Interview by Vladimir Nesterov. Exclusively for Vestnik Kavkaza
Astrakhan producers sent about 50 offers on production as part of import substitution to the Ministry for Industry and Trade, as well as offers on production of equipment, components, and services which were necessary for the normal functioning of the industrial enterprises of Russia. The focus is on the Astrakhan machine-tool plant, which produces industrial equipment and cooperates with scientific institutes.
Gennady Gorbunov, senator of the Astrakhan region, chairman of the Federation Council Committee on Agricultural and Food Policy and the Environment, told Vestnik Kavkaza about problems of import substitution, agriculture, and the Caspian.
- After the Central Bank raised the key interest rate to 17%, many manufacturers faced the problem of high credit interest. Now the bar has decreased a little, to 15%, but it is still too high for credit policy. It became clear that our agriculture is not enough to support the whole country. The current anti-crisis plan which the government suggested, and which is almost accepted - what does it give to our agricultural producers?
- You said it right, that when the key rate was raised to 17% it was truly shocking for everyone, not only for agricultural producers of course. Now the key rate is 15%. Before carrying out spring-field work, when short-term loans for the purchase of fuel, for the purchase of seed, for the purchase of fertilizers and other inputs are largely in demand, you need to have sufficient funds to seed as much as the company of some or other form of property proposes, up to peasant farms. I think the government is assessing the situation. Agricultural producers will be allocated subsidized loans and aid from the federal budget, co-financing will be about 15% of subsidies from the federal budget. Everything else will be paid by agricultural producers. Now we all know that loans are 23-27%. But, perhaps due to lower key rates, banks will also be moving in this sector.
All levels of the authorities are reacting to this with understanding, the upper ones, and those who work directly on the ground. At the last meeting in Gorky that Dmitry Anatolyevich Medvedev held, these issues were discussed. And it was said that favorable conditions of lending are being created for agricultural producers to work with banks.
However, at the moment, the situation is not ideal. The compensation in general is significant, but 10% is also a heavy burden for an agricultural loan. The risks are great. Loans have risen, diesel fuel has risen in price, fertilizer has risen, electricity has risen, the seed that we use has also risen, unfortunately, except for corn, wheat, rye, and all other seeds we practically largely imported from abroad. And due to the devaluation of the ruble, of course, prices increased in ruble terms, costs increased. And this will affect the results, the outcome of work.
- The anti-crisis plan, correct me if I’m wrong, provides funding of more than 50 billion rubles for agricultural producers. What do you think, is it too much, or is it too little?
- It is not very much. If we build football stadiums which cost about 50 billion rubles, then 50 billion rubles for agriculture is also not very much. In addition, unfortunately, much of the funds allocated from the federal budget goes directly to the co-financing interest rate. In the future this is the road to nowhere. We must move on subsidies to finance the project, where there is no middleman. The initial stage of a package of measures allows us to reassure agricultural producers that the state will not leave them alone with the problems that will arise in the future.
- What are the other problems faced by farmers? What factors hinder the development of agriculture?
- There is not a very good harvest of winter crops. Climatic conditions were not very favorable for the majority of areas: the Volgograd region, the Rostov region, Stavropol Territory, Altai Territory. We are concerned about the implementation of the anti-crisis measures and import substitution.
- Of course, it is impossible to substitute imports with domestic products right away. How much time, in your opinion, will this transition take?
- In various directions, it's different, there's no formula. To make up for the shortage of meat cattle, I think we need a decade, milk - 3-4 years. For the rest, maybe less. Grains have no problems, on poultry meat, I think, also, almost non-existent problems.
The main problems are milk, dairy products, beef, winter vegetables and fruits. We have an opportunity with the Crimea redirection and distribution to where the main areas of our Russian gardens and greenhouses where, where there are more days of sun, plus temperatures, so that we manufacture our products.
We have now shifted to other countries: Turkey, for example, and other countries which are willing to fill the niches. But we express one requirement – quality of the products.
- Food prices are constantly growing with the exchange rate. That also includes prices for Russian products. Why is this happening?
- I am 99% sure that the increase in food prices takes place at the level of intermediaries, retailers. Wholesale trade, agricultural producers have not been able to raise prices because they have already sold a large part of their production and it lies in the vaults of commercial networks. The prosecution service appeared, and is checking everything right now.
In other countries, trade networks do not create procurement outside the country. They are buying in wholesale warehouses, etc., which are under the jurisdiction of other manufactures and offer trade networks. We have trade networks, which are creating procurement directly from other countries, creating their own wholesale outlets near retail chains. I think this is not exactly proper.
Therefore, it is better to track down more, and when there is a large wholesale link, in Moscow, for example, they’re buying. In addition, here, the prices and everything else is controlled.
- Is it possible to freeze prices for some basic types of products?
- I think life will make us do it, because we have a significant portion of people who live below the poverty line. The USA, for example, is not afraid of stamps. They give this group of people vouchers for a certain amount, with which they go and purchase. This would be in the interests of everyone. This would be an official order for agricultural producers. There would be no need for additional funds.
If there is a price to go higher and higher, we will obviously continue to work on improving the law on trade. Recently, we, senators, have signed an amendment that in all forms of extra payment, retail chains would be entitled to no more than 3% of the wholesale price at which they buy from producers. Only 3%. Right now it is significantly more. I believe it is time for everybody to share with people, and help in such a hard time. I think that most people are conscious and understand the situation, including workers of trade and all the rest.
- Tell us how to solve import substitution issues in the Astrakhan region?
- My own Astrakhan region, of course, is provided with for most of the products. The only thing , of course, is that we have there, in the zone of risk farming, grain farming is why we have not developed, because 120-130 mm of rain falls, so it's flour, grain. The regions produce almost 1.2-1.25 million tons of vegetable and melon production. We are self-reliant and potatoes give the markets of the Russian Federation a significant portion of potatoes, onions, peppers, vegetables and tomatoes. Recently, the Minister of Agriculture was in Sakhalin, arrived, saw onions, asked: "Where is this onion from?" And they answered: "From Astrakhan." So it's good to hear. Previously, there were only watermelons and tomatoes, and now Astrakhan potatoes, and Astrakhan onions. I would like once again to turn to our fellow members of the Customs Union, not to re-export from other countries against which we have imposed embargoes, sanctions. We must be honest and transparent in our relations. We are ready for our market, and the market of Russia is very capacious, giving it to our friends, but it is a quality product and they have produced the products themselves.
- In Astrakhan in September 2014, for the first time in Russia, a summit of the Caspian region countries took place. After that, was there a change in relationships with the Caspian countries?
- We have the port of Olya, which has some problems right now because of the sanctions against Iran. Negotiations are under way, and if this problem is solved, the port will work again at full capacity. We have cargo. It is wanted, but it needs more time. We all look forward with hope to when finally all the terminals of the port start working, which for the area for which it is built, for the region, is the budget, it's all the other revenues to the treasury of our region. With the others we have no problems. We work very closely, we have representative offices, consulates in almost all the states in the Astrakhan region's neighborhood, close cooperation is conducted at this level. Our Astrakhan region has worked, and is still working, very closely with Azerbaijan and other countries.
- Even in Astrakhan there is Heydar Aliyev’s Alley
- Yes, there is. The Astrakhan region in the south of Russia has more than 100 nations and nationalities living there. Thank God, all of them are friendly with each other, without any excesses. I think that this will continue. The South has always been a shelter for people who have suffered some problems, disasters at home. They have always gone to the Astrakhan region, we have Persian, Iranian blocks. Therefore, in this sense, Astrakhan was always welcoming, friendly and always helped people who had problems and difficulties.
- Scientists say that the number of sturgeon in the Caspian Sea has decreased 10-fold…
- 8 years ago, I was the initiator of the law banning commercial fishing of sturgeon in the Caspian Sea. With the help of President Vladimir Putin the law was adopted. I insisted that the fish found in poaching nets, would not be taken to the Astrakhan region, but destroyed on the spot. Lobbyists said that it should be taken to Astrakhan to process flour. But I insisted and my colleagues said that all this was destroyed on the spot. Indeed, this idea has been supported. But this does not solve the problem of replacing sturgeon. Unfortunately, there is still poaching. But the struggle continues. Powerful forces protect the Caspian Sea, border guards, coastguards, all working in this direction. Of course, the power we use even more, it is necessary to increase the cultivation of young sturgeon.
