Better govt support needed for Russian food exports - experts
MOSCOW. Nov 8 (Interfax) - Food exports from Russia require more effective and targeted support from the government. This is especially important in light of plans to join the WTO, agriculture market experts say.
With the commitments Russia needs to undertake to become a WTO member, which exclude direct subsidizing of agriculture product exports, we need to find ways to provide real government support to domestic exporters, Ivan Obolentsev, the chairman of the RUIE Agriculture Commission, told Interfax. We need to especially support those that our providing high added value food products abroad, including poultry, pork, meat and dairy products, he said.
"This can be done through a system of compensation measures, for example, that would envisage grants for acquisition of fodder ingredients, equipment, breeding material and other components that make up export costs," Obolentsev said.
The current mechanisms of government financial aid for industrial exports are not, as a rule, aimed at food exporters, said National Food Exporters Union President Dmitry Bulatov "Or when budget funds for the indicated purposes are distributed, agriculture product suppliers are unfairly left to one side," he added.
"Russia's export support system has always been mainly oriented toward suppliers of machinery and technical production, which work with foreign partners on a long-term basis," he said. "Food industry exporters, even the hi-tech ones, are bypassed when budget funds are distributed, and even more so for agriculture product exporters."
As a WTO member the emphasis needs to be moved from direct support of exports to support of export oriented production, Bulatov said. "First and foremost a tax breaks system needs to be developed and a system of easy loans for the development of export production. Such support mechanisms are very different from the current practice of compensating a part of export loan interest rates, as companies would receive the support before and not after it exports its goods," Bulatov said.
Easy insurance for export oriented production is "very relevant," he said. "The entire support procedure must be as transparent as possible," he added.
Over the past decade, exports of agriculture products have surged 500% and reached nearly $10 billion, the Union says. The poor harvest in 2010 and a ban on grain exports meant that exports totalled $8.7 billion in 2010. Food imports, meanwhile, increased by $5.4 billion to $33.8 billion, making an agriculture goods trade deficit of $25.1 billion.
If the current trend remains and food exports do not obtain government support, exports may climb to $13 billion by 2015 but imports will surge to $50 billion and the deficit will reach $37 billion, Bulatov said.
New ways to support exports need to be established now and not after accession to the WTO, he said.
Events for 2012 that aim to boost Russian food exports include a conference on Russia's role and place in the global food system (April 2012), a Russian exposition at the Salima international food fair (Czech Republic, February 2012) and the Russian Food Exporters Exhibition Rosprodexport (November 2012).