Vladimir Putin's opening address:
Good afternoon, colleagues.
I was in the Rostov Region yesterday, and I think some of those attending this conference were there too. We attended the commissioning of the second reactor of the nuclear power plant there and discussed the problems in the nuclear power industry. It could be considered a routine event, but it was definitely one of those events that help build the foundation of the power industry and Russia's economy as a whole, as energy is the foundation for economic development.
Today we will discuss another, no less important sector, agriculture, which employs 40 million people in one way or another.
We are going to determine whether our agricultural enterprises are ready for the spring sowing campaign.
Over 100 billion roubles will be allocated from the federal budget to support agriculture in 2010. Of that amount, 25 billion roubles will be spent on the spring sowing campaign.
Early this year representatives of the farming business complained, with good reason, about high interest rates on loans, 17% and sometimes even 18%. These are not just high interest rates; they are impossible interest rates for some enterprises.
Regarding this issue I can say that Rosselkhozbank has decided to lower the interest rate on short, seasonal loans to 12%. Moreover, 80% of this interest will be subsidised by the federal budget. We have decided to allocate 13.7 billion roubles for this purpose.
In 2010, we plan to sow 78 million hectares. Of that amount, 18 million hectares have already been sowed with winter crops. This means that we have not decreased the areas sown with crops this year.
Moreover, some 90% of the winter crops are doing well, which is very important because winter crops, as you know, are highly effective economically.
According to the Ministry of Agriculture, the provision of seeds has been commendable. The farms have nearly enough seeds for the sowing campaign.
Assistance will also be provided from the federal budget to compensate part of spending on chemicals. It will be smaller than last year but still considerable, 4.7 billion roubles.
Moreover, an agreement put forth by the government has been signed by chemical companies and Russia's Union of Agribusinesses. It has allowed us to maintain acceptable fertilizer prices.
Prices for compound fertilisers have been kept at last year's level or cut by 15%-18%. However, I'd like to draw the attention of the Ministry of Agriculture to the following. Mr Zubkov (First Deputy Prime Minister Viktor Zubkov), I would like you to work with chemical companies on this, because for some fertilisers and in some regions, prices for ammonium saltpetre, urea and agricultural salt have gone up.
We have negotiated agreements with producers, helping them during these tough economic times, and we've agreed to develop long-term relations. I'd like you to take this into consideration.
Another sensitive issue for agriculture is the price of fuel and lubricants. As you are well aware, in the past we sometimes saw seasonal price hikes, in particular during the spring sowing campaign.
The government has taken a decision that should stabilise prices for high-demand fuels during the spring sowing campaign: farms will receive a 10% discount on the wholesale price of fuel.
We need to monitor prices. If prices in some regions were jacked up and then cut by 10%, the final result is the price has not changed. So I'm asking you to take this into account when monitoring the situation in the regions.
I expect the Federal Antimonopoly Service and the Ministry of Energy to inform us about the implementation of that decision.
A few words about the maintenance of agricultural machinery. According to available information, 85% of it is ready for the season, which is good. However, depreciation of farm machinery is still considerable, which means that we must address this problem while at the same time keeping costs down as much as possible.
One more thing: Last winter was quite unusual, and there is still snow in a majority of regions. As farmers say, this is a "late spring," or is it a "late winter"?
It is now snowing in Moscow. A snowstorm in a city means that we need to deploy snowploughs quickly. In the countryside, it could mean that the spring sowing campaign will be postponed. Moreover, the schedule must be adjusted without delay so as to avoid other potential problems.
Therefore, let me remind you that efforts must be carefully coordinated at all levels.
Good afternoon,
Today I propose discussing both current and systemic issues regarding the development of the agro-industrial complex.
The first issue is crop insurance. We have talked a lot about this in Moscow, at meetings with regional and local leaders, and directly with agricultural producers -- with managers and owners of companies.
We still have this archaic system of using federal funds exclusively to cover the losses of agricultural companies due to draught and other force majeure events. Everyone expects this practice to continue. And then all we hear is complaints of insufficient coverage. Modern market mechanisms are hardly used at all.
When I met with agricultural producers, many of them said that we need to make transition to an insurance system. Needless to say, this will require additional spending, but it will be worth it, as it will stabilize production.
However, this transition must not destroy the farming business. But it is essential that we make this transition.
I expect to hear a detailed report today from the Ministry of Agriculture on the implementation of the government directive on improving the agricultural insurance system. How many crops will be insured this year? This is the question.
The next problem is the quality of planning and regulation in the agricultural market. Consistent large harvests are certainly good, but they become meaningless if nobody knows what to do with them or if they result in a collapse of crop prices.
We saw how, in the past few years, wholesale prices for agricultural producers have fallen without reducing retail prices for consumers.
We must know exactly what we produce and how much, what domestic demand is and what export opportunities we have.
Balancing production and consumption is the responsibility for the federal government. Federal bodies must not shift responsibility to regional bodies, nor encourage them to artificially lower production.
The problem should not be reduced to the simple formula "produce what you consume". This would be wrong. We have a common market for the entire country and we must support exports financially, administratively and even diplomatically. All countries do this.
Moreover, bolstering agriculture, including its export potential, is one of our key strategic priorities.
We need to think of ways to make of our agro-industrial complex more competitive. To do this we need objective information on the dynamics of costs and spending reductions in agricultural production. The Ministry of Agriculture must ensure that this monitoring is performed.
I am also requesting that you report on the planned parameters for prices on agricultural products. Under the Law on Agriculture these prices are to be announced this March.
Prices for sensitive products like grain and milk are particularly important. Agricultural producers need a clear sense of their prospects in order to plan out their work.
This year we also need to ensure that livestock production continues to grow, including poultry. We have discussed this issue extensively over the past few months in an attempt to square our domestic production requirements with the need to guarantee appropriate prices and import levels.
Expanding domestic poultry production also remains a priority. This means that we need to change the structure of our cropland to increase the share of land used to produce high-protein fodder.
Another important task is import substitution in favor of the domestic production of sugar (sugar beets). A programme to develop the sugar industry has been developed in accordance with a government directive. I'd like to hear about the preliminary results of this programme today.
Let's begin our discussion.
Prime Minister Putin's closing
remarks:
To sum things up, the situation is satisfactory on the whole. Weather conditions are worrisome, and so we need to carefully monitor the situation to be prepared to respond to weather conditions in the fields.
I won't dwell on what has been mentioned today repeatedly, namely the need to more rapidly expand livestock and poultry production and related issues, such as changing the composition of croplands.
Almost all of our colleagues raised these issues today. I will focus on some more topical issues instead. The most pressing is preparing for the spring sowing season. We have drafted a package of directives already. On this point, let me stress once more how important it is to monitor the implementation of decisions.
I am requesting that the Federal Antimonopoly Service review the pricing of petroleum, oil, lubricants and mineral fertiliser in the regions. Each region and each group of goods related to agriculture must be examined.
I am also asking that our colleagues involved with the energy industry settle this issue with our oil companies. But this alone is not sufficient. Rosselkhozbank has decided that it will not be the sole lender to the agricultural sector. Therefore, the Ministry of Finance and the Ministry of Agriculture must review the situation with lending and finance.
I would like the Federal Antimonopoly Service and you, Mr Zubkov, to prepare a report on the progress made in this direction and to deliver it at a government meeting. You have one week to prepare the report and then present it at a government meeting or government presidium meeting. We must put the practical changes we've discussed here into effect in government offices back in Moscow.
There is no doubt that the government has the tools -- including some very powerful tools -- to accomplish its objectives. We must be consistent, persevering and aggressive where necessary. There's no need to raise our voice or pound our fists. Again, the government has very effective tools to address the challenges it faces. Let's get it done.
Thank you for your attention.