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Russia’s accession to WTO may bring billions in losses for grain industry

December 03, 2011, 12:00 UTC+3

According to the union’s calculations, annual losses will be equal to around 56 billion roubles

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MOSCOW, December 3 (Itar-Tass) — Russia’s accession to the WTO may bring several dozen billions of roubles in annual financial losses for the grain industry. This appraisal was given by president of the Russian Grain Union Arkady Zlochevsky, speaking at the conference “Russian agro-holdings”.

According to the union’s calculations, annual losses will be equal to around 56 billion roubles. “This is a tentative appraisal of annual losses of grain producers,” Zlochevsky specified. Over 50 percent of this figure are potential losses of grain producers.

For instance problems that will face pig-breeding (it plays a huge role in consumption of forage grain), notes the president, “mean for grain producers losses of around 18 billion roubles in the sale market – what we shall lose in fodder grain,” Zlochevsky said.

The president noted that the import duty for pork within the quota drops to nil, outside the quota – to 65 percent. Besides, it is expected a drop in duties on import of live pigs (from 40 to five percent), which will lead to serious risks for pig-breeders. Besides, personal households where up to 40 percent of pigs are bred, “will not stand competition as against import and will start disappearing”, stated Zlochevsky. Fodder grain, facing failure to be exported, “will be also a blow for grain-growers”, continued the president.

As a result, it will be necessary to remake the current structure of production, which is not a simple thing,” he went on to say.

Zlochevsky also noted that following Russia’s admission to the WTO, it will be possible to import into Russia any beef under the brand of high-quality beef. “Consequently, we shall not receive a market of high-quality beef, and projects of meat horn cattle will be under a serious blow,” Zlochevsky added. In turn, this will affect the grain industry whose losses may total 12 billion roubles.

These are potential losses, Zlochevsky continued, since Russia only starts breeding meat species of horned cattle, presupposing grain fodder for bull-calves. The project of the Miratorg agricultural company on building Russia’s largest enterprise on breeding of highly productive meat breeds of horned cattle, may go bust. The same fate is in store for other companies.

Besides, when Russia joins the WTO, Russian agriculture producers will have to purchase mineral fertilizers at world prices from January 1, 2013 whose cost now is between 307-308 US dollar per tonne, while domestic prices cost around 7,800 roubles per tonne. “We shall pay 307-308 dollars per tonne as against the present level of prices plus the AVT.

“Besides, there is a prospect for a rise in outside prices,” Zlochevsky added. As a result, prices on the domestic market will rise by 40 percent from January 1, 2013, and losses of grain producers will amount to 21 billion roubles, the president emphasized.

Besides, grain producers may lose from problems which will affect such sectors as bioenergy and organic manure – another three or two billion roubles in losses, respectively, the president said.


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