Transcript of the meeting:

Vladimir Putin: Be seated, please. What is your name?

Yulia Khodakovskaya: I am Yulia Khodakovskaya.

Vladimir Putin: I am listening, Yulia.

Yulia Khodakovskaya:  To begin with, I am pleased to be received by you. My story is this: I am 31 years old and expecting my first and much desired child.

Vladimir Putin: My congratulations.

Yulia Khodakovskaya: Thank you. But amendments to the federal law on social insurance in case of temporary disability and motherhood have somewhat marred the joy of the upcoming event. We are watching the changes and see that the government values literally every baby in this country. You have introduced maternity capital and birth certificates, for which we owe you a separate thanks. Dmitry Medvedev devoted an entire presidential address to this subject and stressed how efficient the state policy should be in this area and how important it is for the state to have second and third children born into a family. At the same time, a document has been signed that seems to negate all these good intentions articulated in the address.

Vladimir Putin: Oh come, come. Not negating …

Yulia Khodakovskaya: I am referring to the new wording of the law, and it substantially alters the situation. In fact, it not just alters it, but worsens the financial condition of future mothers, as a rule, by one-third and in some cases by 50% to 65%. As for myself, I was lucky to go on maternity leave on December 27, 2010 and, naturally, I received my grant in the size I expected, that is, according to the law’s old wording. If I had gone on my maternity leave on January 10, 2011, I would have lost more than half of my benefit, because current calculations are based on two calendar years and the amount reached is divided by 730 days. In 2009, more than four months of these two calendar years was spent on sick leave, with a knee fracture …

Vladimir Putin: What happened?

Yulia Khodakovskaya: I had a skating accident.

Vladimir Putin: You had a fall?

Yulia Khodakovskaya: Yes, and broke my kneecap. In 2010, already pregnant, I had to spend over two months in confinement. With sick pay deducted from the total, my benefit would have been greatly reduced. Expectant mothers, naturally, quickly counted how much each would get in 2011, which must have prompted a current review of and amendments to the law. I know that on January 14, parliament adopted on the first reading the amendment allowing a woman to opt for a more favourable arrangement in 2011. But it is good only for 2011, or the interim period that concerns women who will go on maternity leave and a leave to raise a child in 2011. And what about the future?

That is to say in 2012, we will have a calculation schedule which will worsen a mothers’ position. Naturally, a second child in my family will be a critical issue. I want to raise my child with enough money to spend on some sports groups, fine clothes and other things.

I therefore have this question: why do these amendments (parliament agreed they hurt a mothers’ circumstances) deal only with rollovers through 2011? 

Vladimir Putin: Why do you think the lawmakers decided to change the applicable laws?

Yulia Khodakovskaya: I do not know. Perhaps the Social Insurance Fund had some funding problems …

Vladimir Putin: No. The deputies saw the need because in some cases part of the pay during the working time is issued in envelopes and it is not until the last moment – before the disability period sets off – that they switch to an officially reported salary or a greater one. This way, they increase the pregnancy and maternity grant.

But overall I agree with you. If we want to have more babies born in this country and the population situation improved, we should of course avoid worsening the position of future mothers.

A variety of solutions is currently being considered. You know that our pregnancy and maternity grant is now much higher, its upper limit …

Yulia Khodakovskaya: Wait a minute, the upper limit has remained at the 2010 level.

Vladimir Putin: 34,000 [roubles a month].

Yulia Khodakovskaya: 34,500.

Vladimir Putin: 34,500.

Yulia Khodakovskaya: There are workaholic women who work from morning till night and earn the top salary: 50,000 to 60,000 [roubles a month]. And though they pay taxes from this amount, they are told: “Excuse us, but we can pay you only 34,500.” Again, we are a bit …

Vladimir Putin: Well, 34,500 is much higher than the average pay across the economy.

Yulia Khodakovskaya: I agree. But all the same …

Vladimir Putin: The average salary in this country is now just over 20,000 [roubles a month].

Yulia Khodakovskaya: When people earn a lot, they also want to receive …

Vladimir Putin: Yes. It is all connected with the top amount from which social benefits and taxes are calculated. Our upper limit there is just over 400,000 roubles. We have lifted it, and last year pregnancy and maternity grants rose as well, to 34,500. Correct, you are well informed. This allowance is paid for four months, and then follows …

Yulia Khodakovskaya: Yes, for 140 days … 

Vladimir Putin: Then follows …

Yulia Khodakovskaya: … then follows 40% of the average salary.

Vladimir Putin: Yes, for eighteen months. Next we have a birth grant of 12,000 [roubles]. And there is also maternity capital – which we regularly index. This year, it will be somewhere in the neighbourhood of 370,000 roubles, I think.

But this payment, about which you ask and which we are discussing, is… Of course, the proposed solution is too inflexible and does not reflect our desire, the desire of the state, to improve demographics and help women who decide to become mothers and have a child, especially a second child.

We debated the issue just recently once more. Judging from your question, it is of great interest to you and to women in the same situation.

The final solution – I will raise the matter again with my colleagues at United Russia in the Duma tomorrow – will be this: first, we will leave the old procedure for another two years – 2011 and 2012. Second, we will greatly ease the procedure for calculating the amount due to women deciding to go on a pregnancy and maternity leave. Cases like the ones you mentioned in connection with your knee injury and which can materially cut the overall assistance within two years will be excluded from this two-year period. Say, the time spent on sick and some other kinds of leave will be excluded from the formula.  

Everything that reduces general income will be omitted. I presume, given this approach, women will face no problems or losses …

This is the first thing. Second, we will pass it in the near future, but it will be effective starting January 1, 2011, so that young mothers will be able to take advantage of the benefits over the entire period (from January 1) and will lose nothing this year.

Thank you very much.

Vladimir Putin: I hope you will like this trouble-shooting option.

Yulia Khodakovskaya: Sure, thank you.

Vladimir Putin: I wish you all the best. Goodbye.

Marina Dmitriyeva: Good afternoon.

Vladimir Putin: What’s your name?

Marina Dmitriyeva: My name is Marina Dmitriyeva. Mr Putin, you have visited the Orenburg Region regularly.

Vladimir Putin: That’s right.

Marina Dmitriyeva: Apart from natural gas, crude oil, down shawls or the Orenburg Folk Chorus, the Orenburg Region boasts an ancient cultural heritage. Archaeological finds from the Filippov Hills have made our region famous all over the world. Excavation work still continues there.

The Kargala Copper Mines, a unique federal archaeological monument, are located in the Orenburg Region.

Mr Putin, what is now the Orenburg Region was the first area to start mining copper on the entire Eurasian continent. Ancient miners excavated this mine in the second millennium BCE (Showing materials).

Vladimir Putin: And where is this located?

Marina Dmitriyeva: In the region’s Oktyabrsky, Sakmarsky, Perevolotsky and Alexandrovsky districts, covering an area of 500 square kilometres.

Vladimir Putin: Is it due east?

Marina Dmitriyeva: No, it’s exactly 70 km from Orenburg.

Vladimir Putin: Near Orenburg?

Marina Dmitriyeva: Yes. Please visit us in the summer, and you will see blue grass there. Just imagine, there is no copper museum in the world. And we can establish the world’s first copper museum in Orenburg.

Please accept these books as a gift. You know, they were printed prior to the 300^th anniversary of prominent Russian geographer Pyotr Rychkov (1712-1777).

Pyotr Rychkov was the Columbus of the Orenburg Territory, the first Corresponding Member of the St Petersburg Academy of Sciences and an amazing person. As Chairman of the Russian Geographical Society’s Council of Trustees, you support geography, and you will find this very interesting.

And now I would like to discuss the most important thing. On October 1, 2011, we will celebrate the 220^th anniversary of Sergei Aksakov (1791-1859), a prominent Russian writer and storyteller who praised the nature of the Orenburg Territory and the entire Trans-Volga Region.

Vladimir Putin: Was he the one who write “The Scarlet Flower?”

Marina Dmitriyeva: Yes! It’s wonderful that you know this! He spent over 15 years in what is now the Orenburg Region’s Buguruslan District.

Vladimir Putin: Surely, you know the story “Beauty and the Beast.”

Marina Dmitriyeva: Of course.

Vladimir Putin: Which one was written earlier – “The Scarlet Flower” or “Beauty and the Beast?”

Marina Dmitriyeva: Aksakov translated this. But Aksakov expressed such profound love for our homeland, nature and the people that this fairy tale filled millions of human hearts with the scarlet colour of love.

Vladimir Putin: This is true.

Marina Dmitriyeva: The situation is quite vexing because there are so many monuments to Hans Andersen who wrote “The Little Mermaid” in Denmark, while not a single monument has been erected in Russia to the creator of “The Scarlet Flower.” But we will eventually accomplish this objective. So, look, Sergei Aksakov …

Vladimir Putin: Let’s build a monument to Aksakov.

Marina Dmitriyeva: Yes. Sergei Aksakov spent many years, 15 years, to be exact, at his grandfather’s estate in the Orenburg Region’s Buguruslan District (Showing materials). This is the entire estate of Sergei Aksakov including the landlord’s manor, restored in 1998. Here is another photo of the landlord’s manor.

Vladimir Putin: Nice work, beautifully restored.

Marina Dmitriyeva: Yes, this lime-tree alley was planted by Aksakov’s grandfather. Can you imagine this?

Vladimir Putin: In what year?

Marina Dmitriyeva: He bought the estate in 1760 …

Vladimir Putin: And the trees were already there …

Marina Dmitriyeva: No, the trees were planted by Aksakov’s grandfather.

Vladimir Putin: In the 18^th century?

Marina Dmitriyeva: Yes. Aksakov’s grandfather also commissioned an absolutely wonderful pond. In 2007, federal funding  helped to replace the pond’s locks with  new ones. Just imagine, it’s like a sea with black and white swans. We have all this. You know, newlyweds like to visit the place where fairy tale “The Scarlet Flower” was written. In 2011, we plan to restore the 5.6-hectare park, and plant about 400 trees there. The lime-tree alley that I showed you is also there. Some trees need to be treated, and about 80 new lime-trees planted. This building, notably, the landlord’s manor, the former stable, the housekeeper’s house and servants’ quarters are all in need of restoration. Objectively speaking, we have conducted a great deal of work that involved everyone, including the public, scientists, the regional government and the State Duma Committee on Culture. Grigory Ivlev, Chairman of the Duma’s Committee on Culture, treats the region’s cultural heritage with the utmost respect.

We have been working closely with the Ministry of Culture to implement the federal programme the Culture of Russia. We have filed an application and there is a good chance now that it will be included. This estate is federal property and part of federal-level cultural heritage. This is reason enough to include it in the federal programme.

The problem is it needs a little push that your support could give. I mean your personal support and that of United Russia, because if we do not have it…

Vladimir Putin: What kind of push do you mean? Are you talking about co-financing?

Marina Dmitriyeva: Yes, we need at least 3 million roubles to be provided by the regional government.

Vladimir Putin: Regional government? You will need to contact the governor. Or did you mean federal support?

Marina Dmitriyeva: Federal support too. Just to be sure that our project will be programme. And a small contribution from the regional budget. If the federal government allocates the 2.5 million roubles we have applied for, then the regional government must contribute another 3 million.

Vladimir Putin: What is the cost of the project?

Marina Dmitriyeva: We won’t need more than 5 million roubles this year – to restore the park with its beautiful lime alley, and the old stables. And a conference room will be needed of course to accommodate writers’ meetings.

Vladimir Putin: Right, Ms Dmitriyeva. We have the federal programme – Culture of Russia. Its budget is not large but your project is good and fits in well with the programme targets. I will ask the Minister of Culture to find the funding for you. When did you send your request?

Marina Dmitriyeva: Before the deadline of September 1, 2010.

Vladimir Putin: So it’s there already?

Marina Dmitriyeva: Yes.

Vladimir Putin: You’ll have the funding.

Marina Dmitriyeva: Thank you very much. I mean, people must know that restoring the Aksakov Estate is an important government project.

Vladimir Putin: How about building Aksakov’s monument here, in addition to restoring the estate? We should organise a tender for that.

Marina Dmitriyeva: Yes. But this won’t happen until next year when we’ll have more money. Now, unfortunately…

Vladimir Putin: A tender will also take time. Therefore, if it is announced today, you’ll be able to collect the proposals by next year, and your experts could select the best one - set up a special commission, pick the best project and implement it.

Marina Dmitriyeva: I can see what the monument should look like – the magic flower, the Beast… You know, Nastenka in the fairy-tale was really Aksakov’s granddaughter, Olga. Her father – Aksakov’s son – was the governor of the Samara Region. The whole Aksakov family was amazing – all outstanding and respected people, a model Russian family devoted to Russia, the Tsar and the Russian Church.

Vladimir Putin: Slavophils.

Marina Dmitriyeva: Yes. Thank you very much.

Vladimir Putin: Here is what we will do. I will talk to the governor and arrange the funding for your project. I hope the Orenburg Region will fulfill its part of the deal. And we’ll plan additional financing for the monument for next year.

Marina Dmitriyeva: Excellent!

Vladimir Putin: Agreed.

Marina Dmitriyeva: Thank you so much! You know, I have actually made a vow not to die until I set up the Kargala Copper Mines  Museum, the Aksakov Museum. I thought that would mean I’d have to live forever.

Vladimir Putin: You can live happily ever after.

Marina Dmitriyeva: Thank you very much Mr Putin!

Vladimir Putin: Next please. Go ahead.

Tatiana Korablyova: I am Tatiana Korablyova from the village of Troitsk, near Krasnokholm. My son is in seventh grade, in the Krasnokholm secondary school. We have a problem: the school is seven kilometers away from the village, and children have to use a bus to go to school.

Vladimir Putin: Is it a good school?

Tatiana Korablyova: Not really. But it’s OK.

Vladimir Putin: OK? How many students does it serve?

Tatiana Korablyova: 600.

Vladimir Putin: But it’s a large school!

Tatiana Korablyova: Thirty-six children from our small village go to that school.

Vladimir Putin: You say the school isn’t very good. What would you like to change - to improve?

Tatiana Korablyova: I wasn’t talking about improving the school. The problem is we no longer have the bus to take the children there. The old one was provided by the Orenburg city government, but they have discarded it. We no longer have the bus and our children can’t go to school.

Vladimir Putin: What is your village called again?

Tatiana Korablyova: Krasnokholm. The village is Troitsk, seven kilometers from Krasnokholm.

Vladimir Putin: Now where is the school?

Tatiana Korablyova: In Krasnokholm.

Vladimir Putin: Which school is it?

Tatiana Korablyova: School No. 84. But our village is administratively part of Orenburg…

Vladimir Putin: The federal government allocated a billion roubles last year to support the regions, and specifically to buy school buses.

Tatiana Korablyova: They discarded it last year.

Vladimir Putin: Do you mean you never got that money? I see. You know what, Ms Korablyova, I think your problem is easy to resolve. But let me now return to your statement that the school wasn’t very good. How would you like to improve it?

Tatiana Korablyova: It would be great to have a large gym.

Vladimir Putin: A gym? The school doesn’t have a gym?

Tatiana Korablyova: There is one at the Zarya leisure centre, but it isn’t part of the school. It would be good to have a school gym, or better still, a whole fitness centre…

Vladimir Putin: But you’re right. A gym is good, and a fitness centre, to have PE lessons there… I was just talking about this with my colleagues in our discussion of sports and fitness development. PH classes are key to grassroots sports and fitness. You are perfectly entitled to wish to have a gym at your son’s school. We’ll consider it.

Tatiana Korablyova: There is something else… The roads where we live aren’t good either. This road from Troitsk to Krasnokholm is dangerous. But our children ride it twice a day.

Vladimir Putin: That’s not good. When we talk about developing education centres, schools, we imply that large schools will provide better services than small ones. But we also need to think about transport and roads.

Tatiana Korablyova: Yes. These roads are just dangerous to use.

Vladimir Putin: And you say the school bus is your only problem. There are other problems too.

Tatiana Korablyova: Mr Putin… There is something else – something I was not going to mention at first. It just happened – something one of my colleagues asked me when she learned I was coming here. She simply begged me to tell you this: she took a mortgage, to buy an apartment for her daughter…

Vladimir Putin: In the same village, right?

Tatyana Korablyova: No, they live in Orenburg. They got a mortgage from a bank (the authorities verified everything in 2007, and everything was in order). In 2009 they received a summons to court; it turned out that the flat had been owned by someone who had been serving a prison sentence… This very flat.

Vladimir Putin: The one they had bought?

Tatyana Korablyova: Yes. The owner filed a lawsuit and was granted occupancy rights in that flat. They then filed with the regional court. The regional court decides against them and rules to register him as an occupant. They filed with another court and it also ruled to register him.

Vladimir Putin: In other words, they bought a flat from the wrong owner?

Tatyana Korablyova: Yes. So it turns out…

Vladimir Putin: The bottom line is that they were cheated.

Tatyana Korablyova: They still pay mortgage.

Vladimir Putin: And they have no flat.

Tatyana Korablyova: They have no flat.

Vladimir Putin: I see.

Tatyana Korablyova: That’s the problem.

Vladimir Putin: The matter needs to be looked into.

Tatyana Korablyova: That’s all. I have no more to say.

Vladimir Putin: OK. How many of your children go to that school?

Tatyana Korablyova: One. My oldest child has finished school, now my youngest child is there. He is in seventh grade.

Vladimir Putin: So it’s your second child, right? And what is your occupation? Where do you work?

Tatyana Korablyova: I am a nurse at a hospital.

Vladimir Putin: How are things at your hospital?

Tatyana Korablyova: Not bad.

Vladimir Putin: Don’t want to complain about the management? How many beds are there?

Tatyana Korablyova: I work in an outpatient clinic.

Vladimir Putin: Ah, you work in a clinic.

Tatyana Korablyova: Well, actually it’s in a village. They are turning it into a day hospital. There are very few beds.

Vladimir Putin: That’s a lucky coincidence: you have a problem with schools, and you work at a medical institution. Why is it lucky? Because we are launching a programme to modernise regional and municipal healthcare. Your region, the Orenburg Region, is getting 5 billion roubles from the federal budget for this purpose. And the region will contribute some of its own money. We will ask them to revise their programmes in part, in order to allocate more money for and pay more attention to rural healthcare. I have spoken to the governor, and I will see what their modernisation programme has to offer ordinary people.

Tatyana Korablyova: To be honest, we do not have a cardiologist or an X-ray specialist.

Vladimir Putin: There you are. All right.

Tatyana Korablyova: Thank you, goodbye.

Vladimir Putin: Hello. I’m on the line.

Alexander Khizhnyak: Mr Putin, I am Alexander Khizhnyak and I am the head of a private farming operation. First of all, I would like to tell you that the financial aid that the federal and regional government promised to farmers affected by the drought was paid to us before the New Year.

Vladimir Putin: Thank God. How much?

Alexander Khizhnyak: We got 1,602 roubles for every hectare of land written off.

Vladimir Putin: How much does that make in total? How many millions?

Alexander Khizhnyak: For our farm?

Vladimir Putin: Yes.

Alexander Khizhnyak: Our farm got 5.05 million roubles, that’s only for what was ruined.

Vladimir Putin: What was the size of the damages?

Alexander Khizhnyak: We sustained 27 million roubles in damages. We had a large area.

Vladimir Putin: That’s quite a lot.

Alexander Khizhnyak: We had droughts back-to-back in 2009 and 2010, practically 150 days without rain. The crops perished.

Vladimir Putin: Did you have loans?

Alexander Khizhnyak: Yes, of course.

Vladimir Putin: How much?

Alexander Khizhnyak: We had a 14.7 million roubles in bank loans and 22 million under a leasing scheme against our guarantee.

Vladimir Putin: What did you lease? A tractor?

Alexander Khizhnyak: We leased tractors, sowing and planting machines, new ploughs; now we are trying to build up our fixed assets.

Vladimir Putin: You had almost 37 million, right? Under leasing arrangements and a loan?

Alexander Khizhnyak: Yes, under a loan. We are preparing for the spring planting season, of course...

Vladimir Putin: Excuse me, I have a question in connection with this. Has the maturity of these loans been extended?

Alexander Khizhnyak: Yes, the maturity of the loans has been extended.

Vladimir Putin: So, there is no problem there?

Alexander Khizhnyak: No.

Vladimir Putin: By how many years, three years?

Alexander Khizhnyak: The maturity is extended every six months, 180 days.

Vladimir Putin: And then the loans are renewed.        

Alexander Khizhnyak: Yes, then they are renewed. Leasing payments are deferred by a year.

Vladimir Putin: On the whole, is this amenable to you?

Alexander Khizhnyak: Yes, of course, otherwise we wouldn’t have been able to manage financially. Of course, we are currently preparing for the spring planting season. The amount of spring planting will be increased to make up for the winter crops that had not been planted because of the drought in the autumn.

Vladimir Putin: Do you grow winter crops here?

Alexander Khizhnyak: Yes, of course. Last year we planted 3,300 hectares, and this year, 3,000 hectares…

Vladimir Putin: The results for winter crops are usually better than for spring crops, is that right?

Alexander Khizhnyak: Definitely. Last year we kept afloat because of the winter crops. This year, because of the dry autumn in 2009, the winter crops did not stand, so we are in a bit of trouble. But what worries us most at present is the price of diesel fuel. Last year it was sold to us at about 13,700-14,200 roubles per tonne, now they are charging 29,400 roubles per tonne.

Vladimir Putin: How much?

Alexander Khizhnyak: 29,400 roubles.

Vladimir Putin: And what was it before?

Alexander Khizhnyak: It was 13,700 roubles. The prices for mineral fertilisers, spares, electricity, gas, etc. have grown. We are aware of our responsibility to plant everything to provide food for the region and the country, but the financial situation is difficult. So we would like to know if the government is planning on offering additional financial assistance to farmers to help them with the spring planting.

Vladimir Putin: Assistance is forthcoming: we allocate an extra one billion roubles for mineral fertilisers, one billion for fuel and lubricants, and an additional billion. We will do what is usually done. You of course know that we work with our oil companies and urge them not to hike prices during the spring planting campaign for fuel and lubricants, especially for diesel fuel, of course. We will do this without delay. Besides, as I am sure you know, we have agreed to pay a bonus to those who do not reduce their cattle.

Alexander Khizhnyak: We are aware of this programme in our region.

Vladimir Putin: I don’t know, do you only grow crops or do you raise livestock too?

Alexander Khizhnyak: We raise livestock too.

Vladimir Putin: I just signed a document today; the governor asked me to issue instructions to the Ministry of Agriculture to transfer the money in support of those who comply with this programme in the Orenburg Region. So, you will certainly benefit from it.

Alexander Khizhnyak: Very good. You know, we have another proposal. We hope that Russia will join the WTO this year.

Vladimir Putin: Do you want us to join?

Alexander Khizhnyak: I accept it as something inevitable. But I would like to tell you something. At present, money is allocated for a multitude of programmes, to subsidise interest rates, for mineral fertilisers, etc. It is good that beginning in February of this year we will not have to do the paperwork for loan subsidies, the bank will do it for us. And this is exactly what we asked you for before. Thank you for following through with this.

We have another request. Could you instruct the government to consider and perhaps implement a single programme for subsidising farming costs like they do in EU countries, for example. You know that in EU countries they subsidise farmers to the tune of 300 euros per hectare, that’s 12,000 roubles. This would make it easier for us to make business plans because we would know the exact area to be sown. The government knows the size of the subsidies it is going to allocate. I think it would give agriculture a big push, would promote the upgrading of our machinery, because we have to increase the power available per hectare; we have under one horse power, which is not enough.

Secondly, we have the problem of applying fertiliser. We apply two kilograms of fertiliser per hectare in our region. This is just not enough. It is totally unsatisfactory because soil is depleted. It would give a boost to the processing industry, and most importantly, in our opinion, it would enable the government to regulate prices in the consumer market. If a consolidated programme were introduced… I don’t know, economic calculations have to be made, whether it should be 300 euros or 100 euros…

Vladimir Putin: Let us talk about the amount in roubles. It’s Russia.

Alexander Khizhnyak: Quite right. You know, as I was preparing for this meeting I calculated once again our costs per hectare based on current prices. While in 2009 it was about 3,200 roubles, today it is 5,100 given all these prices. Of course, if the programmes aren’t adjusted it will cost an extra 1,800 roubles per hectare just to bridge the gaps in diesel fuel and fertiliser prices. So, of course (we have experienced farmers and managers of agricultural enterprises), we could take part in the discussions of the working group at the State Duma and the government to determine the position. It would be a great decision; it would have an effect that would last for decades.

Vladimir Putin: Some experts tell me that this is a very costly mechanism that is unlikely to yield the effect your fellow farmers hope for. You know that we are subsidising lending rates by a fair amount already, with some types of loans subsidised 100%. All these measures that I have mentioned and those I have not yet mentioned – you know there is a whole range of support measures… Frankly, I am somewhat afraid that if we switch to subsidising on a per hectare basis, various agencies will start revising their programmes which have a very specific purpose (in general, the issue has long been discussed in the expert community). The main thing, like in medicine, is to do no harm.

Alexander Khizhnyak: Yes, of course.

Vladimir Putin: We have to watch our step. I am afraid that it may end up with decisions being made that would eventually reduce and not increase the overall amount of support. Subsidising on a per hectare basis means indiscriminate subsidies. But when we speak about targeted support, we take into account the climate conditions and a whole range of other circumstances. Nevertheless, it is a legitimate issue that needs to be discussed. We shall see.

Alexander Khizhnyak: I would like to describe to you the mood among farmers. When we received support, the 1,600 roubles, we felt uplifted. We knew that the government cared about us. We realised that the drought was not the most terrible thing.

Vladimir Putin: But it was, of course, a sad event.

Alexander Khizhnyak: A sad event, yes. But why am I saying that? If we had worked with the expert groups we might have come up with our own Russian solution and reached a point of breaking even. This is the main thing for us.

Vladimir Putin: I understand. You want to make a profit and to have end results that are not worse than those of your competitors in Europe. I understand.

Alexander Khizhnyak: Yes. You know, I have looked at the structure of direct costs per hectare in our farm. What did I find? Seeds account for a little over 30%, diesel fuel for 20%, depreciation for 14%, and fertiliser and other costs for another 14% or so, and only 5% is wages.

Vladimir Putin: We need mechanisms to keep down prices for fertiliser, and fuel and lubricants. Just introducing subsidies per hectare would not solve these problems. Suppose we decide to subsidise per hectare. Then our colleagues in other sectors may say: “Fine. They got more money so we will charge them more for fertiliser, fuel and lubricants…”

All the same, we need some mechanisms to keep prices down and maintain price parity.

Alexander Khizhnyak: Yes, and we must achieve profitability, profitability must be calculated.

Vladimir Putin: Right. Well, and in conclusion I would like to tell you this. Regarding the WTO: our negotiators have managed to get consent for the amount of subsidies we have never had before and will hardly be able to provide in the next couple of years, even with all our budget resources. On the whole, there is no reason to worry. Secondly, there are other forms of regulating and protecting our own market. I want to get it across to you and all other agricultural producers that we will not just let things ride out, and, whatever the case, we will seek to support and ensure competitiveness in our domestic market.

For next year we have earmarked 150 billion roubles to support agriculture. The figure is comparable to that of the crisis period. Of course, the drought had a seriously damaging effect on agriculture, especially the people who work hard tilling the land. Farming is a difficult and taxing job, let’s face it, and especially when there are such extreme weather conditions. Of course, it is very distressing and discouraging. But we are by your side, we understand your problems and we will help you.

Alexander Khizhnyak: Thank you. One reason I am saying all this is that we want young people to stay in agriculture.

Vladimir Putin: We have already seen some of them returning and staying. They have started some enterprises raising livestock and crops that are as good as any in Europe.

Alexander Khizhnyak: Yes, that is true. But we still want small farms to be the foundation for agriculture. These small farmsteads are where our rural population lives.

Vladimir Putin: That is true, and we will do it. Are there any more problems concerning your particular farm?

Alexander Khizhnyak: Not my farm. We have seeds, everything.

Vladimir Putin: Did you get help with the seeds?

Alexander Khizhnyak: We produce seeds ourselves. We produce them ourselves and build up stock. We have just one problem. Following your instructions we got insured. But today we are in a lawsuit with insurance companies.

Vladimir Putin: So that’s the way it is? We have to help you. I will make a point of talking with the governor. And I will urge my fellow cabinet members to pay more attention to insurance companies. By the way, if necessary, I mean in connection with the drought, we can think about helping the insurance companies in order not to push them to the wall. I am referring to those who honestly fulfil their commitments to their clients.

Alexander Khizhnyak: Yes. We paid 1.6 million roubles in insurance premiums to an insurance company. They promised to pay up by the end of December. But then they sent us a letter to tell us that they were taking the issue to a commercial court to terminate the insurance contract.

Vladimir Putin: Let us talk with the relevant supervisory authority. Leave me all the information, OK?

Alexander Khizhnyak: Very well.

Vladimir Putin: Good luck.

Alexander Khizhnyak: Thank you very much.

Yelena Libkind: Good afternoon.

Vladimir Putin: I’m all ears.

Yelena Libkind: My name is Yelena Libkind, and I have several children.

Vladimir Putin: How many?

Yelena Libkind: I have four. I am sticking with the government programme.

Vladimir Putin: Great.

Yelena Libkind: I am an associate professor at Orenburg State Agrarian University. And here is one of my daughters.

Girl: My name is Angelica and I am a student in fifth grade.

Vladimir Putin: I am listening to you.

Yelena Libkind: Lately, the media and representatives of various political parties have been expressing the controversial opinion that under Federal Law No. 83 educational institutions have the right to choose their status.

Vladimir Putin: That is correct.

Yelena Libkind: State-financed, public or independent.

Vladimir Putin: Yes.

Yelena Libkind: When the status changes…

Vladimir Putin: It has been the subject of much talk.

Yelena Libkind: Yes, and it concerns the school that my children attend too. If a school chooses to be an independent educational institution it will have to raise money itself.

Vladimir Putin: It won’t.

Yelena Libkind: In order to survive.

Vladimir Putin: No, excuse me for interrupting you. What is your question?

Yelena Libkind: The question is about something that worries me. I don’t know, maybe it is unclear because the press has been distorting this issue. But many parents, including myself, are apprehensive because they are afraid that schools will start charging fees for many educational services that are now free. In the end, free, high-quality education will become something we have to pay for. This scares parents. Is this true?

Vladimir Putin: I would like to explain this law. It does envisage three types of educational institutions: state-financed, public and independent, which you have mentioned.

A public institution is typically a small institution that is unable or unwilling to raise money. They will exist strictly in accordance with the cost estimate. You understand what a cost estimate is? That’s when the relevant municipal department dictates how much the school can spend and on what. If it provides some extra services or has saved some money – it may happen, for example, they may save money on electricity, capital repairs and maintenance costs: they have been given money for renovation and they have only spent part of that money on repairs of the same quality – then they are obliged to give that money back to the budget.

State-financed institutions have more financial discretion. Such an institution has greater leeway in disposing of the money made available to it.

Independent institutions have even greater freedom. Like state-financed institutions and public institutions, they receive the full budget allocations. The difference is that an independent institution has greater freedom in how it spends this money.

First, it can have an account not in the treasury, but in a bank, and can obtain loans and invest anything that it manages to save into development. And we want to create conditions under which the management of the institution would be interested in the associated savings and in trying to provide better conditions. It would not be looking to, say, keep the lights on from morning till night, when they are not needed, use water when it is not needed and spend excessive money on unnecessary repairs – it should spend money if necessary, of course – and not maintain excess staff. And the money saved it will be able to allocate to additional training, the employment of highly-qualified professionals, and in order to ensure wage increases for teachers. And where such an experiment is carried out, and it has been carried out in many regions of the Russian Federation, it would actually lead to the improvement of the process, including an increase in teachers' salaries.

An independent institution, for example, will be spared from having to buy every last pencil, according to Federal Law No. 94, at tenders and so on.

Yelena Liebkind: Without tenders even…

Vladimir Putin: They will be able to dispose of property more freely. In other words, the difference in all these institutions' modes of existence is only in the degree of freedom provided to the institution itself. There must be some supervisory public body for independent institutions, which have the maximum degree of freedom, so that they can dispose of this freedom wisely and properly. And this body is to be registered as a parent council, a committee of parents. And I’d like to repeat – there are good results where this has already been put into practice.

Yelena Liebkind: Thank you.

Vladimir Putin: Don't mention it.

Angelika: Mr Putin, this is a picture of our school. The fact is that we have two buildings, one of which is intended for a primary school. It is located on Brykina Ulitsa, but it is not suitable for use because it needs repairs.

Vladimir Putin: And now the most important issue…

Angelika: The school is overcrowded.

Vladimir Putin: All right, but what's the address?

Yelena Liebkind: The school is located at 6 Kirova Ulitsa, and the second building for the primary school is next door, also in the city centre.

Vladimir Putin: So we're talking about the second building? What's the address?

Yelena Liebkind: Brykina Ulitsa. A training and manufacturing complex was located there before, and then the facility was given to the school. Now the building is empty, the roof leaks and the building needs repairs.

Vladimir Putin: And no classes are held there…

Yelena Liebkind: No, and everybody is crowded into one building.

Vladimir Putin: But in theory, there should be classes here…

Yelena Liebkind: In order for the primary school to be in one building аnd the mid and high school in another.

Vladimir Putin: Alright, we'll sort it out.

Yelena Liebkind: Thank you.

Vladimir Putin: I'm listening.

Iskander Akhmerov: Hello, my name is Iskander Akhmerov. I am the executive director of the Anair dairy factory in the town of Saraktash…

Vladimir Putin: Have you brought samples?

Iskander Akhmerov: Samples… Incidentally, I was reproached for not bringing any.  I thought everything would be too hectic.

Vladimir Putin: Not at all. Sorry, but who is the owner of this company?

Iskander Akhmerov: My father. He is director general and I'm the executive director.

Vladimir Putin: In other words, it’s a family business?

Iskander Akhmerov: More than that, our third brother is working with us and the youngest brother is still growing up – he's already 13 years old.

Vladimir Putin: Great. And how old is the company?

Iskander Akhmerov: The company is already 15 years old. My father has been running it since 1993.

Vladimir Putin: And where do you get your raw materials?

Iskander Akhmerov: The raw materials are local, from Orenburg.

Vladimir Putin: Do you gather them from the farms?

Iskander Akhmerov: We gather them from all over the Orenburg Region.

Vladimir Putin: In other words, you already have stable suppliers?

Iskander Akhmerov: Yes, we try to maintain stable relationships with suppliers.

Vladimir Putin: How much do you pay for milk?

Iskander Akhmerov: 15.50 roubles including VAT.

Vladimir Putin: That's all right.

Iskander Akhmerov: We do our own deliveries. Moreover, farms are now in such a predicament that before we had to lend to them in the summer, in a difficult time for them, but now we are trying to also lend to them in the winter. And this is because of the drought.

Vladimir Putin: What is the average milk yield in your region?

Iskander Akhmerov: Milk yield for a forage cow?

Vladimir Putin: Yes.

Iskander Akhmerov: Mr Putin, I will not mislead you… I am an agricultural processor. I unfortunately...

Vladimir Putin: Well, anyway, it is not without interest for you. And did you think about starting your own farm? Or do you, on the contrary, see it more economically viable to maintain an existing farm in order to process raw materials?

Iskander Akhmerov: You know, sometimes the situation with raw materials is such that we have to think about diversifying our business.

Vladimir Putin: Yes.

Iskander Akhmerov: In other words, not only processing but also producing  raw milk. This is one side of it. On the other hand, when it comes right down to it – everyone should do his job. We do processing well. Will we excel at producing raw materials?

Vladimir Putin: No, what you said is absolutely consistent with economic logic. Better to focus on your business and allow other business to operate profitably and efficiently. And then it would be easier for you to build relationships with producers of raw materials.

Iskander Akhmerov: The fact is that the producer of raw materials, in this case, is a farmer, who, of course, builds long-term relationships, so we have also tried to treat him decently – lending to him and being responsive to prices. Producers of raw materials have all kinds of requests – from installing a cooler to paying in advance. It is very important.

Vladimir Putin: How hard is it to sell your product?

Iskander Akhmerov: Not hard. Totally easy.

Vladimir Putin: Excellent.

Iskander Akhmerov: Not hard, but…

Vladimir Putin: And where do you work, in Orenburg?

Iskander Akhmerov: I work in Orenburg.

Vladimir Putin: No, I mean do you sell in Orenburg?

Iskander Akhmerov: We sell in Orenburg, yes, most of what we produce.

Vladimir Putin: Do you have your own retail outlets?

Iskander Akhmerov: We do.

Vladimir Putin: So you sell through your own sales network?

Iskander Akhmerov: We have a distribution company, in other words, a trading company. In addition to being a producer, we have our own separate company for sales.

Vladimir Putin: Great.

Iskander Akhmerov: I'm here at the production site and other people with our company are involved in sales. There are no problems with sales there. There is a problem with producers providing enough raw milk...

Vladimir Putin: In other words?

Iskander Akhmerov: Speaking plainly, we do not have enough raw milk to...

Vladimir Putin: You don't have enough raw materials…

Iskander Akhmerov: Yes, in other words, the market is such that sales could be three to four times higher. If we had the raw materials, then we would be able to produce more.

Vladimir Putin: In other words, the region's task – including the development of livestock breeding…

Iskander Akhmerov: This is our main goal.

Vladimir Putin:  And cattle.

Iskander Akhmerov: Because we agricultural processors will take care of ourselves one way or another. Of course, we are at the forefront in terms of sales and communication with our customers, but we are suffering from a lack of raw materials.

Vladimir Putin: Have you tried buying in other regions? Or is it expensive? Transport costs?

Iskander Akhmerov: It’s unprofitable. The haul distance is 400 kilometres in one direction, and that's already too much... It's 800 km there and back.

Vladimir Putin: Here you could've had the idea to keep your own herd.

Iskander Akhmerov: We've had that idea in any case. There is one detail that holds us back, of course – that is the planning horizon, the return on investment. The fact that targeted loans are granted for three to five years. Accordingly, the agricultural enterprises, of course, need to extend the term of loan repayment to 10 years.

Vladimir Putin: Which bank do you use?

Iskander Akhmerov: Rosselkhozbank.

Vladimir Putin: And what is their loan interest rate?

Iskander Akhmerov: In 2010, the interest rate was 14%. Moreover, the region helped us subsidise the interest rate at the refinance rate.

Vladimir Putin: The region was able to help because of federal subsidies.

Iskander Akhmerov: Of course.

Vladimir Putin: How much did they subsidise?

Iskander Akhmerov: The refinance rate.

Vladimir Putin: Right.

Iskander Akhmerov: It's a competent business plan, so they did everything.

Vladimir Putin: What problems were there?

Iskander Akhmerov: The problem for agricultural processors is that we are a little uncompetitive in terms of the prime cost of the product.

Vladimir Putin: Why?

Iskander Akhmerov: In one regard: We have  very large penalties for shortfalls and excessive gas and electricity use. Here's an example. One cubic metre of gas costs 3.62 roubles, over the limit it is 8.66 roubles per cubic metre. Accordingly, this directly affects the cost of the product. But the main competition is...

Vladimir Putin: How much is it under the limit?

Iskander Akhmerov: Under the limit, it is 3.62 roubles, over the limit it is 8.66 roubles. In addition, the contracts are drafted in such a way that this figure varies constantly, constantly floats. The penalties for electricity and gas are the main issue that the community of agricultural processors and farms asked me to raise.

Vladimir Putin: How does it work in terms of electricity?

Iskander Akhmerov: In terms of electricity, the penalties are more lenient – there is about a 20% surcharge for excess consumption.

Vladimir Putin: That’s still a lot.

Iskander Akhmerov: This figure also floats. Today I picked up the contract again, and this figure is floating again, in other words, their purchase price, that is to say, is quite an unstable figure. We do not know, for example, in February what the cost of excess consumption will be – perhaps 20% or maybe 25%. Gas is the same.

Vladimir Putin: I want to tell you that, of course, this is not the first time we are discussing the topic, it's understandable. And recently I met with representatives of the Opora organisation. You are familiar with it, right?

Iskander Akhmerov: Of course.

Vladimir Putin: These are small and medium-sized businesses. They also raised this issue. It is still in limbo and cannot be solved. We will proceed as follows – electricity is regulated by the government. In part, we will proceed as follows: We will amend the current regulations so that small and medium-sized electricity consumers who consume, say, 2,000-3,000 per year ... And how much do you consume?

Iskander Akhmerov: Our monthly limit is 70,000 kilowatts.

Vladimir Putin: And this comes out to how much per year?

Iskander Akhmerov: A sizable amount – around 700,000–800,000 kilowatts.

Vladimir Putin: Yes, yes. Those who consume, say, 3,000 – as opposed to those who choose to consume 8,000-9,000, the big businesses, say the steel industry – as wholesale buyers, they, in effect, pay much less. The difference amounts to around 30%, maybe more.

Small consumers, who consume 2,000-3,000 per year, of course, pay more and the penalties are higher. It is clear why this happens. This is due to the fact that the power marketing companies, of course, are interested in seeing that there are no peaks, especially in the mornings, evenings, in order to use the night time...

Large companies also consume during the night because they have a permanent, continuous cycle; they work at night. So if we're talking about what we need to do to support small and medium-sized businesses – let's say that in a business such as yours, the existing order needs to be changed. And we will do so – we connect small consumers to the category that consumes 4,500-8,000 kilowatts per year.

This means that in any case there will not be a situation in which you go over the limit – which means you won't pay any penalties. This is the first thing.

Second, in general, I hope that the prices will be lower. We will also try to do something with Gazprom companies. Let's see what kind of an agreement we can make with them, but we will continue working in this general direction.

Iskander Akhmerov: Mr Putin, about the excess consumption…

Vladimir Putin: Bear with me, we will proceed as follows. I will have this resolution, a change to the procedure in the current resolution, signed at some point next week. But we will retroactively extend it from January 1 of this year, so that when you get the first payment order for the current year... And you will get it sometime around February 4-5, yes?

Iskander Akhmerov: Yes.

Vladimir Putin: …so that it will already have the new figures.

Iskander Akhmerov: This would be very good. This would be a big step  for small and medium-sized businesses.

Vladimir Putin: Then consider that we have agreed on this issue.

Iskander Akhmerov: All right.

Vladimir Putin: I wish you every success.

Iskander Akhmerov: Thank you. Good luck to you.

Vladimir Putin: Thank you.