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. Last Updated: 07/27/2016

Plan to Cut Food Import Fees Praised

First Deputy Prime Minister Yury Maslyukov's plan to lift import duties on a number of food staples and medicines would benefit the Russian consumer without hurting domestic food producers, experts said Thursday.

Maslyukov said Wednesday the state planned to stop taxing the import of some foods, but he did not specify which ones. Anatoly Manellya, head of the agro-industrial department at the government's Center for Economic Analysis and Forecasts, said Thursday that the plan currently being discussed provides for scrapping 15 percent import duties on meat, fish and vegetable oil.

"This would be excellent as a temporary measure because in many regions of Russia food shortages are becoming threatening," Manellya said.

A special working group headed by Maslyukov and including top economic ministers, Central Bank representatives and academics is supposed to present an anti-crisis economic program to the Cabinet by Oct. 20. In the draft plan, three urgent measures are being proposed to replenish the shrinking Russian food market, Maslyukov's spokesman Anton Surikov said.

Apart from the lifting of some tariffs and the reduction of others, these measures include allowing Ukraine, Moldova and Belarus to repay some of their debts to Russia with food supplies and setting up a special fund to finance centralized food imports in case of emergency.

Now is not the time for protectionist steps, Surikov said: "In the next few months we must think about survival measures. When our agricultural sector starts to come back to life and produce more food, a raise in duties may be discussed again."

According to Manellya, acting Prime Minister Viktor Chernomyrdin on Sept. 5 ordered all food import tariffs raised from 10 percent to 15 percent, hoping to give an additional boost to domestic producers already helped by the Aug. 17 ruble devaluation.

But some of these domestic producers were using imported raw materials, and the tariff hike only made the situation more difficult for them as meat imports shrank to one-third of pre-crisis volumes by October. They welcomed Maslyukov's plan on Thursday.

"We've got to have a choice of raw materials," said Iosif Babayev, director of Cherkizovsky Meat Processing factory said. A large share of the meat Cherkizovsky was using to make sausage before the crisis had come from abroad, but the drop in imports forced the factory to find new suppliers in Russia. "If the duties are lifted, imports will restart and we will have more suppliers to choose from. Competition will drive prices down."

Vadim Zuikov, head of the Independent Retailers Association, also praised the tariff-cutting plan. "This is great not only for us but also for the customers because imported goods will become cheaper by the same percentage by which duties are reduced," he said.

Russian drug producers would not mind if the government dropped tariffs on medicines f the equivalents of which are not produced in Russia. According to Vladimir Davydov, vice president of Rosmedprom, a group of Russian medicine manufacturers, the elimination of 15 percent tariffs on tuberculosis and cancer medicines would be a welcome measure.