Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, colleagues!

Today our country, and I believe many other countries in the world, celebrate Teachers’ Day. I would like to congratulate all the teachers of Russia on this holiday and wish them the very best.

I will continue our discussion here in a government setting but in a less celebratory manner. As you know, we have been working on a programme of modernisation of school education for several months now. We have allotted substantial resources from the federal budget (60 billion roubles for each academic year) and have ensured the timely distribution of the necessary funds to the Russian regions. According to our reports, teachers in 44 regions receive a monthly salary that is close to the average regional wage. The average salary for teachers in 38 regions will have grown by 30% – by at least 30% – in September. But we continue to hear from the other regions that the work has not been completed within the proper timeframe.

I would like to ask the Ministry of Education and Science and the Acting Finance Minister how they view the situation. This is the first point. The second point is: we have decided to increase student allowances, and have allocated – again, in a timely manner – the necessary funds from the federal budget. We have agreed to expand the funds for student allowances by 9%. However, this has not yet been done at some universities. The logical question is why? By the way, students keep addressing me with this question.

I suggest that we begin with the Finance Ministry’s report on the distribution of these funds. Go ahead, please.

Anton Siluanov: Mr Putin, we certainly are monitoring the implementation of the budget by the regional authorities, including the pay raises for teachers and public sector workers. According to the reports that we received from the regions, teacher salaries were increased in 81 regions as of September 1. In two regions, their salaries were raised even earlier. In 32 regions these salaries have grown by 30% and more. In 27 of Russia’s regions, teacher salaries have been raised by 20% to 30%. And the amount of funds that the regions have spent for this purpose since the start of this year totals some 21 billion roubles.

According to on-the-ground reports, the regions have earmarked the necessary funds and have adopted appropriate resolutions. Why is it that, according to the information that you have, employees in some of the regions are still waiting to get their newly adjusted wages? Well, perhaps, it’s just that fresh information hasn’t come in yet. A salary raise starting in September requires payroll recalculations, which usually continue into October, on October 5, as a rule. So, probably, regional authorities still don’t have complete information available to them on all the schools in their respective regions.

As for pay increases for public-sector workers on October 1, we’re monitoring the situation here as well. Sixty-six of Russia’s regions have already adopted relevant resolutions.

Vladimir Putin: By another 6.5%, you should say.

Anton Siluanov: Yes, by another 6.5%. Sixty-six of Russia’s regions have decided to go ahead with such an increase. The amount of additional spending totals about 18 billion roubles. So the additional financial burden on the regions comes to 40 billion overall. After we assessed the regions’ potential for raising the wages of their public-sector workers and schoolteachers, we came out with a proposal on financial aid to the least prosperous. Such assistance should be provided depending on each region’s capacity to cover those additional expenses. We take a case-by-case approach, offering enough aid to cover between 30% and 100% of the expenses. We’ve considered relevant proposals within a trilateral commission involving members of the Federation Council and the State Duma, and are going to submit them to the government later this week.

Vladimir Putin: What do you have to say, Mr Fursenko (addressing Andrei Fursenko, Minister of Education and Science)?

Andrei Fursenko: First of all, speaking of wages, we also keep monitoring the situation. In all of the regions, advance payments were made in the period between September 20 and 25, most of them upgraded. And by October 15, the September wages are to be paid out in full.

We’ve received only five complaints over the whole period –  not too many. And we’ve checked up on each.

Some people complain about not having benefited from the 30% raise. We made it clear at the very start that not every schoolteacher would have his or her salary increased by 30%.

We normally interact with regional authorities, but given that inquiries do come in, we’ve decided to set up a hotline at the ministry and spread the word about it, so that anyone interested can address the federal agency as well as authorities in his or her respective region. Once again, I’d like to confirm Mr Siluanov’s words that, as far as we know, the required money has been disbursed and all the necessary measures to raise teacher salaries have been taken. We check up on each of the complaints we get. To the best of our knowledge, though, there’ve been no failures to fulfil the assignment…

Vladimir Putin: I have a request for your ministry and the Ministry of Finance. Please hold a phone conference with the regions one of these days and try to identify all the incidents, if any, of failure to carry out the assignment. All of them. And then report to me, if you will, which of the regions have failed.

Andrei Fursenko: Now I’d like to move on to student stipends, if I may.

Vladimir Putin: Please do.

Andrei Fursenko: Money for increasing student stipends has also been disbursed on time. Under existing regulations, the distribution of student aid shall be the prerogative of college and university administrations, and we brought that information to their attention [at the very start]. But when questions began coming in, we sent out one more letter, in which we indicated all specific regulations that don’t just entitle but obligate college and university administrations to address issues related to student stipend increases. Eight-six percent of the colleges and universities reporting to the Ministry of Education and Science have decided to increase the minimum rate by 9%, to 1,200 roubles, up from 1,100. Whereas the remaining higher schools have chosen to differentiate, increasing aid primarily to the best achievers who are disadvantaged economically.

Schools are free to decide which way they want to go about it. At all of them, the administration has made related decisions in cooperation with students as well as with student unions.

As for us, we look into each individual case. And after those questions came in, we promptly responded by performing a check, and all the colleges and universities then confirmed they had made their decisions. We’re going to collect all relevant information shortly, Mr Putin, and then we’ll be able to report to you on each individual university.

Vladimir Putin: Look, they report to you that they have made all decisions, and then students keep writing to me that they are not receiving this additional 9%. So I ask you to look into the situation once again, thoroughly – revisit the issue and find out what is done where. Yes, higher education institutions can take this or that decision within their competence, but the funds from the federal budget must necessarily be allocated towards exactly these goals and no others. And I will be asking the Audit Chamber to pay attention to this issue and to find out how the funds are being distributed.

The amount is not that big, but it is still a significant sum for young people, or even if it’s not significant, it’s at least something, you know? It would be unacceptable to deprive them of this aid. I request that you pay special attention to this issue. There should be an administrative response.

I repeat: higher education institutions have the right to take certain decisions on the use of these additional resources within their competence, but they should be allocated for these purposes and no others. You must take another look into this issue. Alright?

The new, unscheduled pay rise of 6.5% for public sector workers – I mean, all public sector workers – should also be finished so that you have complete information on what is going on in the field.

Mr Zhukov (addressing Alexander Zhukov), what about housing for young scientists? The federal programme on housing includes such a subcomponent. How are things going with it?

Alexander Zhukov: Mr Putin, colleagues, we have prepared comprehensive proposals for providing housing to young scientists and researchers. We are implementing three basic approaches. First, as part of the 2011-2015 federal housing programme, we are allocating funds for the purchase and construction of housing for employees, first and foremost young scientists and researchers. Initially, the allocation that we made to the programme for these purposes was two billion roubles, now we have submitted changes to the programme that are awaiting your signature. We propose that the funds earmarked for this type of housing be increased to four billion roubles, which will help provide housing to another 2,200 young scientists and researchers and their families.

The second approach of the federal housing programme involves providing young scientists and researchers with social security benefits for the construction or purchase of permanent housing. We will issue housing certificates. The amount of the payment is calculated on the basis of the young researcher’s or scientist’s total living area, which is set at 33 square metres, and the average market value of housing. This measure will help about 1,500 families. The entire federal housing programme will help a total of 4,810 families.

The second approach also entails providing land for construction undertaken by cooperatives. A special law which allows for establishing cooperatives, including for young scientists and researchers, was adopted this past summer. We set aside free land plots through the Russian Housing Construction Development Facilitation Fund, equip them with the necessary infrastructure, and transfer them to cooperatives. At present, we are implementing a large project jointly with the Russian Academy of Sciences and the Russian Housing Construction Development Fund at the academy’s Siberian Branch. A 153-hectare plot was transferred to the branch, and its cooperative is carrying out a huge construction project there; this is a sort of pilot project. At the same time, a project is being developed that will not only make it possible for a cooperative to receive land but will also provide funds for a young family to start building.

The third approach is the expansion of rental housing. In order to decrease rent and increase supply on the commercial housing market, the Agency for Mortgage Lending is developing a number of programmes to build rental housing.

These three approaches, taken together, will allow us to completely solve the housing issue in the next three years.

Vladimir Putin: In the next three years? Good. This is a very important issue – keep control of the situation.

Mr Levitin, yesterday you signed an intergovernmental agreement on the construction of a bridge over the Neman River and a bypass road around the towns of the Kaliningrad Region. Would you tell us about it in detail?

Igor Levitin: Mr Putin, yesterday we signed the agreement in Lithuania. We prepared it over the course of a year. This is a new bridge over the Neman near the town of Sovetsk. A border checkpoint is located almost in the centre of the town: 150 cars enter the town daily and wait until they can cross the bridge. The Lithuanians confirmed their readiness to construct a road to the bridge that we are going to build. The project requires funds. And the proposal is as follows: as we no longer provide subsidies to regions due to the establishment of regional road funds, we will submit this project to the federal level and use funds form the Federal Road Fund, since the road leading to the checkpoint has a specific purpose. This will ease the environmental burden in the city. I reported to Mr Ivanov on the checkpoint: we will have to take an individual decision on it. The Lithuanians confirmed their willingness to build a road there.

Sergei Ivanov: It is true that having a border checkpoint in the middle of a town is no good at all. Therefore, beginning in at least 2012, we expect to start the construction of the first phase of the checkpoint, designed for the number of trucks estimated until 2014. And, during the second phase, we will expand this checkpoint if the freight traffic increases.

Alexander Zhukov: I believe that this is a decision of great importance, as the situation with border checkpoints is difficult in the Kaliningrad Region. But an international agreement has been signed here as well…

Sergei Ivanov: International obligations.

Alexander Zhukov: We have undertaken international obligations and we must honour them. In addition, the environmental conditions in Sovetsk are very poor.

There is a second issue; I do not know whether or not Mr Levitin will address it: it has to do with Kaliningrad. We also have an international obligation for the village of Rybachy on the Curonian Spit. We have also signed an international agreement: our neighbours have done everything, but this checkpoint has not been included in the programme. I think we need to look at this and this may require changes, too.

Sergei Ivanov: I have concrete proposals if I may.

Vladimir Putin: Go on.

Sergei Ivanov: We have a modern vehicle checkpoint on the Curonian Spit. Not a single problem exists there. What I’m referring to are tourist yachts….We have opened the Curonian Lagoon for international seafaring. The proposal is to create a small checkpoint operating on a temporary basis there so that when a yacht or a tourist ship arrives, the border guards and customs officers, who work two kilometres away at the vehicle checkpoint, can come to this new checkpoint, perform customs clearance and border control, and then return to their post, as there won’t be constant daily traffic.

Vladimir Putin: Prepare your proposals, please.

Mr Levitin, what has been done to carry out my instruction to boost flight safety?

Igor Levitin: Mr Putin, following the president’s instructions and the instructions you issued at the meeting on flight safety, we have almost finished agreeing a number of documents which are now being coordinated with other federal bodies, and we will submit them in accordance with the established procedure. But what we need is an approved regulation on airline licensing. This regulation would establish a minimal number of aircrafts required for the airline fleet.

Vladimir Putin: We have already discussed it. It is not about the fleet numbers. An airline can have only one aircraft, but it must provide its own pilot training and be equipped with flight simulators. There is a series of requirements. If an airline has only one aircraft but it meets the requirements, let it operate its lone aircraft. But the requirements must be very strict. An airline may have 100 planes and not a single flight simulator for its crews. Should we allow such companies to operate? It cannot make sure its pilots hold sufficient qualifications.

Igor Levitin: Mr Putin, the requirements will be equal for all airline companies regardless of their aircraft numbers. But the number of operating aircrafts is also important because the airlines must have a reserve in case of maintenance work on another aircraft, temporarily putting it out of commission. Therefore, the resolution was: the minimum of wide-body aircrafts (55 seats and over) operating on regular flights must be ten, while the minimal fleet number is three aircrafts. We did not increase the figure, it remains the same. But the requirements for the crews and planes will be equal across the board for all companies. This includes appropriate retraining, flight simulator training, and several proposals on equipping pilot schools with simulators, all of which has been agreed upon.

Vladimir Putin: I recommend you review the requirements with respect to airline licensing and continuous control over airline operations. Eliminating administrative barriers in any other area is one thing, while transport security is a totally different issue. The requirements must be stricter. Please see that they are reviewed.

Igor Levitin: These are the pieces of legislation that we have drafted for consideration by the government. We are finalising the conciliation process.

Vladimir Putin: Do you understand what I was just saying before, though?

Igor Levitin: I understand.

Vladimir Putin: I am talking about the specific flight conditions of various climate zones and areas of increased air pollution and other issues related to timely training and retraining of pilots, among other things. These aspects must be thoroughly reviewed. We must not view all industries as alike and address them with a uniform approach.

Colleagues, now shall we look at the results for the agricultural industry (this is where we started working from today) so far?

I will remind you that we approached this harvesting season with certain expectations. Our goal is to compensate for last year’s decline (and the difficulties faced in the two preceding years) in farming. We set a task for ourselves to reach levels that would be sufficient for domestic consumption and that would restore our strong position in the global market. To reach this goal, we have increased government support of the farming industry and extended the discount period for fuels and lubricants. We have allotted the money to purchase farming equipment from the Rosagroleasing stocks with a 50% discount and thus replenished the park with some 6,000 units. Speaking of which, Ms Skrynnik (Yelena Skrynnik), I have visited some of the regions, including Russia’s Far East. The Rosagroleasing storages in the Far East were virtually empty: only two units for the entire Far Eastern region. I instructed that the machinery be redistributed from the reserves of other regions. Have you taken care of this?

Yelena Skrynnik: We are doing this.

Vladimir Putin: Please finish it by all means.

Yelena Skrynnik: Of course, Mr Putin.

Vladimir Putin: But in general, farmers purchased 6,000 units of equipment with a 50% discount. Moreover, our largest banks with state participation, such as Russian Agricultural Bank and Sberbank, have covered the industry’s loan demands. They have invested 155.6 billion roubles.

Now we can definitely state that the measures we have taken were successful. In spring, farmers cultivated 50.5 million hectares (about 125 million acres) of land, which is 3.6 million more than last year. Cultivated lands were expanded for all crops.

As of today, October 5, the grain harvest is 90 million tonnes, which is 30 million tonnes more than on the same date last year. We have harvested 88% of the area. There is still a possibility that we will see even larger crops.

We expect a total of 95 million tonnes of crops this year, with wheat harvest amounting to 60 million tonnes, 18 million tonnes more than in 2010.

What does it mean? It means we reached the goal we set for ourselves. It means that such a substantial reserve will cover both the domestic demand and the reserves required for the next year, thus restoring Russia’s position in the global market.

In this regard, I would like to say thank you to the workers of the farming industry. This is an excellent result! I would like to highlight that more than anything else, the domestic farming industry must satisfy the needs of the Russian market and facilitate its steady balance, particularly, in terms of costs. We must only export the excessive grain harvests. Based on this assumption, the government will gradually resume supportive measures in order to secure the position that our grain producers held previously in the global market. But I will repeat it once more: domestic consumption is a priority.

Speaking of the harvesting season, I should note that we have record crops of sunflower seeds, soybeans and rapeseed. For example, this year’s sunflower seed harvest is eight million tonnes, which is one-and-a-quarter times as large as the 2009 harvest. This year’s potato and vegetable harvest is also significantly larger.

We have an excellent forecast for the white beet harvest. We expect a harvest of 40 million tonnes, which is twice as large as last year’s. It is the first time we have reached such a high level. Moreover, for the first time Russia has started exporting sugar. We have already delivered some 50,000 tonnes of sugar to foreign consumers.

I must stress: the harvesting season is not over, and the same goes for autumn sowing, which means we must insure the farms have all the necessary equipment, fuels and lubricants, seeds and fertilisers. I ask the ministry and the regional officials to oversee the situation continuously.

Moreover, we must further work on the accessibility of seasonal loans for farming enterprises. It is important for farms to finish work on time.

I will stress again that this year’s crops will not only close the existing gap but serve as a basis for future results as we can now raise the bar for the next year. Therefore, I expect that the industry is just as well coordinated for further years.

This year’s results have shown that the Russian farming industry is becoming steady and well-balanced. We begin to extend the production range and make changes to the system of the rural economy, which means there are new prospects and new standards of living for the people working in the rural area and new prospects for the steady supplying of the big industrial centers. This is our main objective: to ensure a good quality of life in the rural area and to supply affordable domestic produce to big industrial cities. We must continue this work.