2 Oct 2009 22:05


MALOARKHANGELSK, Oryol region. Oct 2 (Interfax) - Experts estimate that Russia could harvest more than 90 million tonnes of grain this year, said Russian President Dmitry Medvedev.

"This volume enables us to cover the domestic consumption needs and to preserve our export potential," the Russian president said.

"The potato and vegetable harvest is expected to be no less than last year," Medvedev said.

As for the sugar beet and corn production, "unfortunately, we are almost totally dependent on seed imports," he said. This is "a disgrace for our country," the president said.

Russia buys most of seeds it needs from abroad these days, Medvedev said. "We have sent our own resources down the drain," he said.

Currently, the most important task is to produce at least three fourths of the required amount of seeds of all crops cultivated in Russia, he said.

"Otherwise, we will be unable to guarantee this country's food security in just a few years, not to mention increase our exports," he said.

Medvedev called for involving "academics, the production resources, and the business" in resolving this problem.

A set of anti-crisis measures being pursued in Russia "has helped stabilize the situation," Medvedev said. The financing from the federal budget under a government program for the development of the agricultural sector was increased to 180 billion rubles this year, which is 30% more than in 2008 and nearly twice as much as in 2007, he said.

The government made the right and timely decision to subsidize the procurement of fuel and mineral fertilizers for agricultural producers, which helped them save 2.531 billion rubles, Medvedev said. "This is fairly good in a crisis year," he said.

Medvedev raised the problem of storage of the harvest that has been reaped. Russia needs about 300 modern elevators, which would cost $1.5 billion-$2 billion, he said.

The president also mentioned infrastructural problems, inappropriate use of the opportunities of domestic consumption, and technological backwardness as the key obstacles in employing Russia's agrarian potential.

Nevertheless, Russia "has regained the status as a leading grain power and has become one of the top four grain exporters along with the U.S., Canada, and the European Union," he said.

Russia is expected to export about 20 million tonnes of grain in 2009-2010, compared to 12.6 million tonnes in the two previous years, Medvedev said. In the next 8-10 years, Russia plans to increase its annual grain exports to 50 million tonnes, he said. However, exports depend heavily on "logistical infrastructure," he said.

"The Russian market's logistical infrastructure is still weak and underdeveloped and clearly lags behind the consumers' demands. The storage and transportation facilities are worn out. The facilities existing in the Central Federal District alone can store no more than 40% of the harvest," he said.

"The infrastructural restrictions affect the whole chain, from elevators to port terminals," Medvedev said, adding that old grain from the past season is still being stored at some elevators. "And where should the new grain go?" he said.

As for the development of ports, their aggregate grain transshipment capacity totals about 20 million tonnes now, he said.

Russia should double its transshipment capacity within the next 10-15 years, Medvedev said. As for now, the Black Sea region remains the key route for grain exports, he said.

"In fact, half of our exports go through the Novorossiisk deep-water port, although we are seeking to diversify grain exports, including to the Asia Pacific region. However, the aggregate potential of the three Far Eastern ports - Nakhodka, Vladivostok, and Vanino - is only 2 million tonnes. This is nothing. It's necessary to make some decisions there," he said.