First Deputy Prime Minister Viktor Zubkov held a meeting of the Russian Government Commission on questions relating to the Agro-Industrial Complex.

Those participating in the meeting considered questions related to carrying out the obligations in the federal and regional budgets on financing measures that are part of the State Programme for the Development of Agriculture and the regulation of the markets for agricultural produce, resources and production for the period 2008-2012.

"The Government has allocated significant financial resources to the development of rural areas in 2009: 157.8 billion roubles. An additional 17 billion roubles has been allocated as part of anti-crisis measures to compensate expenditure connected with loans, and 8 billion roubles for fertiliser purchasing," the First Deputy Prime Minister said, opening the Commission meeting.

"Now, achieving the State Programme's target indicators and carrying out the tasks set depends on the Ministry of Agriculture and the regions of the Russian Federation working in an efficient and coordinated way," Mr Zubkov continued.

In connection to this, the First Deputy Prime Minister demanded that "resources are supplied from the Federal Budget to the regions in a regular and uniform fashion, and that sectoral programmes in the regions are co-financed by the constituent entities of the Russian Federation on schedule and in the amounts planned."

The statistical indicators for development in this sector cited by Mr Zubkov testify to the need for this. "In spite of the significant volume of resources allocated to this sector, the results after six months for the agro-industrial sector overall, although positive, are not high: there is only 1% growth," he said. The First Deputy Prime Minister referred to the disparity in co-financing contributions to the agro-industrial complex in the first six months: 94 billion roubles from the federal budget and only 11 billion roubles from the regional budget.

Among the most apparent reasons for such a disparity, Mr Zubkov mentioned the delay in passing the necessary legal framework on the federal and regional levels that would regulate the subsidising of the state programme.

The First Deputy Prime Minister paid particular attention to the fact that the regulatory framework for insuring the harvest was not ready. "This is a subject we discussed at the meeting in Orenburg chaired by Prime Minister Vladimir Putin. It is the same with milk. The documents agreed have still not been submitted to Government. As a result, 3.5 billion roubles remain unallocated for the 8th month," Mr Zubkov summarised.

"The reason for this is to be found in the way the work is organised," he continued. The First Deputy Prime Minister called for closer cooperation between the Ministry for Agriculture, dairy producers, and small and medium business. "This kind of work is already underway in several regions and there the producers are selling milk at 16 roubles," the First Deputy Prime Minister stressed.

Mr Zubkov drew attention to the significant volume of financial resources from the federal budget that was not used by regions. "As of July 1, 2009 this sum amounted to nearly 11 billion roubles," the First Deputy Prime Minister said.

In connection with this Mr Zubkov suggested considering the possibility of re-allocating these resources for use in those regions which "are using the budget allocations effectively and according to plan, allocating their resources to the development of agriculture".

The First Deputy Prime Minister also underlined the importance of keeping a reasonable balance in co-financing between the federal and regional budgets. "We expected it to be 70% to 30%. After the first six months it is 90% to 10%," he said.

"The volume of financing from different budgets makes it incumbent on us to carry out the measures set by the state programme without exception. This is a government document that no one has changed, and which has not been amended," Mr Zubkov emphasised.

The discussion held will be continued at a meeting looking at questions relating to the implementation of the state programme in the first half of 2009, which Mr Zubkov will hold on August 11 as a videoconference.