8 Oct 2009 17:42

Russia could spend 2.8 bln rubles on milk interventions

MOSCOW. Oct 8 (Interfax) - Russia plans to spend 2.8 billion rubles on milk market interventions and another 300 million rubles storing the milk procured, Agriculture Minister Yelena Skrynnik told a press conference.

Skrynnik said the government would buy ultra pasteurized milk, butter and hard cheeses as well as dry milk.

Russian Prime Minister Vladimir Putin said at Thursday's government presidium meeting that the Agriculture Ministry had until December 1 to work out a procedure for conducting the interventions, which he said were designed to ease problems arising with seasonal variation in milk production and procurement prices.

"The state will buy up surplus produce and by so doing prevent milk procurement prices from falling, and the sale of procured milk will prevent unjustified price growth on the market for consumers," Putin said.

"I hope very much that these measures will enable dairy farmers to break even," Putin said.

This is only the first step, "but a step in the right direction," he said.

Agriculture Minister Skrynnik said the interventions would run to 300,000 tonnes in milk equivalent and that Rosselkhozbank loans would be used to fund them.

"The procedure is being finalized, but it will certainly involve buying up the sort of produce that stabilizes prices in conditions of oversupply. We'll be able to control prices better during these periods and support farmers," she said.

The dairy market interventions will begin next spring.

The Agriculture Ministry plans to change the technical regulations for milk and dairy products soon. "The prime minister has ordered amendments to the technical specifications drafted in order to ensure the ability of farmers to sell their product at fair prices," Skrynnik told journalists.

It was reported earlier that Putin criticized the Agriculture Ministry for deficiencies in the technical regulations.