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PRESS RELEASE


Russia Can Be Food Self-Sufficient, and Export, Putin Says

May 19, 2008 (EIRNS)—Declaring food security, food price stabilization, and development of the agriculture and agro-industrial sectors to be a top priority of his government, Russian Prime Minister Vladimir Putin today declared that Russia has every potential to be food self-sufficient, while simultaneously becoming a food exporter—"a major player in the international food market." The presentations by Putin and Minister of Agriculture Alexei Gordeyev to a conference on the agriculture sector made clear that Russia will use subsidies and protective trade measures—measures that go against the "free trade" rules of the World Trade Organization (WTO) that Russia is still attempting to join—to defend food production as a matter of national security.

Gordeyev told the meeting, held in the town of Yessentuki, Stavropol Territory, in the southern grain belt, that the Russian Federation is currently importing 40% of its food. Especially high is the level of meat imports (41% of consumption), due to the destruction of Russia's herds during "shock therapy" deregulation during the 1990s.

In preparation for today's meeting, Putin and Gordeyev conferred on Friday, May 16, and made public the content of their discussion. Gordeyev reported that 30% more acreage than last year has been planted with grain crops so far this spring. He stressed that yields are also going to be better this year, because more fertilizer are available as a result of the government's having raised export duties on fertilizer last year.

Specialists at the Russian Ministry of Agriculture, under Gordeyev, have opposed Russia's joining the WTO, on grounds that doing so would hamper the recovery of agriculture and damage the country's food security.

In his speech today, Putin said that agriculture has moved to the top of the incoming government's agenda, because of what's happening on world food markets: "the steep rise in food prices on world markets, which has seriously affected the situation in Russia." He stated that the poorest layers of the population have felt this the most — "pensioners, families with several children, and other socially vulnerable groups of the population, for whom food is their main household budget item." To protect the population, said Putin, the government must ensure price stability in the agro-industrial sector as a whole, through more effective anti-monopoly regulation and the use of subsidies.

Putin laid out five interim objectives for Russian agriculture:

  1. Increase gross output, especially of grain, through increasing the area under cultivation, as well as yields;

  2. Technological re-equipping of agriculture and the food-processing industry, using innovative land and technology leasing schemes and long-term credit.

  3. Achieve price stability, especially for motor lubricants and ferilizer, using "anti-monopoly regulation and subsidies";

  4. Better risk management and agriculture sector insurance;

  5. Constant monitoring of the food products markets, "and if prices exceed established limits, there should be automatic measures, and I mean purchasing interventions, and regulation using import and export tariffs."

Said Putin, "Russia has truly unique agricultural potential, which should enable us not only to fully meet our own needs, but to make our presence known as a major player on the world food market."

Gordeyev underscored that importing food, including 41% of the meat and 26% of dairy products, cost Russia $27.6 billion in 2007. These parameters have continued to rise in recent years. "Gordeyev considers it a necessity to increase government subsidies for agricultural producers," reported Prime-TASS. He posed this in terms of the need for urgent measures to cut food imports, in view of the world situation. Gordeyev told the meeting that Russian agricultural output can and must grow at double or more the rate of world growth in agricultural output (2.5-3 times faster, for grain and meat over the next 10 years, he specified).

Both officials linked the progress achieved so far to the operation of the National Project for agriculture, which is one of the four National Projects that President Dmitri Medvedev was on top of as a deputy prime minister. This included incentives for leasing arrangements in agriculture, and other ways of channeling investment and support to the sector—after the livestock devastation, the removal of huge swathes of land from cultivation, and the disappearance of thousands of villages during the 1990s.