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Government sees no reason to buy grain above 3 mln tons for intervention fund — Deputy PM

In total, from August 1 the state purchased 1,805,600 tons of grain to the tune of $452 mln

MOSCOW, November 24. /TASS/. There are currently no prerequisites for the purchase of more than 3 million tons of grain for the intervention fund, Russian Deputy Prime Minister Victoria Abramchenko told reporters on the sidelines of the First Russian Wine Forum.

"They [grain interventions] are going in line with all regulations until it [intervention fund] is replenished with 3 million tons. There are no prerequisites now to increase the volume of the intervention fund," she said.

Some industry experts propose to increase the volume of the intervention fund to 10 million tons, so that to increase the profitability of agricultural producers. According to them, by purchasing into the intervention fund it is possible to increase the cost of a ton of grain on the domestic market, "but there are other ways," to do it as well, the Deputy Prime Minister explained.

"As for regulation, leveling the costs of agricultural producers and achieving the level of required profitability, we have Decree 118. Let me remind you that when we introduced export duties on grain, we agreed that federal budget revenues would be directed to the industry. This year the industry received 20 billion rubles ($331 mln), which compensates 2,000 rubles per ton," Abramchenko noted.

In total, from August 1 the state purchased 1,805,600 tons of grain to the tune of 27.3 bln rubles ($452 mln). Trading is held daily on working days.

Earlier, Russia’s Agriculture Ministry announced plans to purchase up to 3 million tons of grain to the state intervention fund. In the future, in the event of a sharp rise in prices, grain will be sold to Russian flour milling and baking enterprises, and this will allow the market to "cool" and maintain a stable situation, the ministry noted.

The Russian authorities have carried out state interventions in the form of purchase and sale of grain since 2001 to regulate domestic prices. As part of purchasing interventions, the state, in order to support producers, purchases grain from farmers for an intervention fund, and as part of sale interventions, it sells it in order to prevent price increases.