The First Deputy Prime Minister noted that conditions existed in the country for creating a civilised milk market. Over the past three years, in the course of implementing the National Project and the government programme for the development of the agro-industrial complex the gross production of milk increased by 1.6 million tons and per capita production by 12 liters. "On the whole the dynamic is good, but not good enough," Mr Zubkov noted.

 He reported that government support of dairy stock breeding has exceeded 5 billion roubles, the volume of loans stands at 220 billion roubles, subsidies of interest on loans at 23.2 billion roubles and the contribution of the regions at about 17 billion roubles. Rosagrolizing provided farms with more than 100,000 heads of pedigree cattle, 197 new farms for 126,000 cows were opened in the regions and nearly 800 existing farms have been modernised.

Mr Zubkov stressed that "the key task today is to increase the volume and effectiveness of milk production". In fulfilling that task one should concentrate on three areas: production, processing and sale of milk, and dairy products. As for production, Mr Zubkov proposed tying the allocation of funds for the implementation of the milk programme to the end results of every facility. As for processing, "a decision has been made to prepare a long-term agreement - for a period of at least five years - between the sectoral unions of producers and milk processors", the First Deputy Prime Minister said. The parties have already signed a framework agreement on their readiness to negotiate the price and volumes of purchases. The sectoral unions must agree the price formula and volume of purchases and sign the relevant agreement by the beginning of March.

Mr Zubkov called on the Russian regions to become more actively involved in this work and introduce a tripartite format of such agreements. That will make it possible "to overcome the seasonal factor, create real incentives to increase efficiency and production volume, to forecast the demand, the amount of processing and price trends."