June 26, 2012
Russia to cap fertiliser prices, protect agriculture firms
The government has been ordered to work out measures to cap fertiliser prices and protect local agriculture companies by Russian Prime Minister Dmitry Medvedev, RIA Novosti reported on Monday (June 25).
"The situation may worsen from the start of next year when fertiliser prices will be set by the global market situation and seasonal factors," Medvedev said, referring to Russia''s hopes to become a full World Trade Organisation (WTO) member from August.
Russian authorities are currently regulating fertiliser prices and partly covering agriculture companies'' expenditures on fertiliser purchases. In 2012 the subsidies totalled RUB5 billion (US$150 million).
The prices for fertilisers have increased by 12% on average since June 2011, but are still below the limit established after negotiations between the association of fertiliser producers and agriculture companies, Medvedev said.
Once Russia becomes a full member of WTO, prices must be set out of control and the subsidies to the manufacturers of fertilisers that are sold on domestic market will be banned. Authorities are presently subsidising all producers except potash fertilisers ones.
Medvedev also ordered the government to develop proposals on discounts for petroleum, oil, and lubricants (POL) for farmers.
The government has been offering a 30% discount on POL for three years to support the competitiveness of farmers on global markets. The system expires on July 1.
Medvedev said that the country''s agricultural products need to be more aggressively promoted to foreign markets and promised to discuss measures with experts in the near future.