Opening remarks by Prime Minister Dmitry Medvedev:

Today we are holding the first meeting of the newly appointed Government Presidium – a format we are going to use whenever it is appropriate or advisable.

Today we are going to review the results of the spring field work and discuss what we can do to support the development of the national agriculture industry.

On the whole across Russia, the spring work is on schedule, despite many regions suffering from an excessively dry spring. The spring crops that have been sown, together with the winter crops, will add up to a greater area to be harvested this year compared to last year. Our farmers sowed more rape, soybean, corn and certain other crops. The figures for vegetable and potato crops are the same as last year’s. It is good that the amount of animal fodder stocked is over 10% higher than at the same time last year (that really is impressive) and the seeds stored for next year’s winter crops are of a higher quality.

These results have been achieved thanks to the hard work of millions of people – people living in rural areas. The government’s effective support of the industry has also been an important contribution. As you know, we successfully protected farmers against the repercussions of the financial crisis and the drought that occurred two years ago; they managed to avoid a fall in production. It is important now to focus on the problems which manifested themselves during the spring sowing and the early preparation for the autumn sowing.

Let’s discuss this in more detail.

Perhaps the most sensitive issue for agricultural workers is the supply of fuel and lubricants. They bring this up at every meeting. The government has given them discounts on them for a third year. They will enjoy a 30% discount until the end of June. According to the Energy Ministry's estimates, this discount has helped agricultural producers to save and invest in their own production about 12 billion roubles. Obviously, this discount should enable them to remain competitive both on the domestic and foreign markets.

In this context, I’d like to instruct the Ministry of Agriculture, the Ministry of Economic Development, the Ministry of Finance and the Energy Ministry, in cooperation with the Federal Anti-Monopoly Service, to complete the elaboration of the final decision on the amount of this discount as soon as possible. You should submit it for signature before the end of this week – this decision must become effective on July 1.

The second issue for agricultural producers is the purchase of mineral fertiliser. In the last few years the government has also kept an eye on the prices and has made up for some of their expenses on mineral fertiliser and chemical products. The federal budget has allocated more than five billion roubles for this purpose this year. Unfortunately, fertiliser prices are growing although they remain within the parameters set by the agreement between the Russian Association of Fertiliser Producers and agrarian companies. These prices have increased by 12% since last June. They may increase sharply in the beginning of next year, when the cost of fertilizer will be determined by the world market and seasonal demand. An effective mechanism of support for agricultural producers is essential in these conditions. I’d like for it to be established before the end of the third quarter of this year and a relevant proposal to be submitted to the government.

Third, it is necessary to insure against the risks of agricultural producers. In 2009 a draught hit 16 regions, and in 2010, 43 regions of the country. In 2010 it killed crops at one third of the sown area. Direct damage to the industry totalled 42 billion roubles – 17 times more than in 2009. I hope that the normative acts we adopted last year – and I personally dealt with agricultural insurance – better meet the requirements of agricultural producers.

Although the state makes up for half of their insurance costs, the number of loans is still low.  According to the Ministry of Agriculture, not even one tenth of spring crops have been insured and 34 regions have not signed a single insurance contract with government support. This is bad. We must develop a culture of risk management. The Ministry of Agriculture, regional authorities and insurance companies themselves should conduct explanatory work and supply farmers with relevant information.

I know about another problem – some insurance companies fail to pay. It is necessary to review such cases on a case-by-case basis, involving monitoring agencies and law-enforcement bodies, if need be.

And the last point. In August Russia will become a fully-fledged member of the World Trade Organisation. The goal of the state is to prevent the worsening of conditions for the domestic agro-industrial sector, on the one hand, and to find better ways of promoting our agricultural produce and foods in general on the foreign market, on the other. I’m going to discuss this with experts soon, but now, let’s get to work.

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