3 july 2009

Prime Minister Vladimir Putin, who is on a visit to the Krasnodar Territory, inspected the wheat harvesting at the village of Vyselki

Mr Putin also visited a wheat field of the Agrocomplex Company and a field kitchen.

Transcript of Mr Putin's meeting with the company's managers and combine harvester operators at the field kitchen:

Mikhail Skakun, director general of Agrocomplex: Mr Putin, please join us for lunch.

Vladimir Putin: Prepared from local produce?

Mikhail Skakun: Yes, everything has been locally produced, from vegetable filled pies to meat. Everything is ours and always very fresh. Every day, we slaughter some 40 bulls, 150 pigs and 70,000 chickens at the animal breeding farm.

Vladimir Putin: When have you started the harvesting campaign?

Mikhail Skakun: We started harvesting wheat three days ago. It has been raining, so we have only harvested 8% of the total. We also need to pick peas on 3,200 hectares and harvest wheat on 36,000 hectares. The average wheat yield is so far 55.

Vladimir Putin: And last year?

Mikhail Skakun: Last year it was 68. But we are now harvesting early ripening wheat. It is not fully ready; the head density is mid-dense right now. So, we are not gathering in as much as we can. Medium- and late-ripening varieties promise a better harvest.

Vladimir Putin: Are the prices of fuel and lubricants growing?

Mikhail Skakun: Yes, but we are complying with your instructions and have raised the prices to 15-15.80 roubles from, I think, 13 roubles. We use 1,200 tonnes of diesel fuel and approximately 1,000 tonnes of petrol every month. This is a lot for us.

Vladimir Putin: So, the resolution has had its effect?

Mikhail Skakun: Yes, it did, certainly.

Vladimir Putin: It has helped you?

Mikhail Skakun: Of course. In the past, prices [of fuel and lubricants] grew as soon as we started the harvesting campaign. Sellers played on our fuel requirements, sometimes hiking the prices considerably.

Vladimir Putin: But you have restrained them this year?

Mikhail Skakun: Yes, we did it this year, thanks to you.

Vladimir Putin: Do you take out loans?

Mikhail Skakun: Yes, we do, as much as we can. Our loan portfolio currently amounts to some 2 billion roubles, and even this is not enough.

Vladimir Putin: How much do your workers earn?

Mikhail Skakun: It depends on the volume of threshing.

E. Dolgov, a combine operator: Our wages depend on threshing, but we also receive our pay in kind. Last year we received 24 tonnes of grain.

Mikhail Skakun: This amounts to some 80,000 roubles.

E. Dolgov: In addition to the regular wage.

Vladimir Putin: So, how much is it?

E. Dolgov: If we count at the price of wheat [last year], it is 160,000-180,000 for the harvesting period.

Vladimir Putin: Do you use the services of agroleasing?

Mikhail Skakun: We have settled out debts for the lease of agricultural machinery, and are now pondering [the need to lease more]. If the crisis goes on... But it is better for us now to take out loans.

Vladimir Putin: Even though we subsidise 80% of the cost?

Mikhail Skakun: This is very good, but calculations show that the price grows by 10%-11% if we lease machinery.

Vladimir Putin: So, it is cheaper to take out loans than to acquire machinery under lease contracts?

Mikhail Skakun: Yes, because their interest rate is the same as in a bank. Recoupment is stipulated, but then we have to make on-off payments - 3%, and another 5% calculated from the annual balance, which brings the total to 10%. If I lease machinery worth 100 million roubles, I will have to pay them 11 million roubles more.

Vladimir Putin: Of course, you should calculate everything very carefully. Did you lease these combine harvesters?

Mikhail Skakun:  No.

Vladimir Putin: But you leased these harvesters, from the Rostov plant, right?

Mikhail Skakun: No, we bought, and not leased 10 combine harvesters last year. We took out a loan for 10 John Deere combines (tractors) and attachments for them. We believe that machine-building is the weak link of our agriculture.

Vladimir Putin: Ms Skrynnik (Agriculture Minister Yelena Skrynnik), if I may for a moment. The farm manager said it is more expensive to lease machinery than to buy it on loans.

Yelena Skrynnik: I can explain. You leased the combines some five years ago, right? This is because the current lease period is 15 years, with the price growing by 2% annually and 7% paid in advance. This scheme was introduced only two years ago. Before that, the price grew by 7% annually, with the advance payment amounting to 15%, and the lease term at five years.

Mikhail Skakun: Yes, five years and 5%.

Yelena Skrynnik: Exactly. We offered these terms five years ago. Then we cut the increase to 4%, and the current terms are 2% per annum and 15 years.

Vladimir Putin: We must think of ways to balance the conditions, because if it is cheaper to take out loans than lease machinery, we may have to reconsider the issue.

Yelena Skrynnik: At present, there are no 15-year loans, and the interest [on loans] will never be 2% even if we subsidise them by 100%. This is the crucial element.

Mikhail Skakun: Yes, there are positive elements. For example, we don't need to make a pledge.

Yelena Skrynnik: When you take out a loan to buy something, you pledge your acquisition. Besides, you should remember the lease period, 15. These are new conditions. You can request that your previous lease contracts, if you have not paid the lease in full, are reviewed. Many people do so.