Russian authorities to consider subsidizing 100% of transport costs for forestry exports
MOSCOW. Sept 14 (Interfax) - Deputy Prime Minister Viktoria Abramchenko has instructed government agencies and businesses to compile a list of measures to support the forestry industry totalling about 10 billion rubles.
Possible measures include raising the limit for subsidizing transport costs for forestry exports and introducing a dampening mechanism for payments on woodlot leases, according to the instructions Abramchenko issued after a meeting of the taskforce for the development of the forestry section amid external sanctions pressure, the deputy prime minister's office reported.
Abramchenko was quoted as saying that she instructed agencies to work with businesses "to compile a list of the most effective measures of support aimed at resolving logistics costs, subsidizing shipments and expanding markets."
"Foremost this concerns reducing transport expenses, which have risen severalfold on some routes. This measure will be particularly important for businesses located in the country's Northwest and previously oriented toward European markets," she said.
The Industry and Trade Ministry, for example, has proposed to consider raising the limit for export logistics subsidies to 1 billion rubles for the hardest-hit forestry companies and reimbursing 100% of expenses on product exports. The current cap is 80% of actually incurred transport costs within a set limit of up to 500 million rubles, and no more than 11% of the cost of the shipped product. The government recently approved increasing the latter limit for non-energy, non-resource exports to 25% for 2022-2023.
The meeting also discussed increases in payments for use of forest resources. "In light of the current situation, Deputy Prime Minister Viktoria Abramchenko instructed the Industry and Trade Ministry, Natural Resources Ministry and Federal Forestry Agency to explore the possibility of introducing a dampening mechanism in regard to lease payments. Specifically, when prices for forestry products decrease, it is proposed to equally reduce payment, and when there is an increase in prices and, accordingly, forestry companies' revenues it is proposed to raise payments and contributions to the budget," the statement said.
Abramchenko also supported the Industry and Trade Ministry's proposal to extend deadlines for investors to fulfill obligations under priority investment projects by two years.
About 10 billion rubles could be allocated for all the support measures, Abramchenko's office said.
"The situation today differs significantly depending on the geographic location of enterprises and key areas of business. We are seeing a decrease in the pace of production of export-oriented products, such as veneer and plywood. However, in some categories there is a steady upward trend in production and recovery of demand. For example, pulp production is at the same level as last year, while furniture [production] is a few percent higher," Abramchenko was quoted as saying.
"The key objective today is to create conditions for the stabilization of the situation, reduction of businesses' costs and the full recovery of export shipments of products with high added value to already new partners," she said.