September 25 2002, 10:55

Russia: Novosibirsk authorities about the issue of grain excesses

Governor of Novosibirsk region Victor Tolokonsky thinks that prices in the grain market have dropped onto the lowest level for many years. Low purchasing prices for grain and livestock products are depriving farming businesses of the possibility to earn the means for further development of production. According to his estimate, profit of farming industry of the region this year will be 30 to 35 percent lower than last year, although physical volume of production has not changed, Politsib.ru reports.

The situation that has formed forces regional authorities to raise the question of supporting domestic producers before the government. According to Deputy Governor Victor Gergert, there are four issues on the agenda. First, according to Gergert, in Novosibirsk it was considered to be absolutely unacceptable to lay in store into the State Reserve storages farming produce from other countries (Ukraine, Belarus), which is being currently practiced. Second, Novosibirsk authorities vote in favour of imposing additional restrictions on imports of farming produce. Third, reduced railway rates for grain transportation should be established for Siberian regions, otherwise local grain producers if try to export grain via Black Sea ports are obviously in a loss position before farmers from the south of Russia. Forth, they are not happy with the intent of federal authorities to perform commodity interventions in the grain market through the Federal Reserve Corporation (a state federal agent). They are sure that it will be much more beneficial if it is the regions, not the federal centre, who are allowed to manage the funds, allocated for the interventions.

Mr. Gergert believes that Novosibirsk farmers, who have grown a rich grain crop, should try and sell a part of their product for export, but not through the ports of European Russia, where "the competition is crazy", but from Vladivostok. He is sure, buyers for Siberian grain will turn up either in China or in other Asian markets.

The Governor is busy with searching for extra possibilities for selling local grain both abroad and in other subjects of Russian Federation. In the nearest time he is to discuss the issue of supplies of Novosibirsk farming produce with authorities of the Republic Sakha-Yakutia.