Putin orders government to abandon meat imports
According to Putin, the program will be developed by the autumn of 2014 and will take into account all Russia’s obligations under its membership of the World Trade Organization and emerging Eurasian Economic Union. The emphasis will be put on those sectors where import substitution is "promising and necessary" and where Russian goods will be competitive in world markets.
"I am confident that through modernisation of industry, the construction of new enterprises and the competitive localisation of production in Russia we can – without violating international trade rules or introducing any restrictions and barriers – significantly reduce imports in many areas, and return our own market to national manufacturers," said Putin.
"When I say ‘Russian manufacturers’ I also mean, of course, those businesses with foreign participation or wholly foreign-owned enterprises that work on our territory and are subject to Russian legislation," he added.
Authorities believe the concept of import substitution will see an increase in targeted support from state agricultural bank Rosselkhozbank, with the money mostly allocated to problem sectors: beef, pork and milk production.
Targeted support will be expanded
State-owned Rosselkhozbank, which deals with the allocation of money to support meat producers, has already promised to fulfil the order of the President by increasing the number of producers involved in its support programs.
The bank has also issued a forecast on import substitution in the next few years, claiming that the largest prospect for substitution lies with beef producers and, to a lesser extent, pork producers. This is somewhat surprising, as Russian authorities recently claimed the country could not overcome the crisis in the beef industry and should abandon supporting it. However, Rosselkhozbank believes more soft loans will improve the situation.
"Active and consistent support for the agricultural sector, which has been implemented by the heads of the state since 2006 – first in the framework of the national ‘Development of agriculture’ project, then within a state program of agricultural development – creates all the prerequisites for achieving our Food Security Doctrine targets," said Dmitry Patrushev, chairman of the board for Rosselkhozbank. "Since 2006, our bank loans allowed our borrowers to develop more rapidly than the industry as a whole."
According to Patrushev, since that time, the bank’s customers have increased poultry production by 4.3 times (the average rate for Russia being 2.75 times), pork by 3.2 times (average - 80.3%), milk by 2.7 times (average – a decline of 1.3%), beef by 2.1 times (average - a decline of 9.8%). Soft loans made these companies more profitable, but a lack of funds prevented the bank from subsidising all its potential customers.
