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Volga Baikal AGRO NEWS Update on the Future for the Russian Agro-Industrial Complex !!!
Ministry of Agriculture: state intervention into the market can reduce the attractiveness of the agro-industrial complex for investors.
In the medium term, the country will be able to return to the stable business conditions.
State interference in market mechanisms can negatively affect the investment attractiveness of the Russian agro-industrial complex and the rate of development of the industry, said the head of the Ministry of Agriculture Dmitry Patrushev during the government hour in the Federation Council. He expressed hope that in the medium term, the country will be able to return to stable business conditions when there is no need for active government regulation. This should be facilitated by the stabilization of the global situation, the restoration of production volumes and traditional economic ties, D.Patrushev said.
At the same time, the head of the Ministry of Agriculture believes that the decisions taken on state regulation of prices, taking into account additional measures of state support, have showed a positive result: “The grain export quota in conjunction with export duties has already shown results – prices have slightly decreased,” – he said, adding that the funds received from the collection of duties will be returned to farmers in the form of subsidies to support production. D.Patrushev recalled that in 2021, 4.7 billion rubles were allocated to support millers and bakers, the funds were distributed between the regions and are now being brought to the recipients. “Now the prices for bread and flour have stabilized,” – he stressed.
The minister also spoke about support for the sugar and sunflower oil production sectors. “This year, support is provided for sugar producers in the form of preferential short loans for the purchase of raw materials. It was also decided to support them in the production and sale of products to retail outlets at a fixed price,” – said D.Patrushev. To stabilize prices for basic food products, the area of sugar beet sowing will be increased by almost 15% – it will amount to more than 1 million hectares. Also, sugar producers will be reimbursed for 5 rubles / kg for products sold at retail at fixed prices.
“Continued government price management will lead to negative economic consequences,” – commented the Rusagro group, one of the leaders of the sugar and fat and oil products markets.
As for sunflower oil, there will also be increased areas for oilseeds, which should contribute to an increase in production volumes, Patrushev continued. At the same time, producers of bottled oil will be provided with support in the production and sale of products at retail – subsidies will amount to 10 rubles per liter. Patrushev also recalled that the state is considering a systemic mechanism for stabilizing prices – the introduction of an export duty on sunflower seeds, as well as a damper mechanism for the export of sunflower oil.
On March 30, the government extended agreements to stabilize sugar prices until June 1, and for sunflower oil – until October 1, 2021. In December 2020, the Ministry of Agriculture, The Ministry of Industry and Trade, a number of manufacturers and retail chains signed an agreement, according to which the maximum selling price for butter is set at 95 rubles / l, the retail price is 110 rubles / l, the cost of sugar is set at 36 rubles / kg and 46 rubles. / kg respectively. The agreements expired on April 1, which could lead to higher prices for food, the government said.
The producers of sunflower oil, members of the Fat and Oil Union, are also ready to comply with the obligations on the cost of production, said the executive director of the union, Mikhail Maltsev. “Enterprises of the industry have repeatedly confirmed their readiness to provide wholesale prices at the level of 95 rubles. until the end of the season, and the prolongation of the agreement only formalized our intentions. All members of the Fat and Oil Union are ready to fulfill its obligations,” – TASS quoted him as saying.
