Transcript of the beginning of the meeting:
Vladimir Putin: What's new?
Viktor Zubkov: Mr Putin, the prices for mineral fertilizers have sky-rocketed, increasing by almost 70% since the beginning of the year. In this regard, the Government has ordered that the Ministry of Industry and Trade and the Agricultural Ministry prepare their proposals and work together with fertilizer manufacturers' associations and agricultural producers to consider measures to rectify the situation.
After mutual consultations that determined the amounts of mineral fertilizers to be provided to the country's agriculture sector, fertilizer manufacturers' associations and agricultural producers signed a five-year agreement stipulating that fair prices for fertilizers should be maintained. This will involve the biannual monitoring of: prime costs, the profitability of fertilizer manufacturers, and inflation growth, to be performed on November 15 and May 15. These activities will result in adopting stable prices for all consumers of mineral fertilizers on the domestic market.
We believe this is a good step, since mineral fertilizer manufacturers are now aware of the annual amounts they are to supply to the domestic market. These volumes are constantly increasing; by 2013, we will reach a total of 3 million metric tons of mineral fertilizers.
With stable fertilizer prices, agricultural companies will be able to plan their activities well in advance, set aside necessary finances for the purchase of mineral fertilizers up to six months in advance. For this reason, we find this agreement to be very important, not to mention the fact that this is the civilized market approach widely practiced in Europe.
Elaborating on this experience, we will continue our work in this respect so that agricultural producers and food retail chains could reach similar agreements; if farmers and food retailers manage to work out mutually acceptable accords, the food prices could go down.
Vladimir Putin: I am very glad to hear this, since this instruction was given quite a while ago. I am pleased that the Government has managed to reach such agreements with your assistance, Mr. Zubkov. The situation with fertilizer prices in the past few years has in no way been fair to agricultural producers - especially considering the fact that fertilizer manufacturers were receiving cheap raw materials on the domestic market and enjoying the benefits of exporting their products.
Such agreements should have been reached long ago. I am confident that the changes will be of great benefit not only to the agricultural sector, but also to suppliers of raw fertilizer materials and fertilizer manufacturers, who will see an increase in their production volumes.