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Harvester Operators to Be Fed from Budget
Russia’s President Dmitry Medvedev has made public the subvention procedures for grain exporters. The rate should be at least $40 per a ton and the subsidized export is to amount to 10 million tons, which is half of all export of 2008 and 2009. These efforts will cost to the government three times below the grain interventions, which cancellation hasn’t been declared so far.
President Dmitry Medvedev met yesterday with spokesmen of Russian Agrarian Movement Public Organization. The agricultural lobbyists arrived at the meeting with ready package of actions aimed at bolstering domestic agriculture, including the export subvention, compensation of railway rates and overhaul costs and the accelerated refund of VAT.
Russia gathered the record harvest in 2008 – more than 100 million tons in net weight. “The country’s requirements will be met in whole and the export potential will remain at 20 million tons to 25 million tons,” Agriculture Minister Alexei Gordeev specified.
But the crop was heavy worldwide, bringing down the grain prices. The wheat averages 3,400 ruble a ton now and the price is plunging.
Evidently familiar with proposals even before the meeting, Medvedev supported requests of Russian Agrarian Movement Wednesday. Of interest is that the subvention rates are no secret to the market. According to Nikolay Demyanov, who is the marketing director at International Grain Co., the subsidizing rate could be $40 per a ton. The price of $180 per a ton for Russia’s grain makes it noncompetitive vs the grain of Ukraine, Europe and Australia. Given the subsidy, Russia’s producer may sell grain at $140 per a ton, he said.
www.kommersant.com
All the Article in Russian as of Nov. 13, 2008
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