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. Last Updated: 07/27/2016

Ministry Proposes $47M Farm Program

With the new sowing season fast approaching, Agriculture Ministry officials Tuesday presented a new program to the State Duma designed to help struggling farmers pay off their debts — but were unable to tell them how to qualify.

The new program, a draft law, calls for two-thirds of the Central Bank’s 25 percent refinancing rate to be subsidized from the federal budget via regional administrations — allowing agricultural producers with a clear credit history to purchase seeds, fodder, fuel, spare parts and fertilizers.

Enterprises producing oil, sugar, dairy products and spirits, and processing vegetables, fur, flax, grains, fish, meat, poultry and beer may also qualify if they are controlled by Russian entities.

No purchase of agriculture machinery will be available with the loans.

The budget has 1.4 billion rubles ($47 million) set aside to implement the program, which will enable farmers to borrow 8.4 billion rubles from banks, said Deputy Agriculture Minister Alexander Antonets.

But like a thunder clap in a clear sky came the query of a sole farmer — one that is supposed to benefit from the new loan scheme.

"So which bank should I go to to get my loan?" asked Valentina Zeltser, a farmer from the Novosibirsk region.

Zeltser said she just happened to be in Moscow and decided to stop by the Duma’s agriculture committee meeting to ask for help getting a 100,000-ruble ($3,500) loan to purchase a tractor, a harvester and some land.

But not one of the meeting’s participants — which included the designers of the new scheme from the Agriculture, Finance and Economic ministries and Rosselkhozbank — had the answer.

The deputy agriculture minister, hiding his eyes, said the plan still needed the approval of "several ministries" and will appear "in February."

Duma deputies were outraged.

"We are supposed to start our sowing campaign in the south of Russia in one or two weeks," said Deputy Ivan Meshcherinov, who headed the Pravokumskoye collective farm in the Sovetsky district of Stavropol Territory for 20 years before joining parliament.

"I am absolutely disappointed that nothing has changed in our agriculture policies for years," he said. "Government is always behind life. What was the point of wasting time at this meeting when the basic question of this farmer hasn’t been answered?"

Indeed, Russia’s farming sector is declining. The total debt of all farms now stands at 184.8 billion rubles ($6.6 billion), and 24,300 out of 27,000 enterprises, or 90 percent, have to be bailed out.

Another deputy, Boris Danchenko, proposed that the Federal Security Service, or FSB, "create a special structure to control federal expenditures in agriculture," adding that much of it has been stolen by middlemen and regional administrations.

Meanwhile, Bloomberg news agency reported Monday that the U.S. Agriculture Department extended an export program to Russia with $40 million worth of state guarantees to purchasers of U.S. domestic produce.

"While our [Agriculture] Ministry is dreaming, the U.S. one is doing the job," Vedomosti commented Tuesday.