18 Jan 2010 16:04

Govt to support foreign companies producing agriculture equipment in Russia

BERLIN. Jan 18 (Interfax) - The Russian government intends to support foreign companies that set up production of agricultural machinery in Russia.

"We will support companies that organize the production of agricultural technology here, since they produce modern, highly-engineered machines and they create jobs," First Deputy Prime Minister Viktor Zubkov told reporters in Berlin. He was there heading a Russian delegation to the international Green Week 2010 exhibition, where more than 120 Russian companies were presented.

Such leading producers as Claas and John Deere moved into Russia after customs duties were raised on some imported agricultural machines, most importantly combines, Zubkov. This is positive in the sense that farmers can get efficient, quality equipment, he said. "Meanwhile, it doesn't turn out that way with Russian producers, no matter how much money we give them," he said.

The state of affairs in the agricultural machinery sector is much the same as in the automobile industry, Zubkov said. When Russia hiked its foreign-car import duties, virtually all the world's auto giants set up their own production in Russia. "This is a common occurrence," he said.

Zubkov said he recently put it directly to Russian farming equipment manufacturers: "I asked them straight out: 'Aren't you afraid that foreign companies are squeezing you out of our market?' And after that talk I had the feeling that it hit home with many of them."

Domestic producers ought to take a serious approach, Zubkov said. "One needs to seriously think about maybe just producing one or two kinds of world-level agricultural technology," he said.