Procurement for intervention fund could total 1.5 mln tonnes of grain - Zubkov
MOSCOW. Nov 14 (Interfax) - Procurement for the intervention fund could total 1.5 million tonnes of grain, Russian First Deputy Prime Minister Viktor Zubkov said at a session of the Russian government presidium.
"It will be necessary to procure some amount of grain - most likely 1.5 million tonnes, maybe 1.4 million tonnes - for the intervention fund," he said.
Russia's mechanism of procurement intervention (procurement of state grain), operating since 2001, is directed at stabilizing the market price for grain and supporting farmers. If grain prices fall sharply, the government pulls excess grain from the market in order to drive the prices back up.
Procurement interventions may be needed in regions in Siberia and the Urals this year, where there will be a surplus of grain.
Such operations involve the owner of grain selling product to the government at a defined price, but with the right to buy it back in the event the market situation changes. The original intervention mechanism did not provide such a right.
The intervention fund currently has over 6 million tonnes of grain procured in previous years.