Granting credits to household plots couldn’t be viewed as a measure to fuel agro-industry. It is rather the disguised form of social allowance.
Photo: Dmitry Saltykovsky
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The Uncultivated Project
In Russia, household plots that cover roughly 3 percent of the cultivated land yield nearly 60 percent of agrarian product. At the same time, mid/big farms that account for less than 40 percent of the overall production cover more than 70 percent of such land, according to preliminary data of All-Russia’s Agrarian Census.
The middle/big farms of Russia could be split into three main categories, i.e. the high-efficient grain farms of southern Russia, Privolzhie and Altai, low-efficient grain farms of other regions and middle/big cattle farms.
The advance of Russia’s agriculture is rather extensive with the pace of the Gross Value Added down from 5.5 percent in 2003 to 1.1 percent in 2005 and – 1.6 percent in the first half of 2006 (vs. the GDP growth of 6.5 percent). The reason is the high portion of low-efficient farms. In April 2006, said Economic Development Ministry, more than 63 percent of the farms had past-due payables. No more than 15 regions could be viewed as grain yielding, though 55 more regions use area under crop.
Despite the pretentious name of the project, the National Program of Agro-Industry Development, which benefits from 20 percent of all federal money allocated for agriculture in 2006, is mostly targeted at developing cattle breeding and encouraging small farms, including the household plots. Household farms, for instance, are sustained by loans granted at rates with the 100-percent funding.
But the no-interest crediting could be hardly viewed as a measure to set agro-industry in motion. It is rather the disguised form of the social allowance, which the government doesn’t plan to abandon in favor of improving efficiency of agro-industry, according to analysts.
www.kommersant.com
All the Article in Russian as of Aug. 09, 2006
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