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Russia to allocate huge funds to develop food production

September 08, 2014, 2:17 UTC+3 MOSCOW

The funds, in line with the government plan, will allow Russia to neutralize the risks of the imported food embargo

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MOSCOW, September 08, /ITAR-TASS/. Russia will allocate huge funds to support a number of sectors of domestic agriculture, the country’s prime minister said in an interview with the Vedomosti business daily.

“We have launched a program to support the agriculture sectors that are poorly developed: fish breeding, hothouse vegetable growing, horticulture and segments of cattle breeding that demand support - beef cattle breeding and dairy cattle husbandry,” Dmitry Medvedev said.

“We will certainly provide additional funds for the sectors. I will not name the exact figure now, but the talk is about tens of billions of rubles,” Medvedev said.

The funds, in line with the government plan, will allow Russia to neutralize the risks of the imported food embargo and will help the country provide itself with food products and export them. There are possibilities for that: Russia owns 9% of the world’s fields, 20% of global water reserves and has warm climate regions.

“We should feed ourselves and others,” Medvedev said. “Why should we constantly eat foreign-made fruits?”

Besides efforts to boost agricultural production, relations between suppliers and retailers will have to be organized. “Earlier, retail chains ignored our agrarians, both big and small. It was more convenient for them to work with foreigners and disadvantageous to break the schemes,” he said.

“Now [in conditions of Russia’s response sanctions banning imports of food from Western nations] they have to. Representatives of retail chains and agrarian associations were looking at each other in such a nice way at the meeting!” Medvedev said.

Russian officials and companies came under the first batch of Western sanctions, including visa bans and asset freezes, after Russia incorporated Crimea in mid-March because the West and Kiev refused to recognize the legality of Crimea’s reunification with Russia despite Moscow’s explanations that it was legal.

The West announced new sectoral sanctions against Russia in late July over Moscow’s position on Ukrainian events, in particular, what the West claimed was Moscow’s alleged involvement in mass protests in Ukraine’s war-torn southeast.

In response, Russia imposed on August 6 a one-year ban on imports of beef, pork, poultry, fish, cheeses, fruit, vegetables and dairy products from Australia, Canada, the EU, the United States and Norway.

Speaking about the terms of Russia’s food embargo, Medvedev told Vedomosti that “if our partners come to senses and all this senseless sanctions story folds, we will react accordingly.”

“I hope by then our suppliers are able to occupy a worthy place on the counters,” he said.

On August 29, 2014, the Russian government instructed the Finance Ministry and the Agriculture Ministry to include domestic agriculture development in the list of priority economic sectors when choosing investment projects as part of the project financing mechanism.

Russia's Agriculture Ministry assesses additional expenditures on accelerated agricultural product import substitution at some 86 billion rubles ($2.3 billion) for 2015.

The current state program of agro-industrial sector development for 2013-2020, which does not take into account new development tasks, envisions state support of some 200 billion rubles ($5.4 billion) annually.

The list of products whose imports Russia banned as part of its response sanctions to Western nations includes cattle meat (fresh, chilled and refrigerated), pork (fresh, chilled and refrigerated), poultry meat and all poultry edible by-products, salted meat, pickled meat, dried meat, smoked meat, fish, clams and other water invertebrates, milk and dairy products, vegetables, edible roots and tuber crops.

The list also contains fruit and nuts, sausage and analogous meat products, meat by-products or blood, as well as products made of them, ready-to-eat products including cheeses and cottage-cheese based on vegetable fats.

Russia has repeatedly dismissed Western allegations that it could in any way be involved in protests in the southeast of Ukraine, which started after Crimea refused to recognize the authorities propelled to power during a coup in Ukraine in February and reunified with Russia in mid-March after some 60 years as part of Ukraine.

Fierce clashes between troops loyal to Kiev and local militias in the southeastern Ukrainian Donetsk and Lugansk regions during Kiev’s military operation to regain control over the breakaway territories have killed hundreds of civilians, brought massive destruction and forced hundreds of thousands to flee Ukraine’s embattled southeast.

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