2 march 2011

On a working trip to the Tambov Region, Prime Minister Vladimir Putin attends the 22nd Conference of the Russian Association of Farm Holdings and Agricultural Cooperatives

“In any situation and under any economic circumstances the government will do its best to create appropriate conditions for your productive labour and will be supporting you,” the prime minister said addressing Russian agricultural producers.

Vladimir Putin’s address:

Good afternoon, ladies and gentlemen. Let me first thank you for inviting me to address your representative forum. The Russian Association of Farm Holdings and Agricultural Cooperatives holds its meeting in the first days of spring – a very important and very tense period for rural communities and farmers. Spring planting will soon come into full swing.

I cannot help mentioning that we have had two very difficult years. We have had droughts for two years running – a rare thing. This natural disaster hit many Russian regions and put a strain on all farmers. Naturally, it is difficult to predict what weather conditions and yield we will have this year. But we all know that in the end – if not entirely, then in part – whatever happens will depend upon skill, resilience, the will to work, and the knowledge of how to do so. And our farmers have those qualities. In any situation and under any economic circumstances, the government will do its best to create appropriate conditions for your productive labour and will be there to support you.

As you know, five years ago we began implementing a national project in Russia’s agroindustrial sector and then used this project as the basis for a government programme to support the sector. We have invested over 440 billion roubles from the federal budget within this framework. In total, taking into account regional allocations, 700 billion roubles have been put to support agriculture over the past years. And experience has shown that we have been making the right decisions – these investments are now paying off.

Russian producers are retaking their position on our domestic food market. Despite the hard two-year drought in 2009 and 2010, Russia almost completely met its domestic demand for grain. Russian producers now account for more than 75% of the meat market, and poultry production has doubled over the past five years. If you recall, Russian meat producers accounted for a mere 64% of the domestic market in 2005. And we can certainly be proud of these results. You, the Russian farmers, have made a significant contribution to this success. Thank you very much. This has indeed been a very significant contribution to our collective efforts to ensure Russia’s economic growth, stability, and sustainable development.

The share of small businesses in Russia’s agroindustrial sector is steadily rising. We now have more than 200,000 farm holdings and over 100,000 individual farmers. The production rate in rural small businesses is growing between three and four times faster than the industry average – I noted this when preparing for this meeting. This is a very good sign and is further evidence of the sector’s bright prospects.

Farming enterprises and individual farmers account for almost a half of Russia’s agricultural production and this share is even larger for certain goods. In Russia’s three leading agricultural areas alone – the Krasnodar and Stavropol Territories and the Rostov Region – farmers harvest more than 5 million metric tons of grain. Our farmers produce 55% of Russia’s milk and 80% of its vegetables. This is not a trifling figure – it is a significant market share.

We have every reason to say that farming has established itself in Russia as a powerful economic and social entity, as a bulwark of the country, and as an important source of development for Russia and for reviving its rural communities and their rich traditions.

You are winning the respect of the public. Last year alone, more than 2,000 farmers were elected deputies to municipal government agencies. Your neighbours entrust you with the problems of their villages and districts because they see that you are people of action and that by succeeding in business, you are changing the world around you.

The main thing is that the attitudes and social expectations of people living in rural communities are improving despite many challenges. This means that we have to set new goals for ourselves and to strive for more. The first thing to do is to ensure that government support is equally accessible for everyone, from major agricultural companies to smaller farming enterprises and family farms. That is our general approach. I would like to emphasise that we view supporting small businesses and forming a diverse structure in agriculture as our top economic and social priority.

Government support should be accessible for small businesses in rural communities. We will be monitoring this issue, and I request that the association keep an eye on it, too. We certainly need a feedback mechanism like this, especially given that we are speaking about a wide range of measures and substantial government funds, including those set aside to carry out this year's spring planting.

For example, all agricultural producers will be able to buy fuels and lubricants at discount prices this year. In absolute terms, this will help farmers save up to 10 billion roubles. The measures we’ve taken helped significantly reduce prices on fuels and lubricants, including petroleum. On average, prices dropped by between 3% and 4.5% depending on the region, and some regions even reported a decrease of almost 5%. Winter fuel prices fell by 8% in several regions. However, we will discuss the sector’s problems later, and there are quite a few of them. Mineral fertilisers are a separate issue, and I will touch upon it later as well.

We have set aside an additional 2 billion roubles for the purchase of seeds and fertilisers, and we have also made certain efforts to stabilise the fertiliser market. I know – and I have mentioned it already – that despite our efforts, fertiliser prices keep growing. We are collecting this data. We will later discuss what can be done to address the problem. We have already made pertinent agreements with mineral fertiliser producers, and, incidentally, they are fulfilling their promises as to the price at which they sell. We need to look at what's going on with market intermediaries at the regional level.

The additional financial support provided by the state will only partially offset possible losses caused by the growth in mineral fertiliser prices, and we are aware of that. Unfortunately, these measures are not enough to help farmers purchase more fertiliser. At times like this, we have to admit that state support cannot always work to full effect, and the result is a situation that can satisfy neither you nor the government.

In this regard, I am asking Mr Viktor Zubkov and another deputy, Mr Igor Sechin, who oversees this industry, to analyse the situation in the fertiliser market and work out the necessary measures to curb price growth, as well as ensure that they are implemented to the letter. Clearly, this can only be done in close cooperation with regional and municipal authorities.

I’d also like to remind you that we have allocated five billion roubles to agricultural holdings that have retained large cattle stocks. I would like to underscore that this support also extends to farmers.

I am asking the Ministry of Agriculture to pay special attention to the needs of farmers and small businesses while executing the current state programme for agriculture and preparing the next programme, which will last from 2013 to 2017.

I believe that it is necessary to start providing support to farms immediately. This can be done through subsidising the purchase of young breeding stocks and seed. And we can also help farmers obtain seed and maintain perennial planting. The Ministry of Agriculture has the necessary funds.

I’d also like everyone to attend to the problems of small farms. Moreover, I believe that we should begin by addressing these issues. Such support measures have already been considered, but they applied only to orchards and vineyards of over 50 hectares, so only large farms could benefit from them. Farm size qualifications should be eliminated as soon as possible.

There is no need to tell you how important the current insurance system is for agriculture. This year we have budgeted five billion roubles for crop insurance, which is double what we planned for last year. The government and the State Duma are improving insurance legislation in agriculture. Our main goal is to make insurance affordable and accessible, and, above all, to guarantee farmers insurance coverage in case crops are damaged. And, to put it bluntly, we must protect small farmers from insurance scams and unscrupulous agents. According to the information the government is receiving, several insurance companies have neglected their responsibilities, refusing to pay damages to those affected by the recent drought under various pretexts. They’re trying to fudge the issue by referring people from one authority to another. That’s what the farmers say. This is the case in the Orenburg Region, and here, in the Tambov Region, too. I am again asking Mr Zubkov to sort out each such complaint. I will give the same order to the Minister of Finance and the insurance supervision agency. If necessary, we will get the police and prosecutors involved. I think you’ve heard that several insurance companies have had their licenses revoked. Nobody needs insurance businesses that exploit government support without fulfilling their responsibilities. As I said, six companies have had their licenses revoked.

Moving on to our policy regarding the grain market, as you know, we made a decision to distribute all fodder from the intervention fund to the regions that were hit by the drought and applied for support. The price of this grain will be two times lower than the market price. We purchased it at anywhere between 4,500 and 5,000 roubles, whereas it now costs anywhere between 8,000 and 8,500 roubles. We will sell it at the price at which we purchased it, with a small mark-up. We made this decision because, clearly, we had no intention of exploiting fluctuations on the market.

The grain intervention fund was specifically created to assist farmers should difficult conditions arise, although many argued that the grain should be distributed according to market exchange. But I proceeded from the assumption that those who need this grain would not be able to afford it after the drought. That’s the main issue here. There was a risk that traders would purchase the grain at high prices and keep it. This is why I agreed with regional leaders – it was their position – to use the aforementioned method of distribution. It should be transparent and clear, and the farmers that need this grain must be the ones who receive it.

I’d like to return to the issue of getting feedback from farmers. I personally would appreciate it if you helped me to do so. We need to make sure that people receive the grain at the price we set, which is twice lower than the market price. We made this decision with an understanding that the primary mission of the government is to maintain stability in agriculture and ensure that food products are affordable.

Again, I’d like to address regional leaders: you are personally responsible for the distribution of grain, and it is highly important that agricultural producers, primarily cattle farms, receive this money. As I said, the whole distribution process should be absolutely transparent. There's no room for gray areas. This money must not be distributed to farms affiliated with local authorities. I hope that will be the case.

And, of course, measures of financial support should also be undertaken as effectively as possible. This year the federal government will allocate 150 billion roubles for the development of agro-industrial complex, a part of which will go toward personnel training programmes. In addition, the Russian Agricultural Bank will provide over 100 billion roubles and Sberbank another 50 billion roubles in loans.

I would like banks with state involvement to understand that it is necessary to interact directly with farmers, including small and medium-sized farms and not only large agricultural enterprises. Of course, it’s easier to issue one big loan than a hundred small ones. But farmers have proved to be reliable borrowers, and they understand what personal responsibility means. They usually use loans and the funds provided through state support programmes more effectively than other businesses – I have already cited the figures in order to illustrate production growth rates in the industry. Second, when addressing problems of state importance, state-run banks should be guided both by market rules and by the interests of the state and the people who live in rural areas, growing crops and raising children.  This is an issue of state importance.

Last year, farm owners, including non-profit farms, received 177,000 loans worth 50 billion roubles. The state is subsidising interest, and I should note that allocations for these purposes have grown by 150% over the past five years, from 2.4 billion to 6.1 billion roubles. The federal government subsidises 95% of loans, while regions subsidise 5%.

The Russian Agricultural Bank will significantly simplify the procedure for taking out loans of up to 15 million roubles for small farms this year alone. I’d like to emphasise that offering or denying such loans should take less than five days. I believe that a recommendation from the local Association of Farm Holdings and Agricultural Cooperatives should be enough to elicit a positive decision on issuing a loan to a particular farm. This organisation has proved to be very reliable. I don’t see any problems here. If necessary, the federal government can form a partnership with it. The Russian Agricultural Bank will open a new credit line for owners of family farms and non-profit farms so that they can expand their holdings.

In turn, the regions should also create the necessary conditions to develop lending, in particular through guarantees and collateral funds. Such funds have been established now in 77 regions. Their aggregate capital is 25 billion roubles. It’s not yet enough, but this is just the beginning.

I’d like to use this occasion to address United Russia members in legislatures: when considering budget drafts, you should keep in mind that support for farmers and small businesses in rural areas is one of our main budget priorities. I expect that you will advocate farmers’ interests. Incidentally, United Russia receives more votes in rural areas than anywhere else. The party should be aware of this and bear all that responsibility.

Ladies and gentlemen, this country will benefit from the development of the farming sector and from the success of those who want to improve their standard of living in the process. Cultivating land should become a source of pride and of prosperity. To my mind, the issue of land is the most important thing here. It is a recurrent issue throughout Russia’s age-old history. Today we can finally resolve it and fix the ownership of land to those who cultivate it. Those who own their land enjoy a feeling of stability and also feel the responsibility to carefully tend to it for future generations.

The property laws on agricultural land were amended late last year. We simplified the procedure for registering plot boundaries, set tougher deadlines on all registration procedures, and obliged municipal authorities to provide people with full assistance in acquiring and certifying their property rights. Currently, the boundaries of only 20% of plots are registered, so we still have a lot of work to do. More than 9 million people are expected to register their property rights. In fact, this is a large-scale land reform, and I hope that your association will be playing an active role.

Almost 24 million hectares of agricultural land are still classified as non-distributed land shares. We need to put this land into circulation and hand it over to farmers. Agricultural producers and farmers who effectively cultivate these plots will be able to purchase them through a simplified procedure without bid inquiries. We have also reduced the price from 20% to 15% of the plot’s registered value. I would like to emphasise that I’m referring to the land registry price rather than the market price, which is much higher.

I would also like to point out that regional and municipal authorities should provide vacant agricultural land to those who want to engage in agricultural production and become farmers on a priority basis. I request that our representatives and supporters in the local authorities be guided by this approach. We cannot allow profiteers and resellers to get ahold of these plots in order to resell them and cash in simply because the land was undervalued on the market. This land should go to those who will cultivate it, for whom agriculture is a livelihood and a source of prosperity.

I have already mentioned the responsibility of the land owner. Agricultural lands should not be collecting dust, and they must be used for their designated purpose. Otherwise, the owner should face strict sanctions. I believe that this is fully justified. Those who intend to cultivate the land need to be supported, and excessive financial and bureaucratic barriers should be lifted.

We will see what we can do, and I believe that we will consider using federal budget funds to reimburse farmers for about 50% of the cost of registering their ownership. I call on everyone to follow our example – and I will later discuss it  with governors and heads of major municipalities. We need to work out a common approach, and regional authorities should cover the remaining half so that people get fully reimbursed for these costs.

I met with representatives of small and medium-sized businesses, including agricultural businesses, last December. Following our talks, certain instructions on the support of agricultural producers were formulated. We were looking into the possibility of launching a full-fledged programme to support beginning farmers.

First, a farmer should receive a special grant to set up a farm, including money for purchasing land, animals, equipment, seed, and so on. This can be done in two ways. The first is through the regulation of the labour market by the Ministry of Healthcare and Social Development. This ministry provides a grant of 58,000 roubles to new farmers, but they first have to register with the placement service. Or this can be done by the Ministry of Economic Development within the general support framework for small and medium-sized businesses. This assistance needs to be actually distributed. Grants of between 150,000 and 300,000 roubles are available.

I believe that it would be appropriate to hand all these mechanisms over to the Ministry of Agriculture, in order to formulate unified regulations and make everyone eligible for these grants regardless of their registration with the placement service.

Second, a new farmer should be able to take out a long-term investment loan. We will subsidise the interest rate at the federal level and regional authorities will be responsible for underwriting or guaranteeing the loan. To a certain extent, this programme is already working, and we have set aside about 6 billion roubles for it this year. We will need to extend this programme next year as well.

Third, we will be supporting regions that help (agricultural producers) repay initial  leasing fees for agricultural equipment and cattle. We will need to extend this programme and come to an agreement with regional authorities on how to organise this work.

Fourth, the owner of a new farm should receive a grant for building his household – sort of a settling-in allowance. This is a sensitive issue because it will require major financing. We will need to look into this option together with the Ministry of Economic Development, the Ministry of Finance, and regional authorities. We need to think it over, but I’m convinced it would be a serious assistance measure.

This programme can draw from our experience in developing family diary farms. As you know, more than 300 such farms have been set up across Russia. They are beginning to cooperate with milk processing companies, but the issue of selling their products is still unresolved. This problem requires special attention of related ministries and local authorities.

Having become land owners, the family builds its own business and controls its own income, creating a firm foundation for the future of their children, as I’ve already said.

We’ve decided to extend the programme for family farms until 2020 and include new measures in it. We will now not only build dairy farms but will also provide comfortable housing for the farmers, using the agro-leasing system. We helped build the farms and allowed agro-leasing to make its contribution. Now we’ll extend their opportunities for building housing. I believe that the government should help all new farmers get their own decent housing through the mortgage mechanism of leasing, as I’ve already said. To that end, the Ministry of Agriculture should formulate relevant proposals with the help of Russian Agricultural Bank and Rosagrolizing and submit them to the government. We will discuss and adopt them. And, of course, I’m urging your association and its regional bodies to assist those who are just starting their businesses, share your experience with them, help them develop more cooperation with the organisation, and resolve emerging problems – in brief, to become patrons to all those who have recently built farms or are going to build them.

To be truly competitive, our agro-industrial sector needs high-tech equipment. Today old tractors and combines that have exhausted their service life account for 70%-80% of those in use. According to available estimates, farmers are spending billions of roubles on repairs instead of using these funds to develop their farms. The technical fleet must be reequipped and the scrap must be disposed, all the more so since our mechanical engineers are starting to produce new models and foreign firms are also arriving. Incidentally, we could think about a special programme here, as we have in car making, to encourage the production of modern equipment on our territory.

We are improving different mechanisms, reducing costs, and getting rid of unnecessary intermediaries. Today, half of all leasing agreements have been concluded directly with farms. I know that many regions allocate funds to compensate for some leasing costs, and that's the right thing to do. We will, of course, support these efforts.

Only yesterday we discussed a question that was raised by the Association of Farm Holdings and Agricultural Cooperatives, other agricultural producers, and big farms. The Rosagrolizing system has now accumulated more than 5,500 units of modern equipment. Of course, after two hard years of draught, not all farms have the money for leasing or buying equipment. Therefore, yesterday we decided to subsidise Rosagrolizing so that it could sell or lease its equipment to agricultural producers at half the price. Considering budget restrictions this year, this is not an easy task for us – we will have to spend an additional four billion roubles, approximately. But considering the positive growth rates of our economy, budget revenues, and, let me be frank, the tensions on the food market, we are proceeding from the need to guarantee [favourable] conditions for the spring sowing campaign and help agricultural producers acquire new, modern equipment. I hope very much that this will help farmers gather a good harvest next year and replenish the food market.

Furthermore, our goal is to let the farmers do their business without unnecessary barriers and obstacles and to spare them any unjustified or burdensome administrative, financial, and organisational costs. Everything is important in this respect. We should consider the specifics of agricultural production in agreements on the supply of electricity, heat, and water.  We have already instructed the Ministry of Agriculture, the Ministry of Energy, and the Ministry of Regional Development to study these issues in more detail.

For small businesses, including agriculture, we are rearranging the payment system on electricity in order to reduce prices for this category of consumers. Moreover, we are eliminating additional surcharges on under- and over-consumption by changing the basic terms of measuring use. And I agree with you: during my numerous meetings with farmers – in Moscow, the regions, and while visiting representatives of small business in general – all of you have raised the issue of small consumers paying higher rates than larger enterprises. It's not right. And for that reason, we are rearranging the payment system and leveling it out against average consumption, so that, I hope, small and medium businesses will feel a significant difference. There will be no more price gaps, or at the very least, we shall do everything in our power to eliminate them.

We will continue to revise our legislation so as to remove bureaucratic barriers that unscrupulous people are taking advantage of. I’d like to inform you that last year, agricultural enterprises spent a total of four billion roubles on various permits and certifications. It is necessary to expedite the revision of the legislation in order to significantly reduce the number of documents a farmer needs and the time it takes to obtain them, while increasing the responsibility of the agricultural producers themselves. Another important issue is the effectiveness of oversight. It should not be a punitive instrument but a shield protecting agricultural enterprises against veterinary and other risks.

As production grows, the issue of small and medium-sized businesses’ involvement in distribution and marketing acquires particular importance. Simply put, farmers should be able to sell their products at a fair price. We will not tolerate a situation in which retailers make big profits by putting high mark-ups on the products they buy cheaply from farmers.

The Law on Trade has already limited the share of retail chains to 25%. We worked out this legislation specifically to avoid monopolisation or the possibility of collusion between retailers. The law prohibits bonuses and incentives that a distributor may have to pay a retailer. It also sets the payment period on perishable products at 10 days. I’m sure you are aware of this and are taking advantage of it.

We have done our best to simplify the distribution of Russian products to Russian retailers. But this legislation alone is not enough. We should do everything in our power to help farmers and distributors capitalise on their cooperation, encouraging further development of the production, processing, and distribution infrastructure. I am asking regions and municipalities to help farmers with the organisation of local farmers' markets. I’d like to stress that the entire distribution chain from producer to consumer must be as short as possible. Meat, milk, and vegetables must be sold at affordable prices, without resellers marking them up. Everyone has a stake in this, except for the resellers, of course.

One of the main goals of state policy in agriculture is to create clear rules for the industry. All agricultural enterprises, including small farms, should be provided with the necessary information on long-term trends of pricing and demand on the market so as to be able to develop their business strategies and plans for taking out loans or leasing property.

In this regard, I’d like to remind the Ministry of Agriculture that it should expedite the development of its plan for monitoring and projecting the trends of the agricultural market and submit it to the government as soon as possible. We should also improve the production culture and competence of farmers, helping them learn new skills and adopt new technologies.

The Russian Academy of Agriculture and other institutions under the Ministry of Agriculture should become centres of innovation, developing new technologies in veterinary medicine, genetic selection, crop capacity, and land fertility and putting them into mass use. Agricultural education should be oriented towards farmers’ demands. It is necessary to develop programmes for advanced training, extracurricular education, and long-distance learning. Such programmes are being developed across the country in almost every sector, and there is a high demand for them in agriculture, particularly in small and medium-sized business.

Everyone who wishes to work in agriculture should have an opportunity to receive practical knowledge in economics, management, and agronomics. In turn, the government is committed to bolstering agricultural consulting centres, for which we will allocate half a billion roubles next year. Many are already operating. Such centres were mostly funded by the regions, and last year they received a total of 501 million roubles. We will continue these programmes and provide additional funds from the federal budget.

Ladies and gentlemen, we all know how many people live in rural areas – almost 40 million, over a quarter of the population of Russia. We must improve the quality of life in rural areas, making them more attractive to young people who could start businesses here and create strong families. We have made a decision to extend the federally targeted programme for the social development of rural areas to 2013. The government is currently restoring the funding of this programme.

Over the past eight years, over 217,000 young specialists and young families have benefited from our housing programmes. Many young professionals based in rural areas have been able to improve their families’ living conditions, with more than 14 million square metres of residential space being provided for their housing needs.

An additional 2.5 million square metres will become available in 2011-2013.

Moreover, I believe that we should allow farmers to build their houses on farmlands. This may sound strange to city dwellers or people living in the suburbs, but to someone who lives and works in the countryside, there’s nothing wrong with it. We’re now working on passing the relevant legislation. Hopefully, it will provide an impetus to the growth of the farmstead lifestyle in rural Russia.

To be able to ensure the harmonious and balanced development of all of this country’s vast territory, we need to support small rural communities.

Regions  and  municipalities  should  provide  farmsteads and  small  villages  with  local infrastructure, laying  dirt  roads  and  building  small-scale  electric generators  and  water supply  facilities.  All  the  more  so  as such  projects  do  not  require  much  investment.

We’re also  determined to go on with our  programmes  for  further  expanding  the  gas supply  network,  and we  hope  to  bring  the  share  of  rural  households  connected to  this  network up  to  60%  before  the  end  of  2014.

In the period between 2005 and 2010, more than 2,000 villages were connected to the gas supply network. About a half of this country’s rural communities now have access to natural gas, and in some regions, this problem is already fully resolved. In 2005 to 2010, Gazprom alone invested as much as 81.8 billion roubles [in related projects].

The Ministry of Health and Social Development, the Ministry of Education and Science, and the Ministry of Regional Development should reconsider all issues related to public education and healthcare in the countryside.

Regrettably, mortality among rural populations still greatly exceeds the rate in urban areas.

We should be aware of our achievements in demography, improving the standards of living, quality of life, and life expectancy. But it’s equally important to openly discuss the problems that we still face; otherwise we won’t be able to resolve them. One such problem is the mortality rate in rural areas.

We need to put our regional hospitals and primary healthcare centres in order, providing them with equipment for diagnostics and treatment as well as means of transport, such as ambulances.

As you know, we’re about to launch a large-scale programme to modernise the healthcare sector nationwide, in particular in regions and municipalities. Each of the regional healthcare modernisation programmes should include sections devoted to improving healthcare and medical services in rural areas.

Advancing public education is another key priority. Children in rural areas should have access to quality education and modern learning tools on a par with their peers in cities and towns. The national programme for education has played a significant role in making that happen. Now almost all of Russia’s rural schools are connected to the internet. More than 1,000 sets of teacher's aids in subjects such as physics, chemistry, biology, and geography have been sent to schools located in out-of-the-way areas.

As for small rural schools, we’ll continue to support those that belong to communities with an objective need. At the same time, we’ll carry on our efforts to provide rural schools with buses.

In conversations with governors, I usually point out that large interregional educational centres can provide a better education [than small rural schools]. This is obvious, since rural schools often have one teacher for several subjects, which may be disparate as math, biology, and physical fitness. We should give those teachers their due, but they won’t be able to achieve a quality performance under such conditions, however hard they try.

Before getting down to creating interregional, high-quality educational centres, however, we’ll have to build road infrastructure and provide enough school buses to ensure the safety of future students.

Under our current education programme, almost 4,000 rural schools have been provided with buses thus far. Last year, we allocated more than 1 billion roubles in subsidies to the regions to meet their needs.

We intend to support rural teachers in every possible way, encouraging fresh talent to work in the countryside and restoring the prestige of the rural school teacher as a professional.

I would like you to know that we’ve selected some 750 promising teacher training college graduates from among applicants willing to work in far-away rural areas. Each of them will receive financial support from the government, amounting to as much as half a million roubles over two years, or 250,000 roubles per year. Regional authorities are to provide them with accommodations.  We are committed to carrying this programme forward.

One other point I’d like to make is that teachers who live and work in rural areas now have the right to apply for reimbursements on their utility bills. A resolution to the effect was adopted late last year.

And, of course, we should do more to promote culture and sport in the countryside and to support rural libraries.

Ladies and gentlemen, in conclusion, I’d like to reiterate that the support of agriculture will remain one of our absolute priorities.

“The government has a clear goal. The government seeks to expand land ownership among peasants; it wants to see peasants prosper, as prosperity is a prerequisite for education and true freedom.” This is what Pyotr Stolypin, an outstanding Russian statesman, said over a hundred years ago. 

Stolypin believed that land is the guarantor of our strength and epitomises Russia itself. I believe that this invaluable resource is now in safe hands:  yours.

Thank you for your attention.

Vladimir Plotnikov: Mr Putin, delegates, ladies and gentlemen, we have attended a historical meeting today. Mr Putin, the goals you set and the orders you gave are a great encouragement to farmers. We are doing our best to support and develop  agriculture. But this will also help us to strengthen the Russian Federation as a whole, and we are very grateful to you for that. Let us hear from Alina Gavrichenkova, a farmer from the Smolensk Region. Mrs Gavrichenkova, please, go ahead.

Alina Gavrichenkova: Mr Putin, colleagues, I am happy to welcome you here at the 22nd farmers’ congress. Thank you, Mr Putin, for making time to attend our forum. I think everyone present here wanted you to come, and finally it has happened.

I have a cold, so it’s a little difficult for me to speak. In your speech you mentioned what we have long been waiting for from our government, from our ministry, from everyone we have worked with over the past two days. You voiced our goals and brought us the hope and the belief to go on living, working and developing.

As I understood from your speech, today farmers are equal participants in agricultural policy. The moment has come at last. Thank you once again for being with us today. We see that when you are with us, we work and feel much better in every sense of the word.

You see, farmers are independent people who live and work on their land. So I am happy that today the state has turned to us, to farmers, to the private sector and will play a great role in it, greater than ever, as we have heard at today’s meeting.

I came from the Smolensk Region, and I attend almost every congress. I have been a farmer since 1991. The Smolensk Region is smaller in area than Kuban, Voronezh and other regions. I have a family farm, a total of 57 ha [140.7 acres]. We are primarily engaged in growing potatoes, and we had at least 29–30 tonnes per hectare over the last five years. Smolensk Region farmers engaged in milk production have an annual average milk yield of up to 9,000 litres per cow.  I think this level is not worse than abroad.

Vladimir Putin: It is better. Mrs Gavrichenkova, was it you who pushed up prices for potatoes?

Alina Gavrichenkova: No, prices for potatoes… I will tell you about it a bit later.

Vladimir Putin: OK.

Alina Gavrichenkova: We have a small family farm: my husband and I, and our two sons work there. Of course, all of us living in the countryside eat our own products: bread, milk and meat. And we do not worry about our children, who live in the village and are born healthy and strong. As you see, we, villagers and farmers, are not indifferent people. We see how the city lives, what its people eat. Many products are imported today, so… We, the farmers, can produce more. Today we produce as much as we can sell. Just one example: in the Smolensk Region over the past three years farmers have been meeting the needs of public sector organisations almost 100%: we supply vegetables to the department of education, the department of social development, hospitals, schools, orphanages and even prisons. We have only been able to do this because we have organised our own cooperatives. Cooperatives are the answer. We put together a large batch of products. Our prices are much lower and the quality is better. That is why we win tenders, quotas and electronic trades. But today, though we have cooperatives, we would like them to be raised to a somewhat higher level. We want to break into retail networks and work with shops. But we don’t have modern warehouses, refrigerators, and don’t have equipment for packing our products. We would like, in that respect, to lift cooperatives to a higher level and to enjoy government support. Cooperatives can only make a significant step forward if they have government support.

From this high rostrum I would like to thank the administration of the Smolensk Region because it has done a great deal for agriculture in the last three years. For 2011 the region will allocate 1.5 billion roubles for agriculture, including private farmers (it is a small region). That will make a great difference to us. This has never happened before. Since you are here today, Mr Putin, I would like to ask you to reduce imports so that we have a chance to sell our products to shops everywhere – please support our cooperatives. The principle is simple: the government should match every rouble invested by the farmers with a rouble of its own. That is all it takes. Everything will start working.

Cooperatives exist all over the world; we have not reinvented the wheel. I think that cooperation is the answer to developing private farming. That is where quality produce will come from, we will get rid of the middlemen (who work through us) and our products will be much cheaper and of higher quality.

Concerning what you, Mr Putin, have just said about potatoes. In 2010, potato prices never rose above 15 roubles. Until the beginning of this year, we supplied all the public sector customers at 17 roubles. Today the price of potatoes in the region (we deliver to all public sector customers) is 24 roubles.  That answers the question you asked.

Thank you very much for being with us at our congress. I would like to take this opportunity and invite you to the Smolensk Region. Come and see how we live and work. I think you will appreciate true Russian hospitality. And so that you know where you will be going, we recently put out the book “Smolensk Farmers.” Of course, it does not say enough about our people, but still I would like to give you this book.

Vladimir Putin: Thank you very much. Actually you raised several very important issues. One is imports. We have one of the most open markets in the world, markets in the broad sense of the word. In large cities, in Moscow, until recently 70% of food products were imported. Up to70%! Of course something has to be done about this. It doesn’t mean that we should shut everything down and demolish everything, but we must work to create the right conditions. Work consistently to create conditions to enable our domestic goods to reach customers. In some agricultural sectors we have made significant progress in that direction.

I hardly need to remind you again that we have made a great leap in poultry meat production. I can’t think of any other country that has had such an upsurge recently.

Just four of five years ago we annually bought 1.4-1.5 million tonnes of poultry meat from the United States. Last year we gave them a quota of 600,000 tonnes, but we actually imported about 400,000 tonnes, am I right, Mr Zubkov? I see, so we imported just 250,000 tonnes. See the difference? Only recently we imported 1.6 million and last year we imported 250,000. The rest of the needs were met domestically.

If we act in concert, are mindful of the consumer interests, proceed carefully, squeeze imports in proportion to the growth potential of our domestic producer, then it does not have a negative impact on consumer prices in large cities and helps our agricultural production. We should proceed in a similar way in other sectors. We will do it even though we are negotiating to join the WTO.

I was in Brussels recently and you may have noticed that we had very frank conversations with our European colleagues. They supply ten times more farm produce to our market than we supply to theirs. They have a lot of non-tariff restrictions and other technical limitations. They are very good at inventing such things and we have a lot to learn from them.

But I have to tell you that in the interests of the Russian people we will have to strike a balance between the interests of the sector and the interests of the consumers so as to contain price growth, so that our prices be economically justified, enable the sector to develop, to make a profit but without detriment to the consumers.

As for middlemen, in a market economy middlemen are not by and large a harmful phenomenon, provided they act within certain limits and do not profit at the expense of producers and consumers. That can be done. That is the task of the Ministry of Economic Development and the Agriculture Ministry. But we are committed to moving in that direction together with you. Why together with you? Because we coordinate things. Vladimir Plotnikov knows that. We do not meet as often as we would like to, but we are permanently in touch. We will continue to be in touch. Thank you.

Vladimir Putin answers questions from congress participants

Question: Ladies and gentlemen,  

I am Vitaly Kozhevatkin from the Samara Regional Farmers’ Association. Mr Prime Minister, there is a serious personnel problem in the countryside, especially with the appearance of high-tech machinery and seed imports. Unlike major agricultural producers, medium-sized farms cannot afford to hire an agronomist, a veterinarian, a livestock expert, a legal adviser and an accountant all at once. We received expert assistance from regional agricultural consulting centres. Mr Putin, does the government intend to further promote agricultural personnel training with an emphasis on private farmers’ needs? Thank you.

Vladimir Putin: Mr Kozhevatkin, as I said in my address, the regions allocated about 501 million [roubles] for this purpose. There is no federal funding. I mean to say that we support these activities through government allocations to which an overwhelming majority of regions are entitled. We attach critical importance to this work – you have just explained its significance. So I think that relevant universities under the Ministry of Agriculture and other universities should pay attention to it.

As for regional consulting centres, we have earmarked half a billion roubles from the federal budget for them, and we will continue funding them.

Question: Mr Putin, my name is Vladimir Mimoglyadov. I am a farmer from the Ryazan Region. I began with 60 hectares in 1997, and now I am working 600 hectares. You said in your address how priorities should be arranged. I want to repeat once again that we farmers also do business and want to make a profit, above all. As you said, you want agriculture to remain profitable despite electricity, gas and machine fuel price hikes, which today’s speakers mentioned. We farmers are hardly able to make ends meet, while we should be making a profit.

I would like to ask another question. Some Russian regions offer farmers generous aid. Ryazan is not one of them. Tatarstan made a spectacular example of small business funding at the expanded board meeting. A farmer can have half the price of a new cow, tractor or barn reimbursed from the regional budget there.  We wish we lived in a region whose authorities pay such attention to farmers. In the places where there is no aid for farmers, we are crushed by competition, and even if the remedy eventually comes, the disease might be past treatment.

Many projects would do with a co-funding programme. Some clauses in our [regional] budget envisage federal co-funding, and there is no chance of federal assistance to businesses which these clauses do not concern. It would be good to set up a large federal fund so that we also had a chance of such support in our region. Thank you very much.

Vladimir Putin: I would like to say a few words about electricity payments. I said everything I had to say about the energy industry, and I hope I was explicit enough and there is nothing to add. Just before I entered this room, I had a short meeting with the government ministers present here. Regrettably, the [energy] minister could not tell me whether a resolution on energy had been signed or will be signed within a day or two. The document concerns electricity consumption in terms of hours, and puts an end to fines for shortfalls and overuse. The problem will be cancelled when the procedure changes.

As for natural gas, Gazprom has made a decision already. It concerns the company’s “Take or Pay” arrangement for all customers. It might be reasonable for exports but I don’t think it should work in the domestic market. The company has already changed payment arrangements for excessive consumption to cancel 10% fines, if I am not mistaken. Fines of 20% for under-consumption have also been abolished. I think the arrangement should be liberalised. I’ll talk to them when I return to Moscow. The corridor should be widened at least or, better yet, all restrictions should be lifted. At any rate, the corridor must be extended. But then, we should see energy people’s perspective, too – they have their targets to meet for production and sales. This is natural: every industry has its interests and laws governing its work. However, we will certainly try to persuade Gazprom as well.

As for the overall growth of energy prices, it must not exceed 15% on average nationwide. Please notice this figure – I took stock of the situation myself just a week ago. I know some regions even have  30% increases, while others make do with 7% to 9%. Still, we will not put up with 30% hikes, if we’re talking about a 15% average. Such snowballing prices cannot be justified even by the need for new grids and similar things. Everything should be done gradually. We don’t need fits and starts. We will try to influence the regions in this respect as we have done before. This is my firm promise.

As for regional support, we can only regret that different regions pay different levels of attention to particular industries, agriculture being no exception. You mentioned Tatarstan as an example. Tatarstan, Bashkortostan and many other regions along the Volga are traditionally attentive to agriculture and have established a highly efficient regional system to support it. It does work. However, last summer’s drought hit these regions very hard. I don’t remember what the harvest was like there. Does anyone here know the figures? At any rate, it was less than a third of their average yields, if I am not mistaken. The weather was really hard on them.

As for Ryazan… You are from Ryazan, aren’t you?

Response: Yes.

Vladimir Putin: We will check. I’ll go to Ryazan for this purpose, among others, and see for myself how these programmes are working there.

Response: So we will have something up our sleeves to please our governor when we return from the congress.

Vladimir Putin: The Ryazan governor is an experienced leader. We’ll have to know the administration’s attitude to this.

Alexei Sedov: Alexei Sedov, family farm director. Mr Putin, you have already mentioned last summer’s drought, but I would like to discuss it again. Many farms were damaged or burned down, in 12 regions in 2009 and in 43 regions in 2010. The support policies introduced by the Russian government have saved us from inevitable bankruptcy, even saved our lives. Please accept our sincere gratitude, from farmers in 43 regions.

Vladimir Putin: You are welcome.

Alexei Sedov: We have survived, Mr Putin, but we aren’t ready for spring sowing this year. Does the government plan to provide more support to the farmers hit by the fires in 43 regions? Thank you.

Vladimir Putin: Have you taken advantage of all the opportunities the government provided? Have your loans been rescheduled?

Alexei Sedov: Yes, they have.

Vladimir Putin: Right. So, if your loans have been rescheduled, you are entitled now to borrow more for the sowing season with your potential harvest as security.

Alexei Sedov: Yes, Mr Putin. But if the government could only provide us with some more financing, only to buy seeds… Seeds are the most painful issue. Also, last year, we sowed far less winter crops, which shifted the load toward spring. It would be a great help to us if you could…

Vladimir Putin: We have decided to allocate an additional 1 billion roubles for this.

Alexei Sedov: Thank you for that. But the problem hasn’t been resolved.

Vladimir Putin: But we are allocating a billion roubles for seeds. This decision has already been made. But we could look at the problem again if you want. Let us discuss it with the Agriculture Ministry again. The minister is here; we could sit down together and analyse your figures to see if more support is necessary. We could consider additional support.

Alexei Sedov: Thank you.

Vladimir Putin: As for equipment, I have just explained our policy. We decided yesterday to provide 3.7 billion roubles to agricultural leasing companies. These subsidies will help you buy all equipment at 50% discount. I hope leasing companies will also benefit from this, as you could buy newer equipment after selling this machinery. The policy will also benefit machinery and equipment producers.

Sergei Bocharov: Mr Putin, my name is Sergei Bocharov, and I’m a farmer. I started with a 200-hectare field; now I have 5,000 hectares and employ 70 fulltime staff.

My question is about insurance. You have talked about insurance problems in your opening remarks. When farmers who lost their crops to wildfires applied for their insurance benefits, some insurers tried to avoid paying them under various pretexts. But this means that we farmers have simply wasted out hard-earned money paying the insurance premiums. So my question is how the government plans to improve the agricultural insurance market. Has any progress been made on the broadly discussed agricultural insurance law? When will it be adopted? Thank you.

Vladimir Putin: Indeed, in some cases insurance companies have been trying to evade paying benefits. This is very sad because hedging your risks through buying insurance is the best and most civilised way to handle such problems. So when we find that it isn’t working properly, it means the whole system is flawed in the first place. A new law needs to be adopted. The State Duma is working on it; it has been adopted in the first reading. I fully expect it to be adopted during the parliament’s spring session. It will also cover the use of state funds the government allocates to support the insurance system. Several options are being considered. The money is to be transferred directly to insurance companies via regional governments. This policy should also provide support to insurance companies, helping them to stay solvent in any circumstances. Let me repeat: I hope the law will be adopted by the end of the spring parliament session.

Sergei Bocharov: Thank you.

Vladimir Mudayev: Vladimir Mudayev, head of an association of family subsistence farms.

Mr Putin, will state programmes that support agriculture cover irrigation projects? I mean, will that support include compensation for irrigation equipment cost, or subsidised loans taken out to buy that equipment? Last year’s drought has shown that this policy could be very effective.

Vladimir Putin: I believe it is a very important issue. I won’t cite any figures now because I’m afraid to get them wrong. I know that in the Soviet Union, although Soviet agriculture never showed such high results as modern farmers do, the government spent a lot on irrigation programmes. Unfortunately, we don’t do as much. I have instructed the Agriculture Ministry to draft proposals on irrigation. Let us wait and see what they come up with. Then we will consider their proposals at a government meeting and see how they can fit in the budget. But on the whole, this is a very important issue. We’ll see what we can do.

Yekaterina Korobkina: I am chair of the Russian Association of Farm Holdings and Agricultural Cooperatives (AKKOR) in the Novokubansky District, Krasnodar Territory. Currently, pigs are being culled and slaughtered in a number of Russia’s regions because of an outbreak of African plague. We are very concerned about this problem, especially livestock farmers. Are these drastic measures really justified or are local administrations and veterinary services going to extreme lengths?  First they let the situation get out of hand and then destroy not only pigs but, as we know, horses as well?

Vladimir Putin: Ms Korobkina, I honestly do not know if the horses carry this illness or not, but I can tell you there is no antidote to this disease, and that is the main point. There is no remedy either in Russia or anywhere else in the world, scientists have not yet produced a vaccine. This animal disease is very dangerous and is a reason for other countries to close their markets to our farm products.

I have mentioned earlier that I had talks with the European Commission in Brussels, with our European partners. They embargoed all imports (for them it is imports) of pork from Russia, and this decision is based on reports of outbreaks of African swine plague in many of our regions.

I realise this is a grueling experience for pig breeders. Incidentally, pig breeding is the second fastest developing sector in Russia, following poultry production. Of course, the damage is serious. We have discussed this subject several times, with big producers, and at government and ministerial levels. Unfortunately, there is no other way to control the disease except by taking the harsh steps that are being implemented today. What can be discussed is the issue of compensation. Current practice is that compensations are paid by the regions. Whenever necessary, we give every support to the regions and will keep in touch with them regarding this matter.

Alexander Balakov: My name is Alexander Balakov, I am head of a farm in the Altai Territory, trade union chairman and member of the United Russia regional council. We back all initiatives put forward by your and our party. You have the support of all rural areas, as we heard today. I would therefore like to express on behalf of everyone our gratitude for the farming development programme and the one to be adopted on farmers’ support. It is thanks to this programme that rural areas have at last seen agricultural equipment we had never dreamed of seeing – both Russian and foreign-made. But, unfortunately, this programme, especially its part dealing with interest rate subsidies on loans to buy foreign equipment, has been short-lived. Now it stipulates: “… save for equipment that has no domestic counterparts.”

Today, if we have an imported seeding machine or a locally produced seeder, they tell us: take the local product, which is not as good. Today, I heard you say in your report that the government adopted a very important decision on equipment concerning the Rosagroleasing agency. It said that our engineering industry will be producing more advanced machines.

Knowing that, I would like to address you directly, Mr Putin. While our engineering sector is only finding its feet and there is not enough modern and robust equipment produced, it would be good to breathe new life into the programme to co-finance or reduce the interest rate on imported machinery above all, if it is possible. Thank you.

Vladimir Putin: You know there is such a possibility. You have raised a very important issue. Every branch of the national economy must be balanced, and each has its own interests to look after. What did you say? You said let us buy productive, efficient, good and not very costly imported equipment and we (judging from what you said) will raise bumper crops and perhaps make food cheaper. We clamped down on imports because of the economic crisis when our producers of farm equipment became overstocked.

When I visited the Rosselmash plant in Rostov, their shipment areas were not just full of machinery. They were crammed with it – a terrible picture. All aisles and passages were bursting at the seams. Far from being able to drive through them, you could not even walk there. Every nook and space was cluttered up with machinery. The plant was on the brink of bankruptcy: it was necessary to wind up its operation and lay off the staff. Nothing else could have been done in such circumstances … We took other measures, too, but this restriction on imports was aimed at bolstering Russia’s farm machinery production.

Today’s situation is different, with both Vneshtorgbank and Sberbank financing and providing loans for foreign equipment purchases. Only Rosselkhozbank is under certain limitations. I agree that it is now time to lift these restrictions on Rosselkhozbank. We will do this. But only without any subsidies. What are subsidies meant for? You must understand our position and the position of farming machine manufacturers. What does it mean, subsidising the purchases of foreign-made machinery? It means using our taxpayers’ money from the state budget to prop up production in other countries. That would be going too far.

What we can and must do is to create a climate for foreign producers to come to Russia and produce this equipment on our soil, just as we have done with car production. But this will call for some other restrictions, including on the import of finished products, and some others. Do you see? That will affect equipment users. But if we want our country to produce such equipment, we must agree to these things with an open mind. We will be in touch with your organisations, with farmers. Everything must be transparent, understandable and clear, with a definite outlook. I reiterate: if we want to have modern and reasonably priced equipment, without any subsidies, then we should press for it to be manufactured on our soil. Subsidising foreign products with tax-payers’ money would be the same as supporting Finnish butter production, for example. If I made the decision to do that, you would say: “Are you off your rocker? We produce butter in this country and you want to subsidise foreign production?” Producers of Russian-made farm machinery would tell me the same. We will certainly lift the limits on Rosselkhozbank loans but we won’t allow any state subsidies.

Remark: Mr Putin, the experience of building all kinds of agricultural consumer cooperatives in Tatarstan and other Russian regions has shown that they play an important role, not only an economic, but also a social one. So their development requires a strategic approach from the state, as you said. We would like to have the state involved in the development of these cooperatives not only through loans, which we may or may not receive from Rosselkhozbank, but also through public-private partnership. Some cooperatives have their feet firmly on the ground, but need more equipment and new technology. We would therefore like to have a separate programme based on such public-private partnership. That is what we are doing in Tatarstan. Thank you.

Vladimir Putin: Did you raise these issues with Mr Minnikhanov? (Ruslan Minnikhanov, head of the Republic of Tatarstan)

Answer: Yes, we have been working like this since 2006, with the republic compensating for 50% of the cost of equipment covered by cooperatives. It is done on a co-financing basis. There are also other programmes based on co-financing and we would like the federal budget to participate in this. Thank you.

Vladimir Putin: Alright, we’ll give it some thought. We have the minister here, and I now ask him to take note of that and see where, to what extent and how deeply we can get involved in this programme.

Question: Thank you, Mr Putin, for coming to our congress. I have been managing a farm for 15 years now, and have been head of the Rogovsky community for two years. A friend of mine asked about African swine plague. But now I have a question to ask not as a farm manager but as a community head. The issues we are faced with are very serious, because the veterinary law that was written in 1980s was only amended in 1993, with just three amendments. No law or regulation exists on keeping livestock. And as a community head I cannot do anything about conditions in which animals are kept. My request is, let us improve this law, or perhaps change it, or draft a new one. Thank you.

Vladimir Putin: Yes, you are right. Four or five months ago, at the end of last year, I think, sometime in November, we discussed the subject with agricultural producers when we were looking at the final harvest figures. All managers of large farms kept raising this issue. Work on the law is already under way, and we will update it without doubt. You are absolutely right. That is the right way of addressing the issue.

Question: Mr Putin, thank you very much for attending our congress. I have just one last question. You’ve answered all our questions on land. We are grateful for such an initiative as subsidising 50% of land cadastral work. Our regional budget subsidies 50% of land apportionment costs. There is only one remark I would like to make. The Leningrad Region has little land, and we are in the penultimate place  in the country in terms of the acreage granted, just 9 hectares. For a farmer’s outfit this is a very small amount. People want to farm. My wish is that the time required for leasing out even such small plots of land, 7 to 8 hectares, should be shortened. In a typical instance, a young lad asks the administration for a land lease. We begin to look into the matter and find that the rural council, to which he applied, told him: “Come again in eighteen or twenty-four months, we will consider your application and help you.”

Vladimir Putin: Is that the regional administration?

Answer: Yes, it is.

Vladimir Putin: I will talk with the governor to see how they organise their work.

Remark: Thank you. 

Question: My name is Tatyana Bolshakova. I am a farmer from the Krasnodar Territory. I also head the Belorechensk Region farmers’ organisation and the regional department of the rural women’s movement. Thank you for giving me the floor.

The rural women’s movement held a round table meeting during the congress earlier today. Women delegates spoke about many social problems, agreeing that all of them are rooted in the fact that small farms do not benefit from the huge funds allocated by the government and the Agriculture Ministry and the support measures they approve. This is not because the officials are inefficient, not at all.

Take the supply of fuel and lubricants. As the head of the regional association, I can tell you that only 20 out of the 522 family farms [in our region] received the required volume of fuel and lubricants last autumn. Why didn’t the rest receive them? Officials say we are free to receive them, but only in accordance with the approved lists and in Krasnodar. The city is located 100 kilometres away, which means that the farmers must hire a petrol tank to bring petrol to their farm, where they must unload it into a certified storage facility.

Another problem concerns fertilisers. We cannot get them either, because they are supplied only to the farms that have a specified crop rotation system. I have a farming area of 90 hectares; it is too small to be divided into several plots for growing wheat and sunflower the same year. Instead, I plant wheat one year and sunflower the next, but this means I am not entitled to fertiliser support.

Although about 25 million hectares of farmland are lying unused in the country, half of the rural residents, who constitute 30% of the country’s population, are jobless. So I suggest that the terms for getting support should be formulated so as to ensure that those who need support get it. We suggest that the amount of support be calculated per hectare.

Officials from the Agriculture Ministry said yesterday they were against my proposal, because profitability differs from area to area. This is true, but can’t they calculate support per hectare on the basis of information about operating farms, which pay taxes and have no tax debts? I don’t need exemptions for fertilisers and fuel. Just calculate how much I should pay, or even slightly more, so that I would have to account for spending... I don’t think that these problems are insurmountable. Moreover, if we find a solution, it will give a powerful impetus to bringing together unused farmland and jobless people in rural areas. This will be very big assistance for rural families, for small family farms. Could you help resolve this problem?

Vladimir Putin: You know, some experts say that subsidising per hectare will be very expensive and inefficient. Others say like you that this is the best way to resolve the problem. You have said that in this case you will not need exemptions for fuel and lubricants or fertilisers. But this means that subsidies calculated per hectare will grow out of bounds, because oil and chemical companies will take over part of these subsidies through such people as you if we don’t fight price rises.

Suppose we agree with oil companies to cut the prices of fuel and lubricants supplied to farmers by 10% from the November 2010 prices. Compared to current prices, the decrease will be 30% or even 37%. This will save up to 10 billion roubles in agriculture.

But if we accept your proposal – I don’t say that we won’t, but we should carefully consider how it can be implemented without creating complications – we may create new problems.

As I have said, if we don’t curtail the growth of prices of fuel and lubricants and chemical products, these companies will take over part of your subsidies. This is how it will be. Again, I am not saying that this cannot be done. I am saying that there are many sides to this problem and so there is no simple solution. However, we are considering this option. If we accept the per-hectare proposal for all farms across the country, we will actually be subsidising the oil and chemical industries.

In principle, this method has been applied in many countries. Yes, that’s true, but will this method be effective in Russia? Can we control all of the aspects you mentioned?

Anyway, before a decision is made, I would like the Agriculture Ministry, the Energy Ministry and regional authorities to take into account everything that has been said here about the availability of the support measures, because the organisation of actual delivery is the responsibility of regional authorities. For example, why do farmers have to go to other cities to collect petrol and diesel fuel, which ends up costing its weight in gold, with the whole of the subsidy spent on fuel transportation? This is not how it should be done. This is not what we had in mind when we approved the subsidies.

Mr Shmatko, I see you have something to say. Let’s listen to the energy minister.

Sergei Shmatko: Mr Putin, I just wanted to say – and this is good news – that a resolution on the retail electricity market was signed yesterday, according to which the provisions you mentioned are to be considered effective starting from January 1 this year.

Vladimir Putin: From January 1, 2011?

Sergei Shmatko: Yes.

Vladimir Putin: And you will recalculate spending and detract excess funds paid from future payments?

Sergei Shmatko: Yes, we will. Even if the people received old pay chits in January, their payments will be subsequently recalculated in accordance with the new provisions.

Vladimir Putin: Yes, this really is good news. However, the energy minister has diverted our attention away from your question, and he did it brilliantly. I applaud his talent. But this is an important question. I would like Mr Shmatko to analyse the organisation of this work in the regions, so that the support which we have approved and which we are financing generously reaches the addressees. Please, do it and report back to me.

Nikolai Khramov:  My name is Nikolai Khramov and I have a private farm in the Ryazan Region. My son and I have a small land plot, 3,500 hectares, but I own only part of it. This is a good question you have asked. In the past, we were given land for permanent life-long use under a special law, or a resolution... I had that land properly measured and its borders marked, but I may not buy all of it. They tell me I can buy only 15%.

I have been tilling it for 10 years, since 2000, and not since 1990. This is a substantial plot. I plant winter crops on an area of 2,000 hectares – I have already planted them this year – and will also plant spring crops. It is good that all these support measures are approved, but what should the farmers who received land for permanent use do to buy it at a reasonable price, and not have to pay 15 times the cadastre price? According to the cadastre, our land costs 45,000 roubles per hectare. There are many people in my region who received land plots in accordance with that resolution and now cannot buy it out. Maybe the people who received land for permanent life-long use could be given a 2% discount? After all, we pay to have the land measured and its borders marked, and do everything else. Maybe you could help us somehow while a new law is considered?

Vladimir Putin: That is, you want the cost to be cut…

Nikolai Khramov: Yes, for those who had been given land for permanent use.

Vladimir Putin: And for those who are working on that land.

Nikolai Khramov: Yes. I have worked on my land for years and have invested a great deal in it, and now they tell me… I have five kids – four sons and a daughter. My sons work with me and the daughter has a job with the Agricultural Bank. She doesn’t need to till the land; I have sons for that.

In conclusion, I’d like to thank you. We are very grateful that you have agreed to meet with us.

Vladimir Putin: Thank you for raising this issue because what you said means that people cultivating land can face problems when assessing their land value. We will think it over. The main thing for us is to make sure that those who are not entitled to land do not get it in order to resell it later with a profit. This is why we need an administrative mechanism so that land stays cheap but is handed over to those who cultivate it. We still need to streamline the administrative and executive procedures, but I have made note of your question regarding prices. We will think it over. And I request that you, Ms Skrynnik (Minister of Agriculture Yelena Skrynnik), consider this issue, formulate the policy and discuss it with the State Duma. We need a level-headed approach. I don’t think it would be right if the government cashed in on this process. However, it is also important to make sure that this measure disciplines people – that people do not get land for nothing. You know, if people get something for free, they do not value it. Yet it should not become a burden. I agree with you, we will think it over.

Alexander Mariyenko: Mr Putin, my name is Alexander Mariyenko, I’m from the Mayak farm holding in the Omsk Region. By default, those who grow crops in difficult weather conditions such as the Omsk Region, which borders on Kazakhstan, get less profit compared to those who are farming in more favourable conditions, such as Kuban and other regions. Costs per hectare are the same in these two regions because farmers in both need to plant crops, harvest them, and so on. Grain prices are the same, too. But the yield depends not on my hard work but on the whims of Mother Nature, on whether it did or did not rain. So, how can we ensure that the profits we receive allow us to develop, rather than merely survive?

Vladimir Putin: Have you tried growing bananas?

Alexander Mariyenko: Unfortunately, not.

Vladimir Putin: So, you mean to say that if your weather conditions are unsuitable you won't try to grow oranges, will you?

Alexander Mariyenko: Clearly. But if that’s your take, then just tell us whether we should be growing wheat in our climate or if Kuban alone is enough. Then we'd be doing something else.

Vladimir Putin: You know, this is risk farming… There are examples of this outside this country. For example, our partners in the northwest – in Finland – are profitably engaged in farming like this. They use state-of-the-art equipment, chemicals, means of production, and technology. These are means that we need to make use of in order to increase profits, and we need to do this.

We have convened today, and I have come here to report to you on the measures that are being taken to create conducive conditions, whether in terms of equipment or otherwise. Naturally, this is a long process, but one can work efficiently even in risk farming areas. We will be searching together for mechanisms that will help us resolve these issues. As for Siberia… You know how good Siberian grain is.

Answer: It is very good.

Vladimir Putin: Yes, it is very good. So, there are risks and advantages. We need to exploit these advantages. Certainly, the government will be supporting you because agriculture is government-supported the world over. And this is an absolute necessity for this country. We will be working with you towards this goal.

Question: Mr Putin, ladies and gentlemen. It is a great honour for me to attend this meeting today. It is a historic event because Mr Putin is here, and I'm here to report on my minor problem. I am from the remote Kholmsky district of the Novgorod Region, and I have a large family. I have 20 children, 14 of whom are adopted.

Vladimir Putin: How do you, such a fragile woman, manage them?

Answer: I have very good kids. But I have a problem. We run a livestock farm. Thanks to Rosselkhozbank, we have purchased pedigree cows. And we are grateful for the loan, but we are still repaying it – we expect to pay it off this year. We would like to expand our farm because we also breed sheep and poultry, and we often trade with other districts and attend various fairs. There is a minor problem though – we don’t have a van. But even that is not our sore spot, we will earn the money for it. The main problem is that we need a bigger farm. Please, help us expand our farm, and we will earn money for the rest.

Vladimir Putin: How big a loan did you take out? The one you are repaying.

Answer: We took out 540,000 roubles and still have a little more than 100,000 to repay.

Vladimir Putin: You are supposed to repay it, aren’t you?

Answer: Yes.

Vladimir Putin: How much does a new farm cost?

Answer: I don't know. We are using the land and the old livestock facility that previously belonged to the collective farm and used to accommodate 100 head of cattle.

Vladimir Putin: How many head of cattle do you breed?

Answer: Currently, we have 20 milk cows, and we recently bought a bull.

Vladimir Putin: So, you have one bull per 100 cows?

Answer: No, it is one bull per 20 cows.

Vladimir Putin: Let’s do the following: we will help you repay the loan, build you a farm and buy a van, taking into account that you have such a big family.

Remark: Thank you very much.

Vladimir Putin: But I need your personal data. A colleague of mine will jot it down. How old are your children?

Answer: Two of my adopted children go to agricultural vocational school. They are very technically savvy.

Vladimir Putin: How old are the remaining children?

Answer: The youngest one is ten. No, that’s not true, I also have an eight month-old daughter.

Vladimir Putin: I see. I would like to congratulate you on the upcoming Women’s Day.

Question: My name is Natalya Kokhanovskaya and I have 20 children, 16 of whom are adopted.

Mr Putin, my older children have grown up already. This is not a conclusion, I just wanted to add something. My elder nine children have grown up already, and six of them graduated from agricultural universities with the other three graduating from colleges in our region. Here is what I would like to say. I managed to raise these children because I was taking care of them in my homeland. Given how many orphans there are in Russia – and I believe it’s a shame that there are so many of them – together with my elder children, we adopted ten more children who are now between eight months and ten years old.

Traditionally, large peasant families lived in Russia. They cultivated their land and never abandoned it. The government should treat large farmers’ families with special care. I, for example, decided that I would be sending my children to universities and colleges that taught them useful skills rather than to prestigious ones. I needed a mechanic, and a child of mine went to a mechanical engineering department; a daughter of mine is an agronomist specialising in plant protection. The same is true of my other children. I have raised specialists.

But as the previous speaker said, we are having a hard time repaying our loans. We have taken out loans, but these funds are not enough for us to do proper business and have time to educate our children at various recreation centres or invite a music teacher… Our children should be well-developed and clever, so that nobody says that they are country trash.

Mr Putin, I would like to present you with a small gift from our family – our family photo album.

Vladimir Putin: Thank you.

Question: My name is Yelena Averyanova, and I’m an associate professor at the St Petersburg Agrarian University.

We have been working in the field of agricultural loans and consumer cooperative societies for 15 years already. At our university, we have set up a pilot student cooperative society because we believe that the seeds of cooperative ideology need to be planted in schools and universities. We – or I, as a professor rather than as a mother of a large family, and my 300 students – ask you, Mr Putin, to pay due attention to cooperative education. If you do, our rural communities will develop because if we train our officials with cooperative thought in mind, they will foster the development of farming in Russia, including through cooperative societies. Thank you very much. Please, pay attention to cooperative education.

Vladimir Putin: Why is cooperative education so special? How is it different from other forms of agricultural education?

Answer: Cooperative education is special in that it allows us to teach students how to set up smaller cooperative societies or artels as early as in secondary schools and universities. You see, for ten years we have been doing this on foreign grants. We were getting in touch with various foundations, winning grants, and carrying out these programmes ourselves. I already feel ashamed to request the Eurasia Foundation to fund our student cooperative societies. We believe that this should be a government programme.

Vladimir Putin: Does your university belong to the education system or to the Ministry of Agriculture?

Answer: We belong to the Ministry of Agriculture. But we are a government-funded university.

Vladimir Putin: Ms Skrynnik, have you heard this?

Yelena Skrynnik: Yes.

Vladimir Putin: When we are back in Moscow, please, tell me about what can be done and how we can help, will you?

Remark: Thank you very much.

Vladimir Putin: Don’t thank me yet. We’ll certainly look into it.

Question: My name is Yuri Dorokhin. I am a private farmer from the Lipetsk Region. Mr Putin, a Russian saying runs: “Whatever you give me will be nice but better give more.” But then, you have promised us so much today, and we don’t feel right asking for more. But there are matters we cannot tackle unless we get your help. So we’d like you to hear us out, the people working the land.

This is my question. The production of A-80 petrol has stopped even though the majority of large and small farms have machines working on it. It’s too expensive to re-equip them for diesel fuel and it would make more sense to buy new machines. Possibly, we missed the information that there will be no such petrol anymore – or we just weren’t informed at all, so we could not prepare for it. There is enough A-80 petrol stocked up for this year’s sowing and harvest. Bit what will happen when it runs out? No one seems to care. That is my first question.

My other question concerns price fluctuations. We’ve had enough of that. We haven’t the slightest idea of the present price of grain we have reaped and are storing up, and we will not know tomorrow about the prices we can expect for our wheat or barley after next harvest. Farmers have two troubles – bad crops and bumper crops. Prices drop with good harvests and when prices go up, we have nothing to sell.

Wheat prices are plummeting as all the other prices are growing. Large amounts are expected to be put up for sale at auctions, so all mill owners and middlemen say they don’t need our grain – they’ll buy enough at auctions at six roubles (a kilogram). So they dig their heels in at six roubles. Millers have been using cheap grain for two years but bread retail prices haven’t gone a kopeck down! And when harvest begins, we hear from everywhere: “We have lots of grain, so it will be dirt-cheap.” We farmers are extremely dependent on a lot of factors, and dealers are taking advantage of that. We have no good grain stores, and we have problems stocking up grain, especially in autumn. You know the rules of that game, Mr Prime Minister. It’s hard to preserve grain, and prices go down as we have to sell it. Now, it’s spring, we’ll be sowing soon, and the farmers who have grain leftovers sell them whether they like it or not as prices are plummeting – they cannot keep the grain any longer. That’s how it goes.

I am the biggest farmer in my village. The place depends on me. So I have brought you a short letter from my fellow villagers and I would like to use this occasion to give it to you. May I?

Vladimir Putin: Mr Zubkov will take it and pass it to me.

Yuri Dorokhin: Thank you very much. Thank you for the government assistance. I took up private farming in 1994 with a 24-hectare plot. Now I have 1,200 hectares. We are making some progress thanks to your help but we are anxious to develop at a greater pace.

Vladimir Putin: I see.

Yuri Dorokhin: Thank you very much.

Vladimir Putin: Mr Dorokhin, you encountered many problems in your life. I don’t know whether you were aware of them or not. Now, you spoke in simple and plain language, and you mentioned the sore spots of our big industries. Mr Dorokhin did not make a long speech but he hit the nail on the head – particularly when he spoke about fuel.

We had a discussion earlier, and our colleague from Omsk in Siberia said: “How should we make agricultural production efficient and competitive?” You may remember that I answered that we need new technology, new work methods, a sufficient stock of new fertilisers, etc. But if we need new equipment, we must make our manufacturers produce competitive cutting-edge commodities. For that, we agreed at a certain stage that our petroleum industry should shift to new environmentally friendly fuels that will not pollute our cities and other places where people live. It’s all balanced out, you see.

In this, we met the needs of our petroleum industry and the army, because the army also has many vehicles that work on outdated fuels, so we postponed the shift to new fuels for three years, if I am not mistaken. We had planned the shift for three years earlier, and warned everyone about it. But the oil companies persuaded us to extend the production of old fuels. That was how they clashed with engine manufacturers, who say now: “How is that? We have already launched new engines – and now, no one will buy them, and our plants will come to a standstill.” See how it’s all interdependent and everything in the economy has to be in perfect balance.

Innovation is inevitable. In the final analysis, all industries stand to gain from it, including agriculture. It is an incentive to upgrade equipment, to switch to a new generation of machinery. True, it implies greater expenses, so it’s up to the state to help you another way, by increasing subsidies. What have I just announced? We are allocating 3.7 billion roubles to sell you cutting-edge equipment at half-price, and you should jump at the opportunity. If you need more, we will help.

It would be wrong to put the brakes on progress, though it needs the greatest caution. If you find it too fast, we should think about it – but then, we will let automobile manufacturers down.

Now, let us talk about prices. You know that the grain market price approaches 9,000 [roubles per tonne]. It’s 8,500 in some regions.

Remark: It’s six to seven.

Vladimir Putin: Right, but it has come close to 9,000 in some areas. Mr Zubkov, who is monitoring the situation, has briefed me about it.

Remark: The price has gone down now.

Vladimir Putin: Now it has. We have announced that we will use the reserve fund… But food prices are soaring. You know that hundreds of millions of Russians live in big cities, and we must give thought to them, too. I know that prices are down a bit. But that’s what the government has set up reserve funds for. When you were in dire straits, Mr Zubkov and the Minister of Agriculture came to me and said: “We need money to urgently remove low-price grain from the market to help farmers keep prices at the proper level.”

Viktor Zubkov: It’s true, we did.

Vladimir Putin: Now, this grain is used to lower the prices. But all that should be balanced out between manufacturers and consumers. I haven’t yet taken full stock of the situation but, if grain prices are somewhat down, it means we have hit our target on the whole in this country. True, I realise that this is not the audience to rejoice in this particular achievement.

I have said similar things about fuel. The deputy prime minister for that industry said to me: “Oil companies are complaining.” Still, the manufacturers have kept their word. They have cut prices by 4.5% for petrol and by almost 8% for diesel fuel. Regrettably, fuel marketing is disorganised in some places. That’s something we need to work on. Technically speaking, this sector is fulfilling most of its obligations. As I have repeatedly said, everything should be well-balanced. Naturally, we will keep an eye on pricing issues.

However, the state doesn't have so many instruments in conditions of a free-market economy. As far as grain is concerned, reserve grain funds are one such instrument. Other instruments that can influence the pricing policy include the entire range of economic-stimulus measures, including loan-rate subsidies, leasing-rate subsidies and extended loans. We have promised five billion roubles to those retaining their cattle population. We have set aside this sum total which will be disbursed. We have promised another one billion roubles for grain seeds and the sowing season, and we have also allocated this sum. An additional one billion roubles was promised for mineral fertilisers. We have also disbursed this sum and have reached an agreement with the chemical sector that it will hold on. We can see some problems. Some regions have posted 30% growth in terms of mineral fertiliser prices. We will cooperate with them, no matter what. And not only with them because they stick to factory-gate prices, as agreed. But it's unclear what happens next. We will work on this, and we will help you. But there are not so many instruments for influencing the pricing processes. Such instruments exist, but they are, nonetheless, limited. As far as weather conditions and the drought are concerned, we are absolutely helpless in this connection.

Question: I'm from the Karachayevo-Circassian Republic, which you know for its sights. All your remarks before the congress are a gift for farmers and those present here. We will also discuss this, after returning home.

Unfortunately, everything being said here does not reach the regions. How can we find all this information now mentioned by you and demand from our esteemed regional officials that they must do it one way, and not the other? We are sitting on a horse, and they are pulling it by the bridle! In this situation, I get the impression that the farmers have no incentives for implementing those projects... We would like to have all this information, so that the federal government would monitor the implementation of all decisions mentioned here in the regions. Thank you very much, Mr Putin.

Vladimir Putin: I didn't come here by sheer coincidence. I've just mentioned specific measures which have been and will be implemented by us. But I've come to attend precisely your congress. I realise that Mr Vladimir Plotnikov has an opportunity to meet with all of my colleagues, with deputy prime ministers who are present here, with ministers and the Rosagroleasing CEO who is also sitting here. He will receive all this information, and through the Russian Association of Farm Holdings and Agricultural Cooperatives will bring this information to all farmers. But this is still not enough. Work should be organised appropriately at the regional level, without the so-called additional, unnecessary and cumbersome administrative barriers. To be honest, we are cooperating with the regions precisely for this purpose, and we will continue this work, no matter what.

Question: My name is Vyacheslav Shokhin, a farmer from the Oryol Region. Mr Putin, you have mentioned all questions which we wanted to hear, while going here. But there is one question which concerns me and our district association. We prioritise the land issue. There is such a saying: "Working on somebody else's land is like living in a rented apartment." Do you understand? This issue is very serious and important for us. For instance, many farmers, myself included, are already successful performers. We have raised our children. They become educated and want to till the land. As you have already said, small and medium-sized businesses will receive priority land-ownership rights. But we are now facing the following problem. Some people arrived here in the past, invested in land plots, leased them and are tilling them, and then people with big money arrived. Do you understand? In their time, they had signed 49-year lease contracts stipulating far worse terms than our contracts. They realise that we are living next door and are treating us decently. You have noted correctly that we are being nominated for the post of legislature deputies and are being elected. They are starting to treat us with respect. They want to cede all these land plots to us because they realise that we will not treat them badly. But it turns out that those wealthy individuals want to even out this process and to take away the land plots. They have legal counsels. That's why I'm asking you to stipulate priority land-purchase rights. Those wishing to cede their land plots should know about this, so that the process will not be disrupted. But you know the way it happens: Some characters come, pay the farmers and start buying out land plots. Their legal counsels nip us in the bud, and we are unable to confront them.

Vladimir Putin: What region are you from?

Vyacheslav Shokhin: The Oryol Region.

Vladimir Putin: Maybe this issue is not very acute as far as the Oryol Region is concerned, but we have major similar problems in the Moscow and Leningrad regions where land prices are high. That's why we are noting the need to improve mechanisms for the transfer of land-property rights. There is another problem linked with land plots. Such plots only exist on paper and have not been allotted to date.

Vyacheslav Shokhin: Mr Putin, we need priority rights!

Vladimir Putin: It's often impossible to find the owners of such land plots. And what should be done about this? There are no easy answers to these questions. Today, I have only outlined this problem in general and shown the direction we will take. We will move in this direction, no matter what. I completely agree with you that numerous seemingly optimal, market-style and up-to-date decisions had been made 10-15 years ago, that is, in the 1990s. They have placed us in such a difficult situation that we are still unable to rectify it. But we will search for a way out. This concerns your region, too.

Vyacheslav Shokhin: Thank you!

Remark: May I ask you a question?

Vladimir Putin: Yes, please. I hope this will be the final question.

Question: You have told us many useful things. But I would like to ask you another question about farming machinery. I'm a farmer from the Republic of Kalmykia, a high-risk farming area. Nevertheless, we grow grain. We have everything, including farming machinery and land.

But we are really worried about farming machinery prices. Our relatively new harvesters are aged 17-20 years. It's very difficult to replace them. Farming machinery now costs much more than before. Before this year, local grain prices were two or three roubles. We had to harvest almost a thousand tonnes of grain, that is, some 800-900 tonnes, in order to buy a harvester. Harvesters are expensive. Maybe this is not so, but we consider them very expensive.

I applied for a harvester, hoping that we would collect some money, take out a loan and buy one harvester. A Russian-made Vektor harvester costs as much as two Niva SUVs and can replace two other harvesters. But its price will skyrocket by 390,000 roubles, unless we pay for the harvester by late February. I don't know how we can settle this issue. Moreover, we have to recycle old machinery. Although the relevant programme has been launched, there is nothing like this once again. The same concerns motor vehicles. Our obsolete vehicles also have to be replaced. The ZIL Automotive Plant no longer sells its small trucks on the market. Only GAZ Group is still working. One Vektor harvester threshes six cubic metres of grain. What is the correct approach in this sphere? And I don't know how to regulate the grain market. In the past, we would thresh grain, deliver it to a grain elevator, give it to the state, deposit the money at a bank and pay taxes into the federal treasury. There were no problems. We are now facing some problems with grain. This is all. Thank you.

Vladimir Putin: I'll start where you have finished. As a rule, grain markets in all nations with a normal free-market economy are regulated through exchanges. If we had acted in line with the advice of some Russian economists and analysts, then we would make an absolutely correct decision from the standpoint of the free-market economy. We would send fodder grain to the exchange and stabilise prices for this type of grain. I think such prices would go down a bit. On the whole, you would have to buy such fodder grain for about 6,000 roubles per tonne. And we would distribute such grain for 4,500-5,000 roubles. This decision is not very market-wise. In this situation and considering the two-year drought, as well as large-scale demand for such grain on the part of livestock-breeding farms, I think we have made the right decision. On the whole, the exchange is supposed to regulate the market in normal conditions. Naturally, it should function normally. It should stipulate the required regulations which should be enforced accordingly. Adequate supervision is also required. On the whole, this is the simplest and universal means of normal pricing policies on the food market and, in this case, the grain market.

As far as equipment is concerned, we need the programme for expanding the farming-machinery sector, the same as in the automotive industry. All global brands have now entered the Russian market. All of them manufacture motor vehicles in this country today. They have relocated production on a large scale, manufacturing components in Russia. And they have good plans for the future. This was linked with certain restrictions, including used-car imports to Russia's customs territory.

Frankly speaking, not everyone liked this. It's easier to go and buy a cheap used foreign car. That's about it. To be honest, I understand these people, our fellow Russians, on the whole.

But if we want to have our own good, top-quality and promising Russian-made cars, in that case we have to limit foreign-car imports. We will have to stipulate the same restrictions, if we want to manufacture top-quality modern farming machinery in Russia. You are the clients! The same is true of any production sphere. In that case, you and we would be jointly making responsible decisions in a professional manner. Do you understand?

The same concerns the transport engineering and air traffic sectors. Airlines are telling us that they don't need Russian-made planes, and that the government should allow them to import foreign aircraft duty-free. In that case, Russia will never manufacture its our own planes, and the national aircraft industry will simply cease to exist. We should act very prudently. But we know these problems. We can see them, and we have charted an entire range of measures for supporting the agro-industrial sector. We have been consistently implementing them in the past ten years, and we intend to continue doing so in the future. As I have said, we will allocate 150 billion roubles for supporting the agro-industrial sector this year alone, and we will invigorate such efforts. We will do the same in all spheres, no matter what.

When we had launched this ambitious economic-stimulus programme ten years ago, there were no farmers, to be honest. They only said there would be farmers, and many colleagues told me that this should not be done because agriculture is like a black hole, and that nothing would come of it, regardless of investment volumes. They said the Soviet government had invested heavily in agriculture, but there was no food available, and people went to Moscow to buy sausages. Do you understand?

At the same time, you and we have accomplished this. I have already mentioned these statistics, including gross agricultural-produce output, production-growth volumes, the share of domestic products on the Russian market, as well as import substitution with domestic goods. We have made obvious progress, despite the extremely difficult drought-linked conditions of the past two years.

Of course, we have to streamline these mechanisms, and, naturally, we will do this. A woman, a mother of many children, took the floor here and said the villagers wanted to educate their children in such a way, so that no one would ever call them hillbillies or country bumpkins. And I want to say that villagers ought to feel proud of their status. I wish you every success. Thank you!