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. Last Updated: 07/27/2016

Loans to Fanners Promised

The Russian government will make available 14 billion rubles worth of interest-free loans to collective and state farms whose crops were burned during a summer drought, Itar-Tass reported on Wednesday.

According to Alexei Ulyukayev, economic adviser to President Boris Yeltsin, the loan program is more an effort to grant emergency relief to livestock fanners who have been struggling with increased feed prices.

"The increase creates difficulties for profitability, especially for pork, beef and chicken fanners. We need to subsidize them", Ulyukayev said in an interview with The Moscow Times.

The announcement of the loans comes after months of government boasting of a bountiful grain harvest this year. In September, Vice President Alexander Rutskoi, then in charge of agriculture, said Russia's 1992 grain harvest would be 110 million tons, up from 89. 1 million tons in 1991.

But the decision to raise the state's grain procurement price in an effort to fill government silos also brought high er costs to the livestock industry. Other prices have also skyrocketed. A tractor that cost 15, 000 rubles a year ago now costs more than 500, 000 rubles.

The increased costs were compounded by a series of weather-related disasters -- crop fires in one area of Russia and torrential rains in another region -- that have reduced expected yields in collective and state farms by as much as 50 percent, Itar-Tass reported.

The government loans, to be available to state, collective and some private farms hit by "droughts and other natural calamities", must be repaid by Oct. 1, 1993, Itar-Tass said.

There are currently about 27, 000 collective farms and 14, 000 state farms in the Russian federation.

Such farms will also be released from their commitments to some government contracts.