Mr Zubkov read Prime Minister Vladimir Putin's greeting to the delegates and guests of the congress.
In his speech, among other things, Mr Zubkov said the following:
A year has passed since the first milk producer's congress. The joint efforts of the government and the dairy industry to promote an economic recovery in the industry in 2010 have yielded their first results. The dairy industry is now more consolidated than a year ago. The agreement with processors initiated by the Union is working. The purchase price for raw milk has made industry growth feasible.
In 2010, the government supported the industry and strengthened its support for some items. It continues to apply financial and economic instruments at the federal level – 100% subsidy rates for loans and budgetary support for breeding. It funds regional programmes (3.4 billion roubles, including 2.1 billion from the federal budget), development programmes, family dairy farms (5.2 billion roubles, including 3.6 billion from the federal budget) on a parity basis with the constituent entities of the country. Amendments to the technical regulations on milk production made at the Union's request are in effect. This enables increased production of commodity milk, as well as improvement of its quality. The implementation of the law on trade promotes equalisation of inter-industry profitability. Import duties on most types of dairy products (dried and condensed milk, butter) were increased by an average of 20%, and 100% for cheese. We will continue to support domestic producers.
The previous measures resulted in the growth of the cattle population in 2010 in 29 regions. The profitability of milk production in 2010 is over 18%. This minimised losses milk producers faced due to the drought last year. There was milk production growth in 38 regions of the country.
However, analysis of the production structure shows that there was a 6% increase only at farms. This is largely the result of a successful programme for family dairy farms that the government initiated in 2008. In 2009, 42 farms were built, and 259 in 2010.
Nevertheless, homesteads and other agricultural organisations in the past year have reduced milk production. Today we will discuss what hinders the development of these kinds of farming.
This year, the government will adopt further measures to support livestock production. It will allocate five billion roubles to farmers who keep retaining cattle. Such farms, including the farmers, will receive subsidies for every cow in the first quarter. This bill has been signed. At the request of the regions, all feed grain from the intervention inventory will be sold to livestock producers at affordable prices – 50% below market prices. The amount of funds reserved for agricultural insurance is over double last year's – 5 billion roubles versus 2 billion roubles in 2010. In the near future, the government will address the issue of providing subsidies to buy pedigree cattle.
In addition, on March 2 at the farmers' congress, Prime Minister Vladimir Putin announced further initiatives for small farms. These are extension of the programme for the development of family dairy farms until 2020 and the inclusion of a new initiative, providing the owners of farms with comfortable residences, compensation from the federal budget for half of farmers' expenses on registration of land ownership and the cancellation of any additional bills for arrears or surcharges for electricity.
The delegates at the farmers' congress discussed product sales. A farmer from Tver cited the example of "direct" sales of meat at an average of 170 roubles per kilogram. This has led to lower retail prices. Direct sales are particularly relevant to dairy farms and homesteads.
The agreement between the Union of Milk Producers and Rosagroleasing, signed today prior to the congress, can be an effective tool to ensure farmers get the necessary equipment.
Today at the congress, we would like to discuss new directions for the dairy industry. This is all the more important given rising utility rates, including those for electricity. One example is the possibility for introducing non-waste processing technologies, including the production of biogas. Some regions have this kind of experience. We need to discuss the requirements for this. Rosselkhozbank and Rosagroleasing are willing to participate in such projects, which are aimed at improving profitability in the industry.
The Union of Milk Producers should also be actively involved in work on a new state programme. We need to come up with a range of systematic measures aimed at expanding the dairy herd, optimising investment structure in favour of innovative farm modernisation projects, improving state support for dairy farming in order to ensure the growth of commodity milk while reducing the cost of its production.
The dairy community must become a paragon of best practices, including pre-payments from processors to producers for raw milk, long-term contracts between the participants of the distribution chain from producer to retail. This will mitigate the problem of seasonality. During the "high" season, milk producers should have guaranteed sales and a stable, reasonable purchase price, and processors – a raw materials base and a predictable cost base.
The result should be a competitive industry that can saturate the domestic market with dairy products by as much as 90%, a figure which was defined in the Doctrine of Food Security. Last year it was 78%.
In conclusion, I wish the Congress success.