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Russia may turn into large exporter of food if it supports farmers

October 09, 2014, 18:25 UTC+3 Zamyatina Tamara
© ITAR-TASS/Yevgeny Kurskov

MOSCOW, October 9. /TASS/. Russia is going through a moment when it can change the situation in its farming sector radically on the background of sanctions against it and become a leading global exporter of foodstuffs over a period of five to ten years, agrarian experts told TASS in connection with endorsement of a government roadmap for agricultural import substitution in 2014 and 2015.

The government hopes that state support will help replace 65% of imported meat, 30% of dairy products and 30% of vegetables purchased abroad. The cabinet of ministers has submitted a bill on farming sector development to the State Duma. It provides agricultural producers with a level of state support that is given to producers of natural resources.

The governmental roadmap for agricultural imports substitution in the years 2014 and 2015 envisions emergency support for agricultural producers in addition to the existing state programme of farming sector development in the period of 2013 to 2020, says Natalya Shagaida, the director of the Center for Agricultural Policies at the Russian Academy of the National Economy and Civil Service.

“In line with the Roadmap, the state will continue subsidizing the costs incurred in the process of loan servicing by those who produce and process agricultural products, but I’m afraid priority will be given to agricultural holdings, although their stability in the agrarian sector is highly questionable,” Dr. Shagaida said. “Large, medium-sized and small operators should have equal opportunities to conduct their business on the agricultural market.”

“Besides, subsidizing is far from the best instrument of state support,” she said. “As long-term loans are introduced, more and more governmental finances go off to banks and access of other producers to aid becomes restricted.”

“Governments play a decisive role in the development of the farming and processing sector worldwide and if one is to select the most practically meaningful and efficacious measure, stakes should be put on businessmen, the chief executives of agricultural organizations, farmers, and residents of rural areas,” TASS was told by Vassily Uzun, a senior research fellow at the Academy of National Economy and Civil Service.

“At present, emphasis in the agrarian sector is made on large operators, on agricultural holding companies, many of which have been set up by the businesses registered in offshore zones,” he said. “The problem is agriculture is the right sphere for well-cooperated small businesses rather than monsters in the market of foodstuffs. It’s sheer wishful thinking to hope that a rural tycoon of some kind will hire 20,000 workers and will feed the nation.”

“And yet the budgetary monies go off precisely to the biggest agricultural banks and agricultural leasing/holding companies rather than to the hundreds of thousands of farmers and landowners living in the countryside,” Uzun said.

“To give a real boost to the farming sector, Russia needs to activate the energies of its people who is the only force capable of cultivating our vast lands,” he said. “Russia’s rural population totals 37 million and 20 million of consists of able-bodied economically active individuals. They should get assistance in the form of loans, contracts and connections with big business.”

“These people live on their own land and they will be tilling it and they won’t go away from it anywhere unlike the executives of holding companies,” Uzun said.

“At present, the agrarian lobby is trying to pull the blanket of governmental aid its own way and it’s big business that raises the upper hand as a result but Russian agricultural will receive a real booster when support for different categories of landowners takes practical contours,” said the director of the Academy’s Agrarian Research Center, Alexander Nikulin.

“There’s a need for a special program of assistance for private households and farms and not only super-large agricultural holdings,” he said.


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