown products soon, in four or five years at the most, and will also occupy a befitting place in the global market the same as it is happening with some other agricultural products, in particular grain.

Of course, efforts to replace imports are not an end in itself, as I have said more than once. We will succeed only if we replace imports with goods that are completely safe, of a high quality and, importantly, sold at affordable prices. Both producers of agricultural goods and consumers - the Russian people - should benefit from this.

It is from this angle that I suggest discussing the situation on the domestic market today. In particular, I suggest that we discuss the influence of the introduction of stricter sanitary norms for poultry meat production. You know about this, these rules have been introduced in the EU countries and have been effective there for some five years, I think. I am referring to the changes we announced long ago, in May 2008.

All producers knew about them and were expected to respond accordingly. In general, this is not a complicated issue.

We planned to introduce these new rules on January 1, 2009. What am I referring to? I am referring to the use of a chlorine solution for washing chicken; it should have no more chlorine than tap water. To implement these measures, we should make some changes and invest some money, but we did not demand anything extraordinary or special. I repeat, these rules have been effective in the EU countries for years.

We planned to introduce these new rules on January 1, 2009, but had to postpone them until January 1, 2010 because, let us be honest, our poultry sector could not produce a sufficient amount and a required variety of goods at the required price. Therefore, we postponed [the introduction of these rules] until later, until January 1, 2010.

I would like to say again that all market players, including foreign companies, had enough time to prepare for work in the new conditions. They only had to start working, to invest money, not to stint it, in due time. If they had done so, some trading companies that purchase goods abroad would not have frightened people with unjustified sharp price rises and the like.

We must invest in domestic production and do it in due time, instead of sitting on our hands.

According to the information provided to the government, an overwhelming majority of Russian producers have retuned production and invested huge sums in modernisation. In fact, they invested in enhancing the safety and quality of their products.

Unfortunately, some of our partners, above all companies in the United States, have not shown readiness to respect the new Russian standards. In fact, these are not purely Russian standards; these are the standards that are applied in the European Union. We have simply decided to use them in this country.

A short while ago, the quota for American suppliers was 1.3 million tons annually. We have cut it to 600,000 tons. In 2010, we are prepared to give our American partners a quota of 600,000 tons, the largest quota of all exporters to Russia. But they must respect our standards.

Today we should discuss these issues and take decisions on some of them. This is why I have invited you here.

First, we must use additional reserves to increase domestic production and facilitate the implementation of development plans in the sector. This is what I plan to discuss with you today. Do you think we are doing enough in this sphere? Which part of the government's policy is having a positive effect on your efforts, and what is still lacking?

Second, if some foreign producers do not or cannot comply with our safety requests, we will work with other suppliers. We have certain proposals regarding this. I will tell you about them later today.

Of course, there are no hidden motives in this, especially political ones. Absolutely none. Our only considerations are the economy and food safety.

Our key task is to protect people's health. I want to say that we should be extremely careful in our efforts. Also, we must ensure stability on the domestic market.

The most important thing we will discuss today is streamlining our efforts to develop domestic production, to ensure the supply of requisite goods of the necessary variety at coordinated prices. We must also consider ways to adjust these actions to the gradual replacement of imports - we must not allow any rash actions or unnecessary moves here.

We must know full well that our domestic producers must ensure the requisite amount of goods of the required quality at affordable prices. I repeat, we should coordinate these efforts with the gradual replacement of imports with domestic goods. This is what we are going to discuss today.

I would also like you to tell me what else we should do to ensure that this work proceeds according to the schedule we will outline today.

Let us get started. Thank you.