Russian Agriculture Minister Alexey Gordeyev addresses participants of the Union of Russian Gardeners.
Photo: Evgeny Pavlenko, Kommerant
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New Way of Supporting Domestic Agriculture Proposed to the Federation Council
// Protocol
During government hour on Friday, Agriculture Minister Aleksey Gordeev spoke to members of the Federation Council on the state of agriculture in the country, measures to prepare for spring field work, problems of establishing quotas on imports, and state support of the agricultural industry. Once again, he showed his disagreement with the economic policy of the Ministry of Economic Development and Trade and the Ministry of Finance.
Aleksey Gordeev's speech on Friday in the upper house of Parliament turned out to be less effective than his speech in the Duma on February 16. At that time, the minister was invited to government hour in order to talk about problems in the agricultural industry and spring seeding. During the discussion, Gordeev spoke frankly to the deputies of the presence of insurmountable opposition between the Ministry of Agriculture and the government's financial and economic bloc, i.e., the Ministry of Finance and the Ministry of Economic Development and Trade. Then he complained that the government did not allocate enough money in the budget for developing rural areas, subsidizing the agricultural business, and supporting the restructuring of agricultural companies. He also said that “the ministry [of Agriculture] is altogether kept out of making decisions on limiting imports and regulating food shipments from abroad,” and complained that the government has not accepted the ministry's decisions on limiting imports of cheese and rice. Finally, Gordeev told the deputies that “we need to stop talking about liberal reforms and devote ourselves to state development of a market economy, as all developed countries have done.”
The minister did not make any such blunt statements yesterday. However, the discussion showed that he had not changed his position. For example, he called the government's customs and tariff policy “absolutely toothless”. In his words, in the last four years, it had introduced only two types of import quotas – on meat and sugar – at the same time as at least 80 types of quotas on food products are in effect in EU countries. “Everything that comes to us from the EU is subsidized. Deliveries of oil are subsidized 50 percent,” the minister explained and complained that “at the present time, grain shipments to the EU are closed to us, which has naturally had a negative effect on Russian agricultural producers.” So-called gray imports of sugar from Ukraine and Belarus also have a negative impact on producers [forged contracts and certificates are also use].
Further on in his speech, it was evident that quotas on beef were useful, despite the price increases they caused last year. It is just that domestic beef production cannot expand immediately, but needs five to seven years for this. But then, according to the minister, poultry production rose almost 20 percent last year and pork production will increase 10 percent this year. What this has to do with quotas on beef remains unclear.
On Friday, the minister also suggested one more original means of supporting domestic agricultural producers. In his opinion, tenders for supplying food and clothing to the army should be abolished and replaced with five-year contracts with suppliers. “The domestic producer must have absolute priority,” he explained, using the example of the American Army. “We have to go to long-term economic ties and move as far as possible from annual tenders, thus providing agricultural producers with the means to predict business for up to five years, let's say.”
The senators did not react at all to these proposals. In their resolution, they merely asked the government to overcome monopolism on the market for fuel and lubrication materials, stabilize prices, implement the necessary measures to support grain exports, and protect the domestic market. At the same time, the Ministry of Economic Development and Trade and the Ministry of Finance did not like that proposal to abolish tenders. Thus, the Ministry of Agriculture's insurmountable opposition to these departments will most likely continue.
Kommersant will continue to follow the development of events.
Irina Granik
All the Article in Russian as of Mar. 14, 2005
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