Russia’s Deputy PM Dvorkovich does not rule out targeted grain interventions in 2018

18.12.2017

Russia’s Deputy Prime Minister Arkady Dvorkovich did not rule out targeted grain interventions in 2018, adding though that subsidized railroad rates would be used as the main instrument to support the sector.

Russia’s Deputy Prime Minister Arkady Dvorkovich did not rule out targeted grain interventions in 2018, adding though that subsidized railroad rates would be used as the main instrument to support the sector.

"I do not rule out targeted (grain interventions - TASS), but we are still going to focus more on subsidized railroad rates," he said Friday.

Russia’s Ministry of Agriculture considers grain interventions to be an ineffective mechanism for regulating prices under the current market climate. According to Agriculture Minister Alexander Tkachev, around 4.5 mln tonnes of grain are already stored in the interventional fund, and 5 bln rubles ($85.63 mln) will be spent on its maintenance this year. If grain interventions begin, the fund will increase, leading to a surge in storage costs. In addition, there are problems with storage capacities for such grain volumes, Tkachev said.

Earlier, the Agriculture Ministry did not rule out the possibility of grain interventions in some Russian regions before the end of 2017. At the same time, the key mechanism for stabilizing grainprices this year was subsidizing domestic rail transportation of grainexports. As a result, the ministry has already noted the increases in grainprices.

According to the Agriculture Ministry’s forecast, in the 2017-2018 agricultural year, which will end on June 30, Russia will have exported 45 mln tonnes of grain, including 35 mln tonnes of wheat.

Dvorkovich said earlier that the government is preparing a decree to partially compensate expenses on transportation of grain by rail from regions located long way from ports, which will allow additional deliveries of 3 mln tonnes of grain.

The decision to subsidize railroad transportation services, particularly of grain, is hoped to work out and help agriculture producers, as President Vladimir Putin said at the annual news conference on December 14. He added though that the option of state purchases of grain is not abandoned either.


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