While on a working trip to the Rostov Region, Prime Minister Vladimir Putin visits an agricultural cooperative and talks to its workers
23 june 2011
During his working trip to the Rostov Region, Vladimir Putin visited the Zavety Ilyicha (“Lenin’s Testament”) agricultural cooperative in the village of Peshkovo. The prime minister was taken to the fields, where he saw agricultural workers harvesting the crop, and talked to the cooperative’s staff.
Remark: Here are a father and son, Nikolai and Andrei, a workers dynasty.
Vladimir Putin: So, do you enjoy doing the same work your father did?
Sergey Ponkratov: Vasily is a driver. He has been working on a collective farm since 1984 -- longer than me, I think. Here are another father and son, Yevgeny Sakha and Sergei Sakha.
Vladimir Putin: A whole dynasty, it seems.
Sergey Ponkratov: A dynasty, exactly. We have another family working at the farm, but they are working on cover crops at the moment.
Vladimir Putin: What is your average monthly salary?
Sergey Ponkratov: 11,500 rubles.
Vladimir Putin: How do you settle issues with fuel, lubricants and fertilizers?
Sergey Ponkratov: As for fuel and lubricants, thank you very much for your prompt arrangements. We have been purchasing them at a stable price through the programme from February through May. The average price is about 15.7 roubles per litre.
Vladimir Putin: This is about 35 percent lower than the market price.
Sergey Ponkratov: Exactly. The market price is much higher. This is a considerable difference, and we thank you for that.
Vladimir Putin: And you are aware that we have arranged with oilfield workers to prolong the benefit prices programme until the end of the year.
Sergey Ponkratov: This is great, thank you. This brings immediate results. Receiving subsidized loan compensation, for example – this is good, thank you, but it takes some time after you have paid off the interest. With this programme, we get it...
Vladimir Putin: Immediately.
Sergey Ponkratov: Exactly, and this is very convenient.
Vladimir Putin: Do you use these subsidies in full amount?
Sergey Ponkratov: Yes, of course.
Vladimir Putin: Last year, there were reports that in certain regions...
Sergey Ponkratov: No, no, we use it all, I cannot speak for everyone...
Vladimir Putin: Last year, the country’s agricultural producers used only 72% of the total preferential limit we granted.
Sergey Ponkratov: This is a low figure, and this is unfortunate. I'll say again – paying 150,000 against 200,000 is a vast difference…
Vladimir Putin: What about fertilizers?
Sergey Ponkratov: Last year, we received compensation for 20% of the cost of fertilizers. This year, we have already received compensation for 11% of the cost. I have to say that this year’s payments came faster.
Vladimir Putin: Did they? That's good to hear.
Sergey Ponkratov: Mr Putin, we would very much appreciate it if there were a possibility for the government to grant more, as fertilizers are the basis for our work.
Vladimir Putin: But there are two components to this. First, lowering the price, second, the subsidies. Two years ago, we made arrangements with fertilizer producers and made an agreement with the Agricultural Producers Union…
Sergey Ponkratov: Yes, with regard to growth. If I remember correctly, this year we have purchased ammonium saltpeter (we use it in great amounts) at 10,100 roubles per tonne.
Vladimir Putin: Growth is 12%?
Sergey Ponkratov: Yes, about 8,800 roubles.
Vladimir Putin: This accounts for about 12%.
Sergey Ponkratov: Yes, Mr Putin, something like that. Again, as we have contributed more in comparison to last year, this has had an effect on crops, which you can see.
Vladimir Putin: You have a dairy herd as well, yes?
Sergey Ponkratov: Yes. It is not large – 250 cows. But here, as a managing official I have to choose between the two in terms of economic benefit – either to grow further, to increase our number of livestock and make our...
Vladimir Putin: To expand your production.
Sergey Ponkratov: Yes, the production. And, naturally, this would put our economic and industrial expenses towards a wider range of activities.
Or, I have to say: Engaging in... But I wouldn’t like to do that now.
Vladimir Putin: If the export potential is good, then exporting crops will bring benefits.
Sergey Ponkratov: Yes, exporting crops is the main basis for us.
Vladimir Putin: No one ever believed that Russia would export its crops! We have always purchased crops, and did so in large amounts. Russia used to be the top crop customer on the world market. In 2009, we became the world’s third highest crop exporter.
Sergey Ponkratov: In the past decade, Russia has achieved a stable export flow. I suppose we have learnt to do that at last.
Vladimir Putin: True.
Sergey Ponkratov: We have mastered that, and I suppose technology has supported this, as well as other factors, maybe even the form of organisation.
Vladimir Putin: The form, fertilizer, a better work management, and equipment.
Sergey Ponkratov: Absolutely.
Vladimir Putin: You mentioned that machinery has been of a better quality? Your colleagues use this machinery. What can you say about modern Russian-made agricultural equipment? Which do you use?
Sergey Ponkratov: He uses the Acros combine harvester.
Remark: A good combine harvester.
Sergey Ponkratov: He has used both the Don-1,500B and the Acros.
Vladimir Putin: Is there any difference?
Answer: Of course there is. The Don-1,500B and the Acros...
Vladimir Putin: The latter has a better performance and makes for better work conditions, yes?
Answer: Yes, and it has a larger driver’s cabin.
Vladimir Putin: Does it have an air conditioner?
Answer: It does. And a fridge as well.
Sergey Ponkratov: Speaking of our tractor stock, we mostly aim to cooperate with Belarus’ Minsk Tractor Plant. We recently purchased a rather powerful 2022 model – though, Mr Putin, we purchased a French-made grain seeder, which has a hydraulic hitch. In the autumn, we planted grains (wheat), and in the spring we have to plant sunflower and corn. We take off harvester-threshers and attach the seeder onto the same hitch.
Vladimir Putin: So they are compatible, yes?
Sergey Ponkratov: Yes, and it was made specially for attaching them to a single hitch. It is very convenient as it can be raised and lowered along the road. And it is very compact, too.
Vladimir Putin: Are you aware that we have lifted all restrictions on purchasing equipment from abroad?
Sergey Ponkratov: Any equipment?
Vladimir Putin: Yes, we have done away with restrictions on all equipment, although we do not pay any subsidies. I think this is clear. We do not subsidise any foreign food producers and, in a similar manner, we cannot subsidise foreign agriculture equipment manufacturers, or else it would tear down our domestic producers.
Sergey Ponkratov: That makes sense.
Vladimir Putin: We have to give them the opportunity to develop.
Vasily Golubev: Mr Putin, we subsidise 30% of the regional budget. Local companies purchase only domestically-produced agricultural equipment. We introduced this in 2010 and it is valid for the whole year. Previously, it was valid only for a few months, but we have now introduced it for the whole year. So, when they finish harvesting and have some money, they have the opportunity to purchase domestically-produced equipment.
Remark: Yes, we are looking forward to this.
Sergey Ponkratov: The Acros combine harvester costs 4,800, but through your programme it will cost 3,800 or 3,900.
Vladimir Putin: Have you preserved all of your livestock from last year?
Sergey Ponkratov: Yes, we have.
Vladimir Putin: Do you have the opportunity to obtain the subsidy you are entitled to for preserving it?
Sergey Ponkratov: Possibly.
Vladimir Putin: We have earmarked 5 billion roubles from the federal budget for farms that have preserved cattle in adverse conditions.
Vasily Golubev: The region has received the money.
Vladimir Putin: So the governor has confessed under duress. Now we should get the money down to…
Vasily Golubev: If they preserved the cattle they have received it as well.
Vladimir Putin: We must do it. Why do you think I mentioned this? Because my papers say there are back payments in some regions. We should speed up the process while you prepare relevant applications.
Sergey Ponkratov: I see, Mr Putin. Thank you. On the whole, we are apprehensive about future prices. It’s 6.5 roubles, including VAT. I mean the 3rd class wheat price for grain elevators.
Vladimir Putin: The export price is slightly over 7,000 for FOB Black Sea – grain in loaded ships near the Black Sea coast. It might be a bit more expensive at the exchange. Anyway, the world market price approaches 9,000.
Sergey Ponkratov: What about the trend?
Vladimir Putin: It’s growing.
Sergey Ponkratov: So you think we shouldn’t be too quick with sales?
Vladimir Putin: It’s up to you. Prices are going up due to the problems many countries are currently experiencing. The main problem is that many countries have started to grow rape for bio-fuel, while rape is a tough plant as you probably know better than I do, and I think an agronomist would know it better than all of us put together. Rape makes the soil unfit for other crops for several seasons, so it’s very hard …
Sergey Ponkratov: And they use special herbicides on such soil.
Vladimir Putin: It’s very hard to reclaim such land for cereals – hence the current problems. But there are many more factors.
Sergey Ponkratov: I might sound callous but I’m glad they are having problems.
Vladimir Putin: What matters most is that we should avoid them.
Sergey Ponkratov: Most of our wheat is 4th class. It presently costs 6.3 roubles.
Vladimir Putin: You mean fodder wheat, right?
Sergey Ponkratov: No, it’s food grain, with 18-25% fibrin concentration.
Vladimir Putin: While fodder grain contains 3-4%?
Sergey Ponkratov: No, it’s with 15% fibrin or unwashed grain. Its price is presently no higher than 6 roubles.
Vladimir Putin: Good price, too.
Sergey Ponkratov: Very good, Mr Putin. More than that, we have lately seen that there is no great price difference between…
Vladimir Putin: …fodder and food grain? There’s really an only a minor difference.
Sergey Ponkratov: Yes, quite a small one.
Vladimir Putin: That’s due to fodder grain shortages.
Sergey Ponkratov: Possibly.
Vladimir Putin: It certainly is.
Sergey Ponkratov: Thank you, Mr Putin. Can I tell everyone that the prime minister told us not to sell grain at less than 10 roubles?
Vladimir Putin: Don’t, or I’ll be assaulted and battered. Settle your own affairs yourself.
Sergey Ponkratov: They’ll never dare beat you up.
Vladimir Putin: But I would like you to make more money.
Sergey Ponkratov: Thank you. Mr Putin, may I ask another question? It concerns our prospective accession to WTO. Will we make it? And will you help?
Vladimir Putin: I’ll be honest: I have many concerns about it as well. It is particularly sensitive for such sectors as agriculture, especially livestock breeding. As for grain growing, we are fairly competitive producers. We expect an 85 million tonne yield. I’ve just been to France and I know they intend to harvest about 30 million.
On the whole, we produce for the world market slightly less than the entire European Union, ranking third for grain exports, led by the United States and the EU. We have experienced negotiators who secure good terms for subsidies, so we can increase them when necessary. There is a huge difference in subsidies between Russia and the West.
Sergey Ponkratov: They pay bigger subsidies.
Vladimir Putin: It’s hard to believe how much larger they are – 40 times larger, on the whole. Not that they benefit from those subsidies.
Sergey Ponkratov: They’ve grown too lazy.
Vladimir Putin: It’s not that. They just stop trying to enhance cost efficiency and so on. That’s why they are lagging behind in competition. The present-day arrangement of forces is beneficial to Russia. But you know our support measures – you named them yourself – in prolonging interest subsidies, in stock breeding, equipment, leasing, etc. As things are today, we have very many support measures. They calculate support by hectare, and certain Russian experts insist that we do the same. But this method is egalitarian, not targeted. It reminds the Soviet approach. Still, we should think it over – I don’t mean we should not introduce it but we must first weigh all pros and cons. On the whole, however, we should be concerned about what might follow.
I repeat, we have secured everything we were insisting on so far except one position – our market openness to meat imports. They demand that we preserve the present terms while we will not consent to it, just as we will not agree to the terms they are offering us. That’s the line beyond which our concessions will not reach. That’s what we said to them. The talks will go on but we will never accept terms that might harm our agriculture. We will continue negotiations until we arrive at mutually acceptable options. I repeat, only one agriculture-related item on the agenda remains unresolved – the access of foreign meat products to the Russian market.
Sergey Ponkratov: Does this concern our accession to WTO?
Vladimir Putin: Yes. The Europeans are insisting on this point the most, as well as the Americans.
There is also an industrial issue – the so-called industrial assembly. It mainly concerns the auto industry. Our demands are getting stricter here. When a foreign manufacturer wants to get a foothold in Russia, we want it to produce no less than 300,000 cars [a year] and localisation – that is, car part manufacture in Russia – not to be below 60%. This means that a part of production assets must be based in Russia, or we will not benefit from the partnership.
Sergey Ponkratov: Not that they are eager to consent.
Vladimir Putin: That’s right. What does the arrangement imply? It means technology transfer to Russia, and creation of new well-paid high-tech jobs and of a basis for Russia’s own cutting-edge auto industry. That is the road we have embarked on. Manufacturers have already consented to it, and are working on such terms and signing new contracts, while coordination is still in process at the bureaucratic level, at which we have not yet come to an accord.
As I said, the other issue related to agriculture concerns meat products. Rest assured, we will work on at it, and we will not make unjustified concessions.
Sergey Ponkratov: Thank you.
Vladimir Putin: We are doing it for you and for our consumers, not for people employed abroad though we have the utmost respect for them.
Sergey Ponkratov: Mr Putin, I asked this question because various opinions are expressed in the media, and this is a matter of great concern to us, I think. That was why I asked you about it for first-hand information. Thank you very much.
Vladimir Putin: I think that all concerns expressed in the press, in everyday conversations and expert discussions deserve to be considered, because the majority of people who talk about it are really interested. True, there is also some empty talk, but we listen to serious people, interested professionals, who make up the majority. They deserve our full attention. There are objective and well-grounded concerns. We know them and we will work to settle them.
Vladimir Peshkov: Petrol stations are now selling Euro 3 and Euro 4 petrol while we still have machines and vehicles that need far smaller octane numbers. Meanwhile, Octane 80 petrol is no longer produced and its stock is running out though other fuels would harm our equipment. Should we remake our machines, or what should we do?
Vladimir Putin: Come what may, we should switch to state-of-the-art equipment, which will be environmentally friendlier and more efficient. Such equipment demands high-octane petrol. We are asking oil producers and processing plants to gradually switch to such petrol, but they are marking time, you know. Outdated farm machines are a problem we all share. The Armed Forces have the same problem, and they cannot update their technology overnight – necessary purchases would require huge government money. Still, we have to move in that direction, or we will lag behind the world.
We have established the Customs Union of Belarus, Kazakhstan and Russia, and the Common Economic Space. It means that our borders will be obliterated. The state clearly stands to gain as the market of your and other products will be expanding – but only if your commodities are competitive, that is, of better quality and at lower prices. That will never be achieved with outdated equipment, so we have to invest in production. This is a long process. I know, however, that your company managers pay close attention to modernisation. I looked up references and I know that you invested 30 million in five years.
Sergey Ponkratov: Yes, we purchased a part of our livestock and equipment.
Vladimir Putin: You bought it in Germany, didn’t you?
Sergey Ponkratov: Yes, in Germany.
Vladimir Putin: Was it livestock?
Sergey Ponkratov: Yes, and equipment – tractors, for the most part. We have another problem now – the wear and tear of cars and trucks.
Vladimir Putin: The state is posing another goal, which we all share – you should enhance efficiency while the government should provide conditions for you to purchase new equipment. It is too expensive now, that’s clear. I have come to an arrangement with my colleagues, and they are drawing up new alternative patterns of purchasing new farm equipment, with preference for Russian-manufactured items of new generation and higher quality. Leasing will be the dominating pattern. We will promote leasing for farmers to afford new machinery.
Sergey Ponkratov: Will the arrangement concern vehicles?
Vladimir Putin: Yes. As for farm equipment, we are drawing up a scheme for scrapping it along the same lines as the Lada scrapping programme. You will be able to scrap old equipment but it has to be stricken off the register first. We are blueprinting the relevant procedures. We will take the first practical step on the programme next year by granting 3.5 to 3.7 billion roubles. We’ll see how things go and if the programme is a success, we will gradually increase its funding for farmers to purchase new equipment and thus take the edge off the petrol problem.
Sergey Ponkratov: Certainly. Our car manufacturers will also switch to engines that run on high octane petrol.
Vladimir Putin: Of course they will. We will collaborate with you in every sector, whether machine-building or agriculture. We cannot afford to lag behind.
Sergey Ponkratov: There are plenty of problems everywhere.
Vladimir Putin: There are, you’re right. What have we been talking about? You are an experienced man, one of the most experienced in your industry, and you know how things stood in the Soviet time. There was no result, however much money was invested. Meat and sausages were not available in cities. The only food the shops had was blue, bony chickens nicknamed “The Wings of the Soviets”. Now, everything is available. Russian-manufactured commodities are steadily improving their position in the domestic market.
Sergey Ponkratov: They are, because, as I see it, they are quality goods from the consumer’s point… Take ice cream: if you buy Russian, you’re sure to get the real thing for your money.
Vladimir Putin: I like ice cream too, and I make a point of buying Russian.
Sergey Ponkratov: We make quality food. Take poultry. Isn’t our chicken meat incomparably better than American deep-frozen chicken legs?
Vladimir Putin: The West overuses antibiotics. That’s its permanent problem. Now, contaminated vegetables have appeared out of the blue. Where did it come from? Nobody knows. I think it’s due to overuse of herbicides, which leads to mutant viruses and bacteria.
Sergey Ponkratov: They are using genetic engineering. They manufacture genetically modified products with crazy changes. God knows what these foods can lead to. We should treat nature with more respect.
Vladimir Putin: That’s right. It takes nature millennia to make a change man accomplishes within a season.
Sergey Ponkratov: Mr Putin, we don’t have only sorrows, we have our little joys as well. Our farm’s chief agronomist will marry our accountant in September.
Vladimir Putin: Good. Are there housing problems at your farm?
Sergey Ponkratov: No, things are all right, more or less. We employ 80 people, mostly locals. 98% of the staff are local people, who have homes of their own or inherited from parents. As for the agronomist, he has a one-room flat with all conveniences, remade from a part of our dorm…
Vladimir Putin: Where will the young family live after their wedding?
Sergey Ponkratov: That’s just what he asked me about, whether there are programmes for the social development of the countryside and to promote mortgage loans, and whether these programmes will develop.
Vladimir Putin: They certainly will.
Sergey Ponkratov: We will naturally help them and intervene for him…
Vladimir Putin: Does the farm build apartment buildings or one-story homes?
Sergey Ponkratov: He wants a cottage with a house plot, which he would tend in his free time.
Vladimir Putin: Let’s make him a wedding present, the three of us – you, the governor and I!
Sergey Ponkratov: I’ll talk it over…
Vasily Golubev: Me too.
Vladimir Putin: So that’s settled?
Sergey Ponkratov: Thank you.
Vladimir Putin: Will you invite me to the wedding? When is it due?
Response: September 24.
Vladimir Putin: Good, thank you.
Sergey Ponkratov: The housing problem is not so acute at our farm as the personnel problem, but that’s up to the manager…
Vladimir Putin: How far is your village from Rostov?
Sergey Ponkratov: It’s 45 km from our office to the Voroshilov Bridge.
Vladimir Putin: That’s practically next door. What about healthcare and school?
Sergey Ponkratov: We have a school and a kindergarten.
Vladimir Putin: A first-aid station?
Sergey Ponkratov: There is one, and another is being built. The existing station is excellent, it was connected to the water and gas pipeline in 1995.
Vladimir Putin: Does the village have gas?
Sergey Ponkratov: Yes. There is water everywhere, and utilities are utilities. Electricity prices are going up whether we like it or not. We hope, however, that even they will reach their ceiling someday. The most awful price hike was at the beginning of the year. That was a huge leap!
Vladimir Putin: Did you get them to bring it down?
Sergey Ponkratov: We did.
Vladimir Putin: So you felt it?
Sergey Ponkratov: At once.
Vladimir Putin: Thank God. It’s hard to deal with supply companies but I am glad to hear that there is a response, despite all.
Sergey Ponkratov: There certainly is, Mr Putin. There is only one matter that remains unclear – what does the electricity market mean to us, an agricultural production cooperative. Where can I buy electricity? Only from South Grid.
Vladimir Putin: They are an absolute monopoly.
Sergey Ponkratov: I’ll never buy it anywhere else – and they are telling me: this is at the market price and that at a fixed one. Things were like this last year, and are like this now…
Vladimir Putin: We have levelled out big and small consumers’ status. Did you know that?
Sergey Ponkratov: You mean night consumption and all that?
Vladimir Putin: Yes, large consumers were always entitled to discounts. This is natural because they consume more and have round-the-clock consumption. We decided now to equalise the status of big and small consumers. Prices were immediately reduced for small companies and slightly increased for large ones.
Sergey Ponkratov: Thank you, we felt it at once though we were rather pessimistic about it at the beginning. We receive bills for 240,000 roubles even when electricity consumption is quite small. I get angry about every unnecessary light bulb and replace conventional bulbs with energy-saving ones.
Vladimir Putin: We will monitor it as before. Price and tariff disparity requires comprehensive measures. It will be hard to implement them next year but, to all appearances, we will do it. I have said several times that all tariffs should be adjusted to inflation rates and so keep them in check.
Sergey Ponkratov: So they’ll grow 8%.
Vladimir Putin: Less, I hope.
Sergey Ponkratov: Excellent. So we’ll have indexation and the tariff growth will be reduced. Have I got that right?
Vladimir Putin: Absolutely.
Sergey Ponkratov: Wonderful!
Vladimir Putin: Let’s wait and see. Electricity companies complain that indexation will leave them no funds for development. We’ll see.
Question: I am a crop grower. My farm has 15,000 hectares of irrigated land in the Azov District, of which only 4,000 hectares is in use. We have 20-22 million [roubles] in annual grants but we cannot afford to work all of our land. Would you help us a bit for the Azov District, which is quite prosperous …
Vladimir Putin: Perhaps it was Mr Zubkov who set you on me?
Response: No, it wasn’t.
Remark: The thing is that irrigation water is very expensive in our area. Five stations pump water up the Don River to get it here. The job is funded from the federal budget. That’s our specific because our irrigation network was built in the Soviet years, so it consumes a lot of energy.
Vladimir Putin: I know. We will retain the previous amount of funding land improvement, and increase it a bit next year. Opinions differ, of course, on whether it is worthwhile. We will continue the funding even though we will have a complicated budget situation next year. As for your village, I will keep it in mind.
I’ll be going along now. Thank you.
Response: Thank you.