Transcript:

Dmitry Medvedev: Colleagues, the issue that has brought us all here is very important and meaningful for a third of this country’s population, and this is no exaggeration. This means millions of Russians who live in rural areas. We are going to talk today about rural social development.

Nearly 40 million Russians live in rural areas. I have to say that decent living conditions are certainly a key to these areas’ development as well as for growth in agricultural production. Rural Russia happens to be more than groups of houses and public services – it is actually a lifestyle. On the one hand, this presents a certain problem for us: it is common knowledge that most countries have 5%-7% of the population engaged in agriculture, compared with one-third in Russia. On the other hand, this is also an advantage, because this makes Russia – potentially – the world’s largest and most powerful agricultural nation. Russia boasts almost 10% of the world’s croplands. That’s why rural life is so much a part of the national culture and an important component of Russia’s uniqueness. Therefore, no government programme is ever enough to promote social development in rural areas, although these programmes are very important, too. It is essential that everyone is involved in this process, including local elected authorities and the public in general, including local intellectuals. Everyone should participate; otherwise we are not going to get any social development in rural areas.

Allow me to say a few words about what has been done over the past few years. As you can see, I am not reading from a script, because I am very familiar with the situation firsthand. I have been personally addressing this problem since 2005 when I came to work in the government. We worked on this as part of the programme Rural Social Development until 2013, which has been extended. Even then, we managed to achieve some change, such as developing the rural infrastructure, building more schools (this school we are using for the meeting is a great example of what we have achieved), community health centres and other investment projects. The federal government has allocated more than 30 billion roubles for this purpose, while regional and local governments have contributed another 117 billion roubles. This is a good ratio – regional and local funds account for 4 out of every 5 roubles.

Where did these funds go? They went on improving living standards in small rural towns and villages, connecting villages and households to the gas supply mains, which is a key to further rural development, improving the water supply, building schools, renovating entertainment and sports centres and restoring community health centres. The money has been invested in building 6 million square metres of housing. This was not done overnight, but all in all this is already a pretty substantial figure even across the country as a whole. Half of that residential property was allocated to young professionals and their families, to those who have decided to move to rural areas to live and work there. You know that our most important task is persuading them to stay, to show them that they have good career opportunities outside the big cities. The new schools that have opened in rural towns and villages have places for more than 23,000 children. In addition, 46 indoor and outdoor sports centres and 217 community health centres have been built.

Connecting households to the mains gas supply is extremely important. I worked on this issue before. Good progress has been made here, and over 50% of rural households are now connected to gas and drinking water supplies. The proportion of villages connected to the gas mains now stands at 54%, but it very much depends on the specific area. This is a good level, given that when we started, only one-third of all households actually had access to mains gas supplies, and that in a country which is the world’s leading producer of gas. We have made significant progress over the past few years, together with Gazprom, which has also invested heavily in this programme. Yet, none of this is enough to resolve all of the problems of Russia’s rural areas. They have been accumulating for decades, and we should not stop here.

The government allocated another 26 billion roubles this year, with 8 billion of that coming from the federal budget. As I said, money doesn’t cure everything, but without it you can’t do anything either.

I will now talk briefly about the most general issues we need to address. I think you are all familiar with these issues, but I will mention them anyway. The first is of course about building modern affordable housing in small towns and villages. The plan for 2012 is to build around 860,000 sq. m. of housing, which will again be distributed in accordance with the guidelines in the national programme: half of it will go to young professionals and their families. This needs to be complemented by the comprehensive development and improvement of their villages and small towns. Various Russian regions are currently implementing 31 comprehensive rural development projects.

Let’s now discuss the progress of these projects, and what difficulties they are encountering, if any.

You don't build big residential blocks in the middle of nowhere, that much is obvious. Development has to include the required transport and utilities infrastructure. These projects should improve people’s standards of living, and connect their new homes to utilities and all essential services in a rural town.

The second issue is a real challenge – in Russia at least – but is it also crucial: I am referring to rural roads of course.

We have met here today in Shumeika; but there is nothing out of the ordinary about this village. And we ran into the usual problem: we were going to visit an agricultural enterprise, but we couldn’t reach our destination because the road had been washed away by the rain. So this issue is very important and one the government has allocated 10 billion roubles for this year under the federal targeted programme for the development of the transport system, including 6 billion roubles of federal funding and 4 billion of regional funding. We have also estimated that consolidated annual spending on rural roads in Russia comes to about 20 billion roubles. This is next to nothing considering the size of the country. Yet, roads are being built and improved with this money: this year’s plan is to build 600 km of roads. But again, this is virtually nothing given Russia’s vast expanses. So we need to sit down together and think – possibly at this meeting – about what can be done for the entire country to promote the development of rural roads.

The third issue is on modernising healthcare. We plan to further develop rural healthcare centres, whose task is to provide primary healthcare services to rural residents. Here I think we need to try to bring together the principles of what people need and what is sufficient in medical services provision. What I mean by this is that we need to draw up a list of the necessary healthcare services that have to be provided locally. They should be provided by community health centres and general practitioners. More complex services should be provided by central regional hospitals, which should be able to use telemedicine equipment. Telemedicine is really crucial for Russia. We have do our best to improve the quality and accessibility of medical services, including by providing health centres with new equipment, including ambulances, which are often the only way Russian people can get access to medical care.

Young medical professionals – under the age of 35 – who arrive to work in rural centres are entitled to a lump-sum relocation grant of 1 million roubles. This money comes from the Federal Mandatory Medical Insurance Fund. As of August 31, around 4 billion roubles have been transferred to regional funds.

Fourth. Education is another crucial issue for rural areas. We are actually sitting in a school – a good and modern school as it happens. Villages with schools survive, but the ones without a school will eventually die. We need to preserve as many rural schools as possible, and the current optimisation should not boil down to a mechanical elimination of the smaller ones. I have been saying this repeatedly over the past few years. Our challenge is to maintain accessibility of education in villages and small rural towns, on the one hand, while forming a nationwide educational environment which would give equal opportunities to all children, on the other. The head of the school has just accompanied me to a lab where children are videoconferencing with Engels (a city in the Saratov Region). Was that Engels? Or what? Right. It was such a nice picture to see those little girls wearing headphones at computer screens, just sitting there talking. They didn’t even look up when we entered, so engrossed were they in their discussions on whatever issue they were busy with. They consult with teachers in Engels, even though they have their own teachers, but it is always good to have an extra opinion, which is impossible for them to get at home for obvious reasons. This is what I mean by a nationwide educational environment which we need to develop everywhere. We have already taken some major steps in this direction – we have connected all schools to the Internet and installed computers, and they have no problem communicating with other schools and education centres.

Fifth, 80% of various culture and entertainment centres in Russia are located in rural towns. At the same time, nearly one-third of the buildings are in a hideous state of disrepair.

Therefore, we have planned a series of measures as part of the Russian Culture federal targeted programme for 2012-2018, which we will begin implementing next year. These are very specific plans, not some general targets. We are thinking of expanding access to libraries for example, and mobile libraries could help here.

And finally the sixth issue – last but not least – involves creating conditions for fitness and sports and promoting a healthy lifestyle. This is primarily a question of building gyms and sports grounds. This sounds like an easy task, and equally relevant for all Russian regions. Some larger rural towns are even building ice rinks and large sports centres, which may not really be necessary there. In some places it is enough to build a football or a volleyball pitch; that can really make a difference to the general atmosphere. This is very important I think.

As I said, I have mentioned all of these tasks before. I must add that in rural areas, modern information technology is especially important in all of these areas, not only at the post office.

We have many tasks to accomplish. On July 14, we approved a government programme for the development of agriculture for 2013-2020. It will include a new federal targeted programme, Sustainable Development of Rural Areas in 2014-2017 and until 2020. I think the combined efforts of the federal government, regions and towns will help us achieve our goals.

Let’s continue working now. Agriculture Minister Nikolai Fyodorov, who is responsible for implementing the programmes I mentioned, will speak now. Please Mr Fyodorov.

Nikolai Fyodorov (Minister of Agriculture): Thank you Mr Medvedev. I would like to begin by citing two examples from my own experience. I remember that, in 2003, when the Federal Targeted Programme “Social development of the countryside” was launched, we had signed an agreement with Federal Minister Alexei Gordeyev at the Udarnik farm in the Morgaush District of the Chuvash Republic. The agreement had stipulated co-financing from the republican and federal budgets. After the agreement was signed, Mr Gordeyev spoke with the press and noted sadly: “Mr Medvedev, colleagues, can you imagine: One republic allocates more than two billion roubles for the social development of the countryside from its modest budget? And I have two billion roubles for the entire country.”

How did the Federal Targeted Programme “Social development of the countryside” begin -- with two billion roubles!  Right now, these allocations are several times higher. At that time, about 150 million roubles were allocated. We have come a long way since then, and our current achievements under this programme are quite impressive.

You have just mentioned some statistics regarding construction of rural roads. This is a very important aspect, and we have approved the relevant programme. It took us three years to complete rural roads between virtually all communities in one particular region. This project was completed there in 2008. A total of 640 kilometres of rural roads were built nationwide, but 325 km of these roads were built in just one region. One region fulfilled over 60% of road construction targets because the relevant programme was approved in that region. Why am I saying all this? The national Constitution expressly states that the development of rural territories is the joint task of the Russian Federation and its regions. A lot can be accomplished using available resources if a region and regional leaders have clearly set forth their priorities after national leaders focus on this high-priority issue. Most importantly, we have to single out specific priorities and assess their inter-dependence. Thank God, it appears that ten or even more regions have already made headway in facilitating the social development of the countryside. In my opinion, this can be explained by the fact that the governors of such regions have correctly chosen specific priorities. But, as we have this programme…

Dmitry Medvedev: This is exactly the case with Mr Fyodorov and what has been done by him in his day in Chuvashia  and that’s why  he is the Minister of Agriculture now.

Nikolai Fyodorov: Thank you… But there is hope…

Dmitry Medvedev: For all of us.

Nikolai Fyodorov: This year, 38.1 billion roubles, including 15 billion worth of federal funding (38%), are stipulated for the social development of the countryside. There are plans to attract regional funding worth almost 16 billion roubles, plus extra-budgetary allocations worth 7-9 billion roubles. The prime minister has mostly highlighted specific results that were posted during the programme’s implementation by 2012, and which will be posted in 2013-2020. But all these developments and parameters, including the construction of gas pipelines for rural communities, roads, water supply systems and housing, result in major changes in the country’s demographic development. Mr Prime Minister, I would like to mention the following statistics. The programme for the rural development of the countryside, which has been implemented rather actively over the past six years, and which involves major federal allocations in line with the co-funding principle, ensures drastic changes in the demographic situation. Mortality rates are going down, and birth rates are rising. Consequently, the number of territories affected by depopulation and a dwindling rural population are decreasing. In the early 2000s, most regions (73 regions) were affected by depopulation. In 2011, their number totaled 54. This means that the demographic situation has changed drastically across 20 regions.

In addition to what has been done until now, the new programme for the social development of the countryside stipulates a substantial increase in federal funding starting in 2013. Such funding, which totals 7.7 billion roubles, is set to increase by an additional nine billion roubles, and will gradually reach 19.2 billion roubles before 2020. Consequently, allocations for the highly specialised programme for the social development of the countryside will more than double. The programme will, from now on, be called “Sustained development of rural territories.”

This does not take into account the rural roads construction programme, which will receive an additional 99 billion roubles, including 59 billion roubles’ worth of federal allocations. We can achieve truly impressive results for regional populations and for the people of Russia in general if we increase this sum by several times in line with co-financing principles, and if we focus on the development of rural territories in the regions. In order to accomplish this, I would like to call the audience's attention to Slides No 14 and 15. What are we certain of, and what do we suggest within the format of our federal ministry, which acts as an agrarian headquarters, and which is supposed to adjust and improve the rural development policy for Russian regions and governors?

Some proposals have to be implemented at the federal level. Take a look at Slide No 14. We should use the relevant project funding principles, while drafting the new federal targeted programme. The relevant concept has already been coordinated, and this programme has been included in the state programme. By using project funding principles, it will become possible to ensure a well-balanced solution to economic, social, environmental and infrastructure problems regarding the development of rural territories. This highly effective concept, thank God, has already become a well-known and trendy word. We can spend hundreds of millions of roubles building a road somewhere. This will prove effective for any specific project. Or we can merge these projects into a single whole in order to achieve a result that would be dozens of times better. This is what progressive governors and progressive regions are doing, and they are achieving these results.

Second, we propose amending legislation in order to ensure the more cost-effective road construction projects in the countryside. Such amendments call for omitting specific criteria in choosing road construction projects. Consequently, any specific region would have the right to prioritise specific transport ties. Mr Medvedev, colleagues, please note that Moscow, the capital of the Russian Federation, has now ruled that a road for a community with a population of at least 125 should not exceed five km. It turns out that the regions, which have done this, are excluded from this programme. The governors have a better idea of specific priorities, and they know how to spend various allocations. To my mind, it is quite obvious that this should simply be noted, and that such normatives should be revised in line with your instructions. Technically speaking, we have reached an agreement with the Ministry of Transport.

The efficiency of using these funds in the regions is growing considerably. Based on personal experience, I can tell you that we must do something to improve the situation.

Next, to improve the methods of state policy for the sustainable development of rural areas, ensure employment and train personnel, and taking into account the need for a proportionate displacement of the population in regions, it would be expedient for the federal authorities to take over this difficult task. This goal has been approached many times, but so far no one has succeeded: it concerns a federal scheme of the displacement of the rural population until 2020. This is a highly ambitious but progressive goal; we should create an integrated picture based on available data and socioeconomic development plans of the country’s constituent entities. If we manage to do this, people will see that the Government not only makes forecasts, but also proposes practical development plans for rural areas and all constituent entities. In dealing with this issue, we should draft proposals on improving the support mechanisms for regions with unfavourable social conditions for agricultural development, those suffering from depopulation (there are several dozen such regions), and poorly developed areas with adverse natural conditions and climates.

This is a task for the Ministry of Regional Development, the Ministry of Agriculture and the Ministry of Economic Development, but I think that we should take over… We must do this anyway, sooner or later, but the sooner we do it the better it will be. This is something that the federal authorities could and should take over. We are ready to coordinate this work and invest in it; I believe that we will not be able to succeed otherwise.

I’d like to draw the attention of regional leaders – this is a matter of fundamental importance – to issues of priority importance to them, in order to considerably increase the efficiency of implementing the Government programme. This is what we should do when drafting and implementing regional programmes. First, to ensure comprehensive planning of their rural areas, all the regions should draft territorial planning documents, including general plans for villages. Far from all regions have these documents, without which farmers and large businessmen will be unable to operate with any degree of certainty. They want to know how their area will develop and what they can expect in the next five or 10 years. This is something that must be done; otherwise it amounts to very poor state and regional governance.

Second, the areas where investment projects are to be implemented should have social, engineering and transport infrastructure development plans, and in general, design specifications and estimates. In other words, when implementing the Government programme and signing agreements with the regions, we should demand that all of this be done, because it is stipulated in the effective legislation, in particular the Urban Development Code.

Third, taking into account the programme for increasing the efficiency of public finance management until 2018, which is being drafted, the regions should restructure and streamline the social infrastructure of rural areas to establish modern education centres, to provide the necessary number of school buses and to develop preschools, GP offices and mobile libraries. Many regions have all of this. They have the necessary experience in this area, which we should promote and popularise.

Fourth, in addition to other tools for improving housing conditions in rural areas, we should create federal and municipal housing stocks to lease low-pay housing in rural areas on conditions of the social loan contracts.

Dmitry Medvedev: Social lease.

Nikolai Fyodorov: Yes, excuse me, social lease contracts. Mr Medvedev, the federal authorities should remind everyone that the creation of regional, federal and municipal housing stocks is stipulated in Article 44 of the Constitution. All regions must have them, yet the majority of them have not yet done this. The goal of these stocks is to help those who cannot buy a flat of their own on any conditions. This is important first of all for rural areas.

And fifth, to expand the revenue portion of the regional budgets, financial resources should be consolidated for the development of rural infrastructure and housing construction, with the possibility of creating special-purpose municipal development funds based on the regions’ own funds, allocations for the implementation of targeted federal programmes, as well as extra-budgetary funds attracted, in part, through the consolidation of regional borrowing programmes and the development of public-private partnerships.  It’s interesting to i implement such practical and creative projects, and they will certainly have the intended effect. I’d like this audience to take this into account, and subsequently formulate these proposals for your approval in the form of instructions. We will gladly use these instruments while implementing the Government programme.

Dmitry Medvedev: Thank you, Mr Fyodorov. Colleagues, you have heard a federal approach. Now I’d like to hear from regional leaders. This is an interregional conference, which is how it should be. Present in this audience are not only the leaders of agrarian regions, because agrarian regions are not the only ones with villages.

I believe we should give the floor to the hosts. Mr Radayev, Governor of the Saratov Region.

Valery Radayev: Thank you. Mr Medvedev, colleagues. The rehabilitation of rural areas, the solution of problems of rural intelligentsia and the development of new, dynamically developing future-oriented rural areas are among the priority goals of the Russian policy. The Saratov Region is involved in this process, alongside other Russian regions. A total of 25% of the regional population, or 632,000 people, live in rural areas. This is why we are focusing on the implementation of the targeted federal programme for the social development of rural areas until 2013.

The key priority of the programme is to create a foundation for the sustainable development of rural areas through an upgrade of the social and engineering infrastructure. During the programme’s implementation from 2003 to 2011, we have invested 4.2 billion roubles in housing construction, including 1.1 billion from the federal budget and 1.3 billion from the regional budget. Over 2 billion roubles have been invested in improving housing conditions in rural areas (including for young families and young specialists). We have built and bought 323,000 square metres of housing, including 189,000 square metres for young families and young specialists. As a result, the living conditions of  over 3,000 rural families and 680 young specialists have improved; of these people, 45% are agricultural workers, 21% are educators, 15% are healthcare workers and 13% are employed at culture and sport facilities.

Given the region’s natural conditions and climate, it is very important to develop water supply systems, especially in the areas beyond the Volga. We have invested 963 million roubles in water supply in our rural areas, built 470 kilometres of local water pipes and provided water to over 20,000 rural families. During the implementation of the programme, the supply of tap water in rural areas has grown from 32% to 71%. This is the fourth best result in the Volga Federal District.

As for gas supply, we have built over 400 kilometres of gas distribution systems, connected more than 5,000 rural homes and apartments to the gas supply network, and invested over 300 million roubles. Gas supply in our rural areas has grown to 97% over the past few years. This is the second best result in the Volga Federal District (after the Orenburg Region).

We are increasing the network of general schools in rural areas and have built five new schools for 1,938 pupils within the framework of the programme. These new schools are located in the Dergachyovsky District (the most outlying one, for 330 pupils), the Perelyubsky District (for 220 pupils), the Rovensky District (for 250), the Fyodorovsky District (for 160) and the Engelssky District (for 176 pupils). We have completed the renovation of three schools for 802 pupils. In 2009 we started building a new school for 220 pupils in the village of Zolotaya Step, in the Sovetsky District, which is set to open this year.

A total of 636 million roubles have been allocated for activities within the framework of the programme. This is enough to build and buy at least 33,000 square metres of housing for people, including young families and young specialists, launch at least 54 local   water pipes, ensure a stable water supply for 3,500 rural residents, put into action over 16 kilometres of gas distribution systems, connect at least 650 dwelling houses to the gas supply network, finish the construction of a school for 220 pupils in the village of Zolotaya Step, Sovetsky District, begin the renovation of a school for 150 pupils in the village of Bolshoi Melik, Balashovsky District, and complete the construction of the region’s first three rural health centres in the villages of Luganskoye, Staraya Topovka and Kamensky, Krasnoarmeisk District.

As of September 1 this year, the planned federal allocations have been transferred to the region in full. Construction and assembly work is proceeding apace at all of the social and engineering infrastructure projects within the programme. Implementation of the programme’s events allows the Saratov Region Government to pursue a goal-oriented policy of personnel retention and to improve the quality of life in rural areas. However, we would gladly accept the assistance of the federal centre in certain fields. Although we are taking measures, which are stipulated in the programme, to improve living conditions in rural areas, over 600 families need new apartments. We need federal budget allocations to build and buy housing, which will allow us to provide housing to everyone who needs it.

Mr Medvedev, colleagues, I’d like to make several proposals. I support the proposals made by Nikolai Fyodorov, Minister of Agriculture to review some criteria for selecting projects under the federal programme concerning numbers of residents (at least 125 people) and the transport gap of more than five kilometres, and also to turn over to the local Government the authority to determine the most promising villages that must have year-round communication services and a network of motorways, because the cost of building roads there is very high and is sometimes unfounded.

One more proposal is stipulated in the list of measures for building physical fitness and sport facilities in rural areas. We suggest that the list should include, as Mr Medvedev has said, the construction of light, open planar sport facilities. This would be much cheaper and would not require large budgetary allocations. At the same time, such facilities could be built in a large number of small villages.

In conclusion I’d like to express our gratitude to the federal Government for supporting the initiatives advanced by the region. We hope to continue our effective cooperation with the federal centre to the benefit of rural development. For its part, the region will continue to work to achieve all the goals that have been set for it. Thank you.

Dmitry Medvedev: Thank you. Any regional head who is present here may take the floor. Mr Golubev (Vasily Golubev, Governor of the Rostov Region), go ahead.

Vasily Golubev: Mr Medvedev, we have already begun working on the budget for 2013-2015. We have decided that assistance to rural areas is one of the priorities for our region, which is a large agro-industrial region. We therefore plan to increase allocations for nearly all main fields in the said period. We have calculated that the implementation of this programme in 2011 has allowed us to increase employment from 68% to 72.3% within one year.

Over the past six years since the launch of the targeted federal programme, we have improved living conditions for 3,600 people, or more precisely, families. Unfortunately, people have to wait in line for housing subsidies for three to five years, due to insufficient financing. At present, approximately 4,000 rural families are eager to resolve this issue. To solve this problem in the 15 municipal entities where that problem exists, we allocated land plots for new housing construction. In low-rise villages, we have undertaken to build the infrastructure together with businesses in accordance with the regional law on public-private partnership.

In our opinion, the programme’s funds should above all be targeting new families and young professionals who have expressed a desire to build or buy a new home. Why? This encourages young people to live in rural areas and boosts housing construction there. Unfortunately, the situation on the ground is such that people often use the money in the secondary market, so the problem still demands attention.

We have a housing construction programme that will increase noticeably in 2013-2014, and this is why we should devote thought to it and act on it today. To this end, the regions must be given more powers, in the form of determining priorities for improving housing conditions in rural areas and in identifying pilot villages where low-rise housing construction will take place. Of course, in our opinion, the federal budget should contribute more to the building of social infrastructure facilities that are needed in rural areas.

A few words about rural infrastructure. This year we have 67 infrastructure projects going on. Simultaneously, starting in 2011 we have been more active in designing gas and water supply networks. This is still a pressing problem in the Rostov Region. Gasification of the coal-mining region met with resistance initially because we had coal. This is a problem today. Between 2002 and 2011 we received a total of some 2 billion roubles for gasification. Starting from 2012 this will be roughly the amount we will spend on gasification every year, in other words, the pace of gasification will increase markedly in the next two or three years. Already this year, the situation will change noticeably. Besides, we have an established practice of using off-budget money for gasification.

The road network. You were absolutely right in saying that this is an urgent problem. In the Rostov Region today, only 300 out of 2,266 rural communities have hard-surface roads. Starting from 2012, we are changing and revising the standards for the design of rural roads. This year we have been designing, and have started building roads that are four (4.2) metres wide. In Europe some roads are three metres wide, they just have a roadside strip that enables vehicles going in opposite directions to pass by. Of course these are not roads where regular buses run, but they make it possible to take children to school. They make it possible to widen roads at intersections. If traffic is not heavy, this system works very well. Therefore we would like the regions to obtain more discretionary powers on these matters. I support my colleague from the Saratov Region on the issue of selecting the villages and hamlets to which a rural road should be built.

One of the issues raised in connection with education was kindergartens. First, we use school premises that have become vacant. This practice has already shown itself to good advantage: a kindergarten is established with a separate entrance, with the whole range of modern conveniences and meeting all the necessary requirements. We have adopted the “100 kindergartens” programme until 2015. We will build 15 this year, 25 next year and 30 in each of the following two years. But this is not an easy thing to do, because it requires serious funding. So I urge you to meet our request (I think similar requests are coming from my colleagues) for more federal financing of pre-school childcare institutions. Unfortunately, this is not envisaged under the current programme.

In conclusion, I would like to touch upon a topic that is also being discussed today -- the youth. Of course, no programme will be effective without creating conditions for leisure and physical culture and sport activities. This is one of our priorities. Culture in rural areas is another challenge. Most of our Houses of Culture are in need of repair, many require major repairs.

Mr Medvedev, there is one issue that has to be resolved, if not today then tomorrow. There is a company called Optifood in the Rostov Region. you probably know about it because it is the third biggest company in Russia, producing 90,000 tonnes of poultry meat in 2011. Today the company has reached its design capacity of 100,000 tonnes of poultry meat. We believe that developing this production also is support of rural communities because the company provides 3,000 jobs. Beginning in February, our dealings with Selkhozbank, with Mr Patrushev (Dmitry Patrushev, Chairman of the Board of Rossselkhozbank, the Agricultural Bank of Russia) have been generally normal. We were on the same wavelength. On the 17^th, after our submission to Arkady Dvorkovich, we received a letter to the effect that they intend to support the company and that they are ready to allocate 400 million roubles. But as of today, the poultry meat production facility, which is the biggest not only in the Rostov Region is facing closure.

Dmitry Medvedev: Why?

Vassily Golubev: Because the credit of 400 million has been put on hold.

Dmitry Medvedev: Have they refused?

Vassily Golubev: They have not refused. In fact this letter was encouraging. But the money is not being released. The owner has to…

Dmitry Medvedev: I understand your desire to push for credit right in front of the cameras. But anyway, it is a big production facility. I’ll speak with Arkady Dvorkovich and will have him take another look at the matter.

Vassily Golubev: He is conversant with the issue.

Dmitry Medvedev: Get in touch with Rosselkhozbank, with Mr Patrushev, and find out where the hitch is.

Vassily Golubev: Thank you, thank you for your attention.

Dmitry Medvedev: Who will be next? I am addressing the governors first, but not necessarily. We have colleagues from different regions. Sergei Morozov, would you like to speak?

Sergei Morozov (Governor of the Ulyanovsk Region):  Thank you, Mr Medvedev.

I would like to back Nikolai Fyodorov on the issue of further social development of rural areas. Like my colleagues, I can site impressive figures connected with gasification, water supply, road building and house building. But I would also like to go along with my fellow governors who said that the criteria the Ministry of Transport is using for building  roads leading to rural communities need to be revised. In my opinion, roads should be built to those villages where investment projects are under way and which will create jobs. This opens up new opportunities for the villagers, who feel that they have an opportunity and a desire to put the whole social infrastructure in order. I think it would make sense, Mr Medvedev to transfer the powers of setting such criteria to the regions, because the situation varies, the territories are huge and I think it would be the right thing to do.

Of course, one could take issue with some of the things that Nikolai Fyodorov said. I understand from what has been said here that perhaps the Ulyanovsk Region is not unique in terms of the formation of a state and municipal housing stock for renting out. I have to say that in the Ulyanovsk Region, 1,500 people are on the waiting list for such housing. So, thanks in part to the policy we have been pursuing under the national projects in rural areas, people have financial resources. Economically speaking, we must now replace these family savings with additional budget resources. Let us first increase (at least double) the allocations for improving the housing conditions of rural residents. I have looked up the figures, and it would not be all that much for the Russian Federation, 18 billion roubles. That would eliminate all these waiting lists. After that, we can discuss the creation of a municipal or federal housing stock. That’s the first issue.

And the second thing. I think changes should be made to the rules for providing and distributing subsidies out of the federal budget to the budgets of the regions for improving the living conditions of rural residents, including young professionals and new families, by granting us, the regions, the right to determine how this money is spent. We see that today many young professionals buy housing in the secondary market, effectively overheating it and not investing in the development of their community or municipality. I think it would be fair for you to grant us the right to determine the additional conditions, after which we would determine that housing has to be bought only in the primary market.

I think the idea of creating targeted municipal development funds needs to be supported. In the Ulyanovsk Region, we have taken several steps in terms of organisation. For example, last year we set up an agency for the development of rural territories, which has practically completed the issue of passports to every village in the Ulyanovsk Region, assessed all the labour resources and the state of the entire infrastructure. Before the year is out, the agency has to complete the drafting of all the necessary territorial layout documents for urban development. In general, the performance indicators in the region and the whole Volga Federal District are fairly good -- Mikhail Babich (Presidential Representative to the Volga Federal District) is very exacting.

Last year we took another significant step by creating targeted development funds. We have passed a regional law on village heads (starosty), which revives that very important social institution.

We have been supporting local initiatives in rural areas. The Open Government project is helpful in resolving problems that arise. It is a good thing that the draft programme “Sustained Development of Rural Territories” envisages grants to support local initiatives.

I would like to note that many regions will face the problem of having the wherewithal to ensure that the municipal development funds really work. It is unlikely that anyone will find this money lying around. But in general, I think we have the money. What I am going to say may sound odd, but we in the Ulyanovsk Region, including the local government, have discussed it at length. Take for example the rural community of Bolshiye Klychischi, a typical community in the Ulyanovsk Region (I stopped there to discuss some municipal matters on the way here): it has 6,000 inhabitants and a small budget of about 5 million roubles. What are the people’s biggest concerns? Repair of the kindergarten (it would cost about 2 million roubles), water supply (another 6 million), and street lighting (1.5 million). These are the problems demanding to be addressed. Besides, administering a municipality costs 3 million. In general the region spends 350 million roubles on all the village administrations. In order to deal with all the urgent problems (I have just finished a review of the water supply) I need 260 million. Of course, we may go on supporting what I consider to be unviable local government bodies at the level of villages, and spending huge amounts on this. But would it not be better to follow the example of what the state has done to solve the problems in urban settlements and areas, and not have the administration of the region and the administration of an urban-type settlement sit opposite each other? We have diminished the number of urban-type settlements, saving a huge amount of money and improving the way the territories are run. That would solve, among other things, the problem of replenishing the municipal development fund. Thank you.

Dmitry Medvedev: Mr Morozov, what is preventing you from reducing the number of municipal entities? Go ahead with the necessary procedures and reduce their number. I just don’t understand, is it some order from above that forbids enlargement of entities or changing the administrative bodies?

Sergei Morozov: There is Law 131 that regulates all the aspects of the administrative structure. For example, the distance from the village to the administrative centre must be such that a person could, say, leave in the morning and return home for lunchtime. And there are many other things.

Dmitry Medvedev: Do I understand you right that you think that what you are proposing cannot be done without changing the legislation on municipal government?

Sergei Morozov: No. If we introduce amendments to Federal Law 131 by enabling villages to be administered by publicly elected administrators so that there should be public control (there will be village heads), we will save hundreds and perhaps billions of roubles across the Russian Federation, and that money could then be used to develop rural areas.

Dmitry Medvedev: In other words, legislation must be tweaked so that this could be done?

Sergei Morozov: That is correct.

Dmitry Medvedev: All right. I have taken note of what you said. The topic is not directly connected with social development, but it comes round to it all the same. The figures you have cited are very convincing. I have nothing to add. When the cost of maintaining the administrative staff is comparable to the cost of solving some of the most complex problems, that, I admit, is a serious argument. Let us think about it. Perhaps the law should be less detailed and more general so that these issues can be resolved. This issue can be approached in various ways.

Sergei Morozov: Mr Medvedev, we also have the problem of personnel. As things currently stand, we hire incompetent administrators and then an experienced contractor on gasification comes along and litigation ensues. The village administrations that have incompetent lawyers pick a legal firm through a tender to protect their interests. They end up paying the lawyer twice. This is ridiculous.

Dmitry Medvedev: Okay, I understand.

Regarding the option of the regions themselves to determine how the subsidies are to be spent, what is the position of the Finance Ministry on this matter, Andrei Ivanov?

Andrei Ivanov (Deputy Finance Minister): Concerning the distribution of subsidies, we would like, Mr Medvedev, to link it with the proposals made by the Agriculture Ministry and by Nikolai Fyodorov.

You see, all the subsidies distributed under this targeted programme (and the programmes of housing construction in rural areas) are tied in with joint financing of the mandates that are not those of the Russian Federation -- they are the mandates of municipalities and to some extent of the regions. Nikolai Fyodorov has proposed considering the prime criterion to be the financing of comprehensive investment projects in rural areas -- that is, he has set a new financial task for the federal executive bodies: to eliminate infrastructure restrictions (social, transport and housing) for those who invest, as you put it, in improving the rural way of life.     

 The second criteria for allocating subsidies to regions could remain as it was when we just started implementing this programme – whether a region continues implementing its local comprehensive development programmes aimed at maintaining quality of life at a decent level, I mean, such as ensuring broad access to healthcare and education and other public services even in “depressed” regions. In this respect, we are ready to discuss and adjust priority criteria for allocating subsidies under the government agriculture development programme after it is adopted; we have discussed this with Mr Dvorkovich, who issued an instruction to us. We are open to proposals from the regions, but we will only discuss proposals, which Mr Fyodorov has mentioned as priority criteria for the distribution of federal financial support.

Dmitry Medvedev: I still don’t get it. These are a lot of pretty words, nice but meaningless. What do you think of giving regional governors more independence in spending government money?

Alexei Ivanov: I think they could be given more independence under the condition that they are guided by the key criteria that Mr Fyodorov has outlined here.

Dmitry Medvedev: Some key principles that he outlined for a specific area, or what?

Alexei Ivanov: For a specific area that we are financing, also including housing projects…

Dmitry Medvedev: One that is ready for this?

Alexei Ivanov: One that is ready, right.

Dmitry Medvedev: How are you going to do this? How will you distribute the money?

Alexei Ivanov: We are actually co-financing the regions’ commitments now, Mr Medvedev.

Dmitry Medvedev: But how are you going to separate the husk from the grain, so to speak?

Alexei Ivanov: We have regulations for granting of subsidies. These include a set of requirements to the regions and their programmes. We will adjust those criteria in the same way as we have done with Resolution No. 90 and other government resolutions…

Dmitry Medvedev: All right, you can try. Just make sure this does not turn into bureaucratic cycles. If a region is ready to take on greater responsibility for spending government money, let them handle it. Agreed?

Alexei Ivanov: Yes, sir.

Dmitry Medvedev: All right. Does anyone want to say anything? Regional leaders, or municipal leaders who are also present? Go ahead. Please, Mr Bogomolov.

Oleg Bogomolov (Governor of the Kurgan Region): Mr Medvedev, colleagues,

I have one small proposal. I absolutely share this position and I appreciate the effort that the government and the Ministry of Agriculture, and Mr Medvedev are making with this important programme. In the Kurgan Region, 43% of the population live in rural areas.

There is a problem, Mr Medvedev. Now Mr Golubev here has already said that Gazprom sticks to its commitments; I am truly grateful to Gazprom for the social responsibility they have been carrying for years. With their help, the Kurgan Region significantly increased the number of households connected to gas distribution grids. In fact, local gas grids have grown sevenfold, to cover 22% of the population, up from a level of 3% (the average figure across Russia is 54%).

We are trying hard to further improve this situation, but we are stuck in a vicious cycle. On the one hand, Gazprom says they will not build any local grids with returns below 76%, which means they want some profit. On the other hand, there are villages such as Almenyevo (40 km away from Shumikha) where there are no industrial facilities – only villagers who want to have gas in their homes. Furthermore, investors do not want to build any facilities there because there is no infrastructure. They say, we are ready to build, Mr Bogomolov, but you have no gas there! I’ll get no profit if I have to bring coal, fuel oil and diesel fuel from 550 km away. No matter how hard we try, we are unable to change this situation in a number of villages, and they end up getting left behind in the development process. We cannot invest in them or have Gazprom do so. Neither can we afford to build a local gas grid with regional money. If you could reconsider the situation of these villages where there are no industrial facilities… We cannot attract any investment there unless we change this situation.

The second part of Mr Fyodorov’s question had to do with co-financing regional projects. When we began implementing this programme in 2003, the co-financing terms were 20:80, which means that the regional government provided 20% while the federal government contributed the rest. This ratio has changed to 35:65, which results in a higher fiscal burden for our region, which uses government support. We now have to co-finance modernisation projects in healthcare and education as well as important infrastructural projects, the e-government project and so on. We are often short of money. We would have gladly invested more; regions which do not have enough money for co-financing often face this question. Those regions which cannot invest more also get lower co-financing from the government, which means they lag even far behind wealthier regions over time.

Next, we have participated in a very important and successful pilot project which involved the comprehensive development in the village of Chistoprudnoye of the Shadrinsky District. It would be good if this programme continues. The Kurgan Region is more than willing to participate in more projects like this.

My last point has to do with a very important issue, Mr Medvedev. We greatly appreciate the inclusion of rural social development in the federal targeted programme. We have long wanted it to be, and we are eager to work on this. However small our input, we will still be moving forward; this much is obvious. But, Mr Medvedev, this year has been an absolute disaster. Please Mr Medvedev, we need to tell the villagers who lost their crops to wildfires how soon we will be able to help them, to support those who have lost everything… We have to write off 400,000 of the 1.5 million (hectares) of croplands. I hope that those agribusinesses who work on lands which enjoyed fairly good weather this summer will have better results than they showed last year. Even if they harvest 1,200 kg per hectare, their financial situation will be better. But how can we help those who have almost nothing to harvest?

Dmitry Medvedev: Mr Lobanov, getting back to the wildfires and droughts in several regions this year. Are you working on these issues with the Ministry of Agriculture?

Oleg Bogomolov: Yes, we do. We have all documents…

Dmitry Medvedev: Are there any proposals regarding these issues? Let’s discuss them.

Oleg Bogomolov: We have formulated the proposals, Mr Medvedev. First of all, we would like to have subsidies issued to the regions that were hit hardest. Certainly, we are interested in grace periods on bank loans provided by Rosselkhozbank and Sberbank. It is also important to consider extensions on lease payments via Rosagroleasing.

Dmitry Medvedev: I see.

Oleg Bogomolov: We are not asking for anything unusual.

Dmitry Medvedev: I know, there’s nothing unusual about your requests. I am ready to support you. When I say “you” I mean the farmers and people in the Kurgan Region and others. Rosselkhozbank and Rosagroleasing have already received corresponding instructions regarding loan extensions and payment plans for the agricultural producers affected by these disasters. Please keep tabs on the situation. The Ministry of Agriculture and the Government Executive Office will be there to help you.

Oleg Bogomolov: That concludes my report. Thank you.

Dmitry Medvedev: Thank you. With regard to the vicious circle that was mentioned earlier, I believe it also has to do with the way the issue is presented. If you approve long-term development plans for respective towns and villages you should share them with Gazprom and investors. You should bring them both together and have them work together. They are dealing with the same projects, after all. You should show them that you have plans to build gas supply lines that have been approved by regional administrations and also let Gazprom know that there are willing investors out there. That’s a matter of letting people know about each other’s plans.

Oleg Bogomolov: It’s true, Mr Medvedev, and we're working on it. We had finalised a project in Shumikha for 40 tonnes of chicken meat and 2 million eggs. We had an investor, but we failed to build a gas pipeline. He waited for a while and ... The institute drafted a feasibility study for RAO Gazprom and they came back to me saying that the project holds no promise and they won’t go for it, suggesting doing something else instead. So, they shut down all operations and left the capsule lying at the construction site.  So, talks are underway, but I would like to ask you... We were the ones who got this started. We have no questions regarding Gazprom’s contribution.  But I still believe that we can find better solutions for regions such as ours with large numbers of people living in rural areas, but without large industrial gas consumers.

Dmitry Medvedev: Of course, we should be looking for alternative solutions. To put things in perspective, this programme is to a great extent part of Gazprom’s charitable activities, because Gazprom could be just selling gas on the domestic and foreign markets and not have to worry about building gas supply lines in such regions. At some point, we told them that it was their responsibility to Russian people, and Gazprom should engage in this work. Can anyone say something about this?

Vladimir Plotnikov (President of the Russian Association of Farmers and Agricultural Cooperatives): May I?

Dmitry Medvedev: Please go ahead.

Vladimir Plotnikov: Thank you, Mr Medvedev. Colleagues, I would like to say a few words as president of the Farmers Association. As a Duma deputy and now a senator, I know that the programme for social development of the village is the first thing that gets cut down during budget reduction and sequestration. This was the case over the past 15 years. Thank God, things have turned around and this meeting chaired by the Prime Minister is a good sign telling us that this topic will be addressed seriously and thoroughly. Everyone said so and everyone agreed, but no one did anything, Mr Medvedev. Some cited examples today when they started paying attention only when national projects were underway. Everyone realises that this boosts the production of food and improves rural life in general, because our villages are aging and hold no sway for young people. The situation in our villages can be changed dramatically only if we manage to resolve social problems and develop rural areas. This applies to a huge number of people.

You were right when you said that no government programme can do this for us unless we all get involved. I would like to elaborate on this. A disturbing trend has formed where rural lands are being bought by outsiders rather than people who live there. Outsiders are not motivated to build schools or roads. There are no children in those areas. We should turn this trend around and have locals who live there buy land in the first place. Farmers have different motivations, because their children go to local schools and they own properties in these areas. Therefore, I propose allowing local residents have a pre-emptive right to buy land. Thank you.

Dmitry Medvedev: Thank you, Mr Plotnikov. Land is a totally separate issue. You are right when you say that land shouldn’t go to land aggregators who buy only to resell. This issue requires a separate meeting, because all issues related to land turnover don’t get enough attention. We have been looking into the issue of repossessing agricultural land and other misused rural lands for several years now. I issued a stack of instructions, we held numerous meetings and drafted bills. Nothing works, not so much as a single move that we tried. Is that right, Mr Fyodorov? Not a single mechanism is working. We tried various approaches, including the one where we wanted to repossess lands that haven’t been used over the past two years. We weren’t talking about repossession without compensation. Reasonable compensation should be paid, of course. Still nothing happens. Mr Dvorkovich, should we... I don’t want to hold another meeting on the same topic, it's time to act.

Arkady Dvorkovich: We will come up with a solution that won’t require a meeting.

Dmitry Medvedev: Then please come up with a solution, give it to me and we will quickly pass it to the State Duma and the Federation Council for them to adopt it, because otherwise we will be stuck in rehashing the same old issues over and over again.

Arkady Dvorkovich: All right, we will. I have specific deputies’ proposals to this end.

Dmitry Medvedev: All right, let’s do it. How are things in Tatarstan, Mr Khalikov?

Ildar Khalikov (Prime Minister of the Republic of Tatarstan):  Good afternoon, Mr Medvedev. This is a special issue for Tatarstan. We view villages not only as agricultural producers, but also as keepers of a certain way of life and ethnic traditions, just like in many other ethnic regions. Of course, we are carrying out the programmes that were mentioned earlier. In addition, we are carrying out a major programme for rural health posts. We plan to restore order at over 1,200 feldsher-midwife posts within the next five years. This programme includes building new modular posts, renovating existing ones and accommodating health posts in existing facilities, such as schools. A school is a perfect place for a good health post, provided there’s a separate entrance. Schools in rural areas are more than just educational institutions, they are hubs for all kinds of activities.

We had a separate large village club programme start this year. Most of these clubs will be all-purpose facilities built according to a standard project. A large village club costs 9.8 million roubles to build.

Dmitry Medvedev: I’m just curious, what are these clubs for? I know that each time anyone says “club” people’s hearts sink, because they don’t know where the money goes.

Ildar Khalikov: The club has an administrative room, an auditorium that seats up to 300 people and a stage. It's a nice, heated brick building costing 9.8 million roubles to build. We are going to build 50 this year, and 50 in 2013 and 2014 each. So we will build 150 clubs in three years. Colleagues were right when they said that roads are the most important issue in rural areas. Any village you go, they will ask you about introducing special categories of roads and removing restrictions.

Water supply is another issue that doesn’t require much money to fix, but is important as well. The existing federal programme, of course... Please keep it in place or even better expand it.

The third issue is about streamlining school activities. People who will be watching this broadcast will be very grateful to you for this long-awaited decision to revise the approach to streamlining schools. This is a widespread problem and, unfortunately, the Ministry of Education is still using these indicators to rank schools in Russian regions. Since this work is being funded from regional budgets, I would like to ask you to allow local authorities make their own decisions with regard to financing.  Situations vary across villages and municipalities, and local authorities are better placed to regulate these processes. Parents are different, roads are different and schools are different as well. Thank you.

Dmitry Medvedev: Thank you. We have heads of municipal districts and municipalities. Do you have anything to say, or have the governors taken over all responsibility? Please don’t be shy, no one will punish you for it. That is, of course, if you want. If everything is said, then...

Nikolai Pankov (Chairman of the State Duma Committee on Agriculture): Mr Medvedev, please allow the lawmakers…

Dmitry Medvedev: I will, but women and children – I mean the municipalities – will go first, all right? Please go ahead.

Dmitry Lobanov (Head of the Engelssky municipal district, Saratov Region): Thank you. Mr Medvedev and colleagues, it is hard to overstate the importance of social development in rural areas. We see that the gap in standards of living between rural and urban residents is narrowing. We can see this process to completion only if we address the rural development in a comprehensive manner. This is a priority in the municipal programme for expanding agricultural production in the Engelssky municipal district, where we have planned several important measures under the regional targeted programme Social Development of Rural Areas in 2012 and 2013 to provide rural residents with affordable housing, schools, health posts, hospitals, outpatient clinics, rural clubs, sports facilities, gas and water supply and sanitation in rural areas. Four areas have been funded so far: water supply and the construction of schools, gas supply lines and housing. As much as 300 million roubles have been disbursed in this municipal district under the regional targeted programme, including 93 million from the federal budget, 153 million the regional budget and 54 million from the local budget.

 A total of 3.6 kilometres of gas supply systems have been laid, more than 70 kilometres of water supply systems have been reconstructed, and a school for 176 pupils has been built in the village of Shumeika where we are now. The living conditions of 176 families living in the countryside have been improved, of them 126 are young families, and I’d particularly like to highlight that new homes were built for 48 families.

The total of 10,800 square meters of living space have been built or bought, 13 families got certificates this year. The volume of budget funding for these measures reached 120 million roubles. This subprogramme is being co-funded by its participants; they provide 30 percent of the necessary endowment. Presently, the other 170 families living in the countryside, of them 83 young ones, have been classified as needing improved housing conditions.

Aside from that, Engelsk municipal authorities held an additional set of actions aimed at developing social infrastructure in the countryside. Huge work to reconstruct and completely renovate social facilities has been carried out using funding from budget and non-budget sources. Over the last five years, the total sum allocated to village development has been increased by 73 million roubles in addition to the stated 73 million roubles: the money has been allocated to education, healthcare, culture and sports. About 36.5 million roubles has been earmarked for education. This money helped to completely rebuild three kindergartens, renovate two preschools, and open new groups in existing preschools. All this helped to send 575 children to kindergarten who had previously been waitlisted.

The technical state of rural healthcare establishments remains under constant monitoring. Rural healthcare clinics have been renovated. Entertainment and recreation centres have been renovated in the villages of Leninskoye and Osinovka; 16 million roubles have been spent to reconstruct 16 community cultural centres. A total of three million roubles have been allocated to develop physical fitness and sports programmes: sports centres in the Loshchina village and Karl Marx village have been completely rebuilt, five athletic fields have been opened. So, a total of 373 million roubles have been spent on developing the rural social sphere between 2007 and 2012. The adopted measures made it possible to increase rural living standards significantly. Of course, not all of the rural problems have been fixed.  The program is working, but requirements demanding that the local budget must provide 30 percent of the funding put constraints on the implementation of the program. Actually, we managed to get 9 percent of the money allocated to the whole region and 12 percent of the targeted regional budget.  A reduction in the required amount of municipal co-funding would have helped us, Mr Medvedev. This move would allow municipal authorities to get more regional and federal funding and to settle issues related to drafting project and estimate documentation; in its turn, that would increase the efficiency of the implemented programmes and significantly improve the living standards in rural communities.

Dmitry Medvedev: Thank you, Mr Lobanov. I would like to know whether you support the issues that were earlier discussed by your colleagues, the village heads; in particular, issues concerning roads and amending criteria.

Dmitry Lobanov: I support the road issues. But regarding the leaders and all other issues…Under Law No. 131, municipal deputy councils can pass amendments to the charter that enters into force after the powers of the representative body expire. Next year, we will hold elections, and having passed these amendments today, they will come into force starting next year. The decision to merger the town of Engels and Privolzhsk Municipality has been taken. Actually, there is no fixed boundary between them; there are 210,000 residents in Engels and 35,000 residents in Privolzhsk; the city ends and the rural district begins.  A decision to merge these two municipal entities has been taken. The possibility of merging the town’s and district’s administrations is also being mulled. Referring to rural districts, there is an article saying that a head of a municipality can juggle the office of the head of municipality’s administration, which significantly reduces the required funding, reduces number of people, I mean the offices, that is needed to serve under these two heads, and for that reason I do not totally agree with you.

Dmitry Medvedev: I understand. You mean at this point the law does not hinder your work. That is good. Easily understandable reasons stand behind the difference in stances.

Yes, please go ahead.

Nikolay Pankov: Pankov Nikolai, Chairman of the State Duma Agriculture Committee. Mr Medvedev, you were right to say that people are the main focus of our rural policy, and the main programme being implemented in the countryside is the social development programme. This meeting is being held in a village where all these programmes are working and we can see how they impact the residents’ everyday lives – that implies that the programme will continue working in the future. Actually, we are not certain about that, because over the course of the last three or four years the implementation of this programme has been constantly scaled back and the programme was financed with leftover budget funds. Perhaps a range of problems discussed by the regional leaders and municipal deputies present here have not yet been fixed because not enough attention has been paid to these problems.

Mr Medvedev, I would like to propose that this programme be expanded by at least 10 billion roubles. The Ministry of Agriculture has the necessary start-up positions, and we regard this programme not only as funding of the countryside but also attracting investment to the countryside: that implies the participation of businesses and regions in this programme; that the programme is an incentive boosting the flow of investment into the countryside.

Mr Medvedev, thank you very much for the emphasis you placed on the bill on land use regulations that is currently being considered by the Government. In one of your addresses, you said that the system of land classification should remain; I mean, more exactly, agricultural land plots – this category should remain. But, as you absolutely correctly put it, land must be put to work. About 40 percent of land (between 40 and 60 percent of land plots in the regions) is not being used; but the system of land classification should remain anyway, thanks for that initiative.

Dmitry Medvedev: Thank you colleagues. Both Nikolai Fyodorov and Vladimir Plotnikov have, as lawmakers, addressed this issue, but I would like to say it once again: it is quite difficult to set the budget because the overall global economic situation is quite complicated, the situation with our economy is also difficult. But even in these circumstances, within the framework of the 2013 budget and the budget outlook to 2015, the programme Rural Social Development, which is actually a subprogramme of a wider state programme, has not been reduced by a single rouble.  These are our priorities, which Mr Fyodorov mentioned. In fact, what are the priorities? This is the layout of priorities defining where money should be allocated. It is always very difficult to take such decisions. But let’s be honest, it is very important to know it. What is going on in our Leningrad Region?

Alexander Drozdenko (Leningrad Region Governor): Mr Medvedev, I totally agree with everything my colleagues said. I will not speak about the importance of the programme. I want to say only one thing. I would like that Mr Fyodorov introduced clear rules regulating the co-funding of the programme. Several colleagues say the co-funding should be 35 to 65 percent, others say it should be 30 to 70 percent. In our Leningrad Region, the regional budget funding has been standing at 77 percent over the course of the implementation of the programme, non-budget sources make up 11 percent of the funding, and only 12 percent comes from the Russian Federation. Rules regulating the funding of this scheme should be very clear, authorities should be motivated: the more funding we provide from the regional budget, the more – lets put it at 30 percent or 25 percent – we should get from the federal budget. Then the project will be even more efficient. This is my proposal. Thanks.

Dmitry Medvedev: Thank you, Mr Drozdenko.

Georgy Svid: May I speak?

Dmitry Medvedev: Yes of course. Go ahead!

Georgy Svid (General Director of the company Avangard, Ryazan Region): Thank you. I run a farm, I am closer to the land. Of course, I totally support all the proposals advanced by the Minister of Agriculture, Mr Fyodorov. But I would like to express my opinion on the housing problems. The very good programme for rural development became very popular among residents. We began building 40 homes, the construction of 20 of them will be completed this year, 17 of these new homes will be transferred to young families. The number of people who want to take part in the programme is very high, almost two times higher than the budget funding allows. And what is the main thing? The main thing is not to lose the enthusiasm that’s built up. People believed that it is possible to live in the countryside; the official support is very good. And if we always say sorry, we do not have money, then perhaps no people would remain to provide money to. I’m serious, we frequently encounter such situations, and I would like special attention be be given to this issue.

My second proposal concerns roads. Regional authorities should of course be given the right to decide which villages to work with first. Referring to the net cost of these roads, I would like to suggest that authorities first engage in quarries located near residential areas. Sometimes they bring construction materials from far away when the same materials can be found around. I tell them: “Lets bring materials from this quarry.” But they say: “No, a license must be obtained.” This is a big problem. Could we ease this problem and look for construction materials at local quarries, located near areas where roads should be built? Could we do without roads paved with concrete and asphalt? Recently I was abroad and I asked: “Why do roads that aren’t paved with asphalt lead to your plants?” They said: “We are not allowed to do this; the environmental situation does not allow it.” We in Russia must pave the roads with concrete or asphalt, though there are methods that make it possible to build good roads using local construction materials.

Another issue I want to address involves health professionals…You said that health professionals who come to rural areas get one million roubles in pay. In the countryside there are municipalities commonly referred to as industrial communities. They were called so because once they boasted coal mines or other such facilities. But now all of them are closed, the industrial communities are the same villages, but a health professional cannot find a place there and cannot get the pay. It seems that the official classification should be changed in order to provide these municipalities with health services equal to the services other rural residents enjoy.

The next issue is very topical, Mr Medvedev. It involved the refinancing of farms. This issue has already been addressed at this meeting. I only want to place additional emphasis on it; even in the Ryazan Region (I am a deputy of the local Duma, I am familiar with the situation) in 2010 and 2011 there was a drought, and locals failed to repay their loans. In 2012, drought affected 60 percent of the area. This is to some extent better than in 2011, but locals might perhaps fail to pay back their loans; they could lose the capacity they accumulated when new agricultural facilities were built. Locals began working but they have no money to pay back loans, their efforts have yet not paid for themselves. It seems that this problem must be settled. Of course, interest rates should be subsidised, because these are loans…Banks say: “Yes, we can.” But Mr Medvedev, I believe that this problem can be resolved.

As for the social sphere, the issue is related to labour. If we continue to build new housing at the same pace as now, the labour problem will be resolved.

Regarding education, Mr Medvedev, I believe that the programme should be adjusted so that specialists who come to work in rural areas are prepared to work in modern conditions. Frankly speaking, their curriculum… It is impossible to work in the conditions we have now. They are much higher than they teach at educational institutions. That is all, briefly. Of course, we have many proposals but they have all been articulated here and I don’t want to repeat them. Thank you. I invite you to Avangard and to the Ryazan Region.

Dmitry Medvedev: Thank you very much.

Alexander Popov (Director General of the company Zarya, Tula Region): May I?

Dmitry Medvedev: Try to be brief because it’s time to wrap it up.

Alexander Popov: Tula Region, Zarya livestock breeding farm. I am the director general of the enterprise. Since 2005, thanks to the National Project, we have modernised livestock farms, doubled cattle population and achieved some results. The village of Dedilovo, where we have our management headquarters, used to be the town of Dedoslavl, the district centre, but nothing was invested in it. Thanks to the National Project, the pilot project developed in 2008, our enterprise was able to launch the initiative that was supported by the region and the district and at the federal level.

Since 2008 we have built the site, laid down power, gas and water supply lines and prepared the site for 58 houses. As of today 16 houses have been built, three foundations for next year have been laid, last year we refurbished the school for 200 pupils, a good, an excellent school. We are currently building a dining room with a covered passageway, a gym and we are starting to build a kindergarten, water purification facilities, a medical centre and sports facilities, including a stadium. Thank you very much for keeping this programme in place because without it rural life would have been very difficult.

We are the base enterprise for two agricultural colleges where all the students have on-the-job practice and we are working closely with Orel Agrarian University whose students also come here for work experience. When students come here and see that construction is under way and the countryside has a future their eyes light up. At present we have 300 workers, 30% of whom are under 35. It is a good sign and it is pleasant to see mums pushing prams in the village again. This year 16 kids were enrolled in grade one, Five years ago there were just five.

People are fired up and begin making plans for the future. I am grateful to you for letting this programme go on. But we have another sore question. Yes, in recent years we have brought gas supply to eight communities under the three programmes run by Gazprom, the region and the agricultural authorities. Project documentation and cost estimates are shortly to be completed for three more agricultural communities. Practically the whole of our rural municipal entity will be 100% gasified. We are grateful for this.

We are now launching projects to build roads between rural communities. The problem that arises is as follows: suppose we are building a 5 km road from one settlement to another and there is a production facility on the way making approach impossible. We would like to see this issue discussed: having at least an approach road to the production facility financed on a fifty-fifty basis. The road must be linked up to these approach roads to the production facilities if they are near. There is much to be done on this issue.

And of course the biggest headache is… Since the village is centred around our enterprise, the burden is large and we are heavily in debt. We essentially work to pay the banks, the chemical and oil people and even to pay wages, our finances are stretched. I would like to ask you to prolong the credit under the National Project. Five years would not be enough, we would like to have a 10-15 year deferment and continued subsidised rates. Then the countryside will get second wind as it were. If that issue is solved all the programmes will work. Thank you for your attention and your focus on agriculture.

Dmitry Medvedev: Thank you. Concerning the credit  extensions. Of course we will think about what to do because it is an important matter.  We are aware of this, the government is aware. At the same time…

Remark: It involves livestock breeding.

Dmirty Medvedev: Not only that. The case of livestock is obvious: the cycle is longer there because they breed cattle and things are much more complicated. We are engaged and we understand the situation. At the same time we should make plans for the future and see some horizon. All right. I would like to hear from our colleagues in government. Ms Skvortsova, can you say a few words about medical care for rural dwellers? The Healthcare Minister has the floor.

Veronika Skvortsova (Minister of Healthcare): Esteemed colleagues, I have to admit that the health of the rural population is much poorer than in the cities. The average mortality rate among the rural population is more than 16 per thousand compared with 13 in the cities. That includes mortality among various groups of children.

The incidence of cardiovascular disease, which is the most frequent, is more than 18% higher than among city dwellers. The death rate from external causes – poisoning, injuries and so on – is 40 % higher, from respiratory diseases, 50% higher. Of the diseases caused by social factors, the incidence of tuberculosis is 10% higher, syphilis, 7% higher, and alcoholism 7% higher. The percentage of these cases identified is substantially lower than among the urban population.

Esteemed colleagues, I would like to draw your attention to this because that challenge must be met above all by primary medical care facilities which must be accessible to rural dwellers. Most of primary care today is delivered by the paramedical and midwife centres (FAPs) of which we have 36,700. When together we worked out the modernisation programme we urged the need to pay particular attention to the renewal and preservation of the FAPs and parallel development of general practitioners and rural outpatient services. Before the end of the year we are planning to open 2,500 new general practitioner (GP) centres, 800 new FAPs and more than 200 rural outpatient centres. However, a review of progress in implementing regional modernisation programmes  -- we have carried out a close inspection of 25 regions – shows that the main effort goes into other levels of medical care. Most of the rural regions are lagging behind. We would like you to pay special attention to the fulfilment of these plans because rural medical care is lagging behind.

Considering that beginning in 2013 annual medical check-ups of children and adults will again be mandatory under the new Health Ministry regulations – differing for different age groups, under 40, between 40 and 70 and over 70  -- we are planning to acquire 200 mobile medical check-up complexes that will be deployed in the regions and will be equipped as well as urban ones.

The main problem is the shortage of personnel: the shortage of physicians in rural areas is four times more severe than in the cities and the shortage of nurses and paramedics is twice as high, so we all welcome the programme adopted in November 2011 under which young doctors (aged under 35) are paid a million as an incentive for them to move to rural areas. But I would like to note that we have failed to meet the target, today only 4,000 physicians have moved to the countryside whereas we have the potential to send up to 6,500 and then some. Therefore, we would like to ask, Mr Medvedev, that the programme be extended and we are ready, under the auspices of the Mandatory Medical Insurance Fund, to continue this programme in 2013 jointly with regional funds and regional authorities.

Finally, I would like to say this. The main killers are cardiovascular emergency pathology, combined injuries and external causes. It is impossible to cut the death rate by relying on the resources of the stationary facilities, general therapy and paediatric and general surgical centres that are close to the rural communities. As has been mentioned, there is a need to develop second-tier, inter-municipal stationary facilities. They underpin not only the industry but the whole infrastructure of the regions. They must be built into the development of the transportation network and other networks to ensure quick access. I would like to draw your attention to this because the development of inter-municipal centres – cardiovascular, traumatological and perinatal centres – is crucial to the modernisation programmes. I will be ready to report to you, Mr Medvedev, on the situation in every region in January of next year. Thank you very much.

Dmitry Medvedev: Thank you. Mr  Dvorkovich, would you like to comment on the proposals made by our governors and the heads of municipal entities?

Arkady Dvorkovich: Thank you. Esteemed colleagues, first of all I would like to comment on the proposals set forth by Nikolai Fyodorov. Of course we have discussed them in the government and I support what has been said here. Reservations have already been voiced, including on how to go about rural construction. But that is connected with the main question that has been raised by practically all the speakers today: granting broader rights to the constituent entities of the Russian Federation in deciding how to spend money. Money from the federal budget should be made available in accordance with certain criteria without specifying the objects of investment, but merely on the basis of certain criteria. The main criterion is the result. What result do you expect to achieve with the help of the resources made available? The results per a certain amount of money must be comparable. If a new club costs 10 million roubles in Tatarstan then it cannot cost 20 million in another region. This is simply inadmissible unless we are talking about severe climatic conditions such as in the Far North and so on. The amount of financing and the results must be commensurate, that is a very important criterion.

The same, incidentally, goes for rural roads. If, given other equal conditions, a rural road costs an average 15 million roubles, statistically, it cannot cost much more unless the conditions (I mean the terrain, the presence or absence of sophisticated engineering objects) differ substantially. We will proceed from this in endorsing, with the Prime Minister’s support, the rules that we are supposed to submit for the Government’s approval in accordance with the state programme. Of course, the draft rules will be mailed to the regions for discussion and then we will approve all this in short order.

Regarding rural roads. In fact, it is a very attractive area because one and the same amount of money can build a lot more kilometres of roads, this is even borne out by statistics. One can build thousands of kilometres of more beautiful and interesting roads at relatively lower cost. But we have discussed and we support the proposal of the Ministry of Transport and the regions either to redefine the existing category of roads (category 5) or introduce a new category while allowing regular bus traffic on these roads. One can indeed borrow European experience, with bus turnouts that will make it possible for vehicles to pass by without limiting speed too much. Of course, speed is reduced but to an acceptable degree, whereas the cost savings will be considerable, it comes out much cheaper and we would be able to build a lot more. We would like these instructions to be issued to the Ministry of Transport, which would then quickly make proposals to the Government and adopt the necessary internal regulations.

As for generally accessible subsoil resources, this is basically within the powers of the regions. If there is a problem we are ready to tackle it at the federal level, but of course local materials should be used to the maximum extent: that also reduces the cost of road building.

As regards support this year, in the wake of the drought we are working with Rosselkhozbank, Sberbank, the VEB and Rosagroleasing to prolong and restructure loans. While Sberbank has the necessary resources, Rosselkhozbank and VEB do not have enough resources. Or rather, they can do it, but then they would have no money for new loans and credit support. So, the proposal is on the table for additional capitalisation of these institutions, but the final decisions have not yet been taken, more discussion by the Government is needed.

The main challenge is to ensure the next sowing season and to carry on the projects so that we have no problems during the next agricultural year. Regarding land – withdrawal of land and preservation for agricultural use – as has been said, proposals will be submitted shortly. Thank you.

Dmitry Medvedev: Thank you. 

Colleagues, I would like to end this meeting by repeating the statement I made at the beginning. The social development of rural areas is an integral part of a larger issue, the development of national agriculture. I think that all those present here – regional leaders, as well as heads of local government, and heads of schools and medical centres, are well aware of this. This is a highly challenging task, but we cannot simply avoid addressing it. That is why we never cut government spending on this and will continue dealing with these problems. I am not going to talk for any length of time summarising the results of our meeting. Our discussion today will be translated into a series of instructions, including one on roads because this issue is long overdue. Good-bye.