Federal Agricultural Budget in 2013

An Expert's View about Agriculture and Animal Husbandry in Russia

Posted on: 29 Mar 2013

This report explains that the aggregated federal budget of Russia’s three major federal agricultural institutions.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 3/13/2013 GAIN Report Number: RS1314 Russian Federation Post: Moscow Federal Agricultural Budget in 2013 Report Categories: Agricultural Situation Approved By: Holly Higgins Prepared By: Yelena Vassilieva Report Highlights: The aggregated federal budget of Russia’s three major federal agricultural institutions (the Ministry of Agriculture, the Federal Service for Veterinary and Phytosanitary Surveillance – VPSS, and the Federal Fishery Agency) in 2013 is planned to be 197.1 billion rubles ($6.4 billion), less than a one percent increase from the federal budget for these three institutions in 2012, and only 1.7 percent of Russia’s total federal budget for all federal ministries, agencies and services. It includes 173 billion rubles ($5.58 billion) for the budget of the Ministry of Agriculture, of which 121 billion rubles ($3.9 billion) will be directed to the state support of agricultural producers and processors. In February 2013, the Russian government discussed additional federal support to agriculture through the Ministry of Agriculture in the amount of 40-42 billion rubles ($1.3 billion - $1.4 billion). However, amendments and changes to current support programs have not been made to date. General Information: The aggregated federal budget of the three major federal agricultural institutions (the Ministry of Agriculture, the Federal Service for Veterinary and Phytosanitary Surveillance – VPSS, and the Federal Fishery Agency) in 2013 is planned to be 197.1 billion rubles1 ($6.4 billion2), a 0.2 percent increase from the federal budget for these three institutions in 2012, and only 1.7 percent of Russia’s total federal budget for all federal ministries, agencies and services. The budget of the Ministry of Agriculture in 2013 was planned at 173 billion rubles ($5.58 billion). This is a 0.45 percent increase from federal allocations to the Ministry of Agriculture in 2012 (172.2 billion rubles or $5.55 billion), but represents only 1.5 percent of Russia’s total allocations to all federal ministries, agencies and services. In 2012, the share of the Ministry of Agriculture in Russia’s federal budget was 1.54 percent, in 2011 – 1.6 percent. The budget for the VPSS will be 10.18 billion rubles ($328 million), a 6.9 percent increase from 2012, and the budget for the Federal Fishery Agency will be 13.9 billion rubles ($448 million), 6.7 percent less than in 2012. In addition to these three major federal agricultural institutions, two other agriculture- related institutions (the Russian Federal Forestry Service and the Russian Academy of Agricultural Sciences) will get 29.7 billion rubles ($957 million), and 7.7 billion rubles ($247 million) respectively, which represent 8 and 5 percent increases from 2012. Budget of the Ministry of Agriculture in 2013 The planned budget of the Ministry of Agriculture in 2013 is 173 billion rubles ($5.58 billion). Almost 70 percent of this budget, or 121 billion ($3.9 billion) will be spent for support of agricultural producers and the domestic food industry. Allocations for continuation of previously approved target programs will be 6 percent of the Ministry’s budget, allocations for crop and animal protection services will comprise another 6 percent, and the balance of 18 percent of Ministry of Agriculture’s budget will be spent for housing, social development of rural areas, education, applied research and development, health issues, international cooperation, social benefits to the staff of the Ministry, etc. In 2013 the government re-arranged budget categories for state support, separating support of crop producers from support of livestock producers in the Ministry’s budget. The forms of the state support have been changed also in accordance with the State Program 2013-2020 and Russia’s WTO commitments on agriculture (for more information see FAS/Moscow GAIN report: Agriculture Development Program 2013-2020 _ 11-6-12 and FAS/Moscow GAIN report on the GOR Resolutions on Distribution of Agricultural Subsidies: GOR Resolutions on Distribution of Agricultural Subsidies _ 1-25-2013). Thus, instead of subsidizing fuel, seeds, and fertilizer, federal support of crop producers will be in the “decoupled” form of subsidies per 1 hectare of arable land. Subsidies to milk producers will be in the form of subsidies per 1 liter of marketed (sold) high quality milk. According to the Ministry of Agriculture these measures are not in the “amber” box, and are not restricted by WTO rules. Before, in the budget 2012, all support of agricultural producers was in one consolidated budget category “State Program for Development of Agriculture and Market Regulation 2008-2012” and did not show budgets for separate benefiting industries, such as crop and livestock industries. These changes (from general to specific) in the budget categories made comparisons with previous years difficult. 1 Russia’s Federal Law “On the Federal Budget for 2013 and the Planned Periods 2014 and 2015” (FZ 216 of December 3, 2012): http://www.rg.ru/2012/12/07/budget-zakon-dok.html 2 For calculation in dollars, the exchange rate is 31 rubles per $1 Allocations to the Ministry of Agriculture for support of crop producers in 2013 will total 46.0 billion rubles ($1.48 billion), and will cover the following measures: Decoupled support of crop producers (per 1 hectare of sown area) – 15.2 billion rubles ($490.3 million), or approximately 200 rubles ($6.5) per hectare; Partial compensation of interest rate (capital loans) in crop production, processing and marketing – 8.8 billion rubles ($283 million); Partial compensation of interest rate (operating loans) in crop production, processing and marketing – 7.2 billion rubles ($232 million); Partial compensation of insurance premium in crop production – 5 billion rubles ($161 million); Sales (so called “commodity”) and procurement interventions from/to the State Intervention Fund – 4.7 billion rubles ($150 million)3 Support of economically important provincial programs in crop production - 3 billion rubles ($96.8 million); Other programs – 2.1 billion rubles ($66 million) Allocations to the Ministry of Agriculture for support of livestock and poultry producers in 2013 will total 63.9 billion rubles ($2.06 billion), and will cover the following measures: Partial compensation of interest rate (capital loans) in animal production, processing and marketing – 28.7 billion ($927 million); Subsidies to milk producers per 1 liter of marketed milk – 9.6 billion ($308 million). Industry analysts calculated that this support will equal 1.5 rubles (5 cents) per liter; Support of economically important provincial programs in livestock production – 8 billion rubles ($258 million); Partial compensation of interest rate (operating loans) in animal production, processing and marketing 4.1 billion rubles ($132 million); Support of pedigree livestock – 3.5 billion rubles ($113 million); Partial compensation of interest rate (capital loans for investments in beef cattle feedlots) – 4.4 billion ($143 million); Support of economically important regional programs in beef cattle industry – 2 billion ($64 million); Counter-epizootic measures -1.4 billion ($44 million) Other programs – 2.2 billion ($72 million) Allocations to the Ministry of Agriculture for other agriculture support programs will total 11.1 billion ($360 million), and include the following measures: Support of beginning farmers, family farms and small forms of business– 8.6 billion rubles ($278 million); Subsidies to agricultural machine producers – 2.3 billion ($74 million); Monitoring of information on food security and grain quality – 243 million rubles ($8 million) In the beginning of February 2013, the government held a meeting on the grain situation in Russia and agreed to add 40-42 billion rubles of federal budget money to the state support of agriculture in 2013, 3 According to the Status of the State Interventions, all agricultural commodities can be purchased/sold, but from the beginning of the State Interventions in 2004 to date, only grain has been sold and purchased. which would increase the total from 120.97 billion rubles (3.9 billion) to 161-163 billion rubles ($5.2- $5.3 billion) (for more information see FAS/Moscow GAIN report Government Discusses Grain Situation _ 2-12-2013). The tentative increased support will still be only 60 percent of what is allowed in 2013 by Russia’s WTO commitments within the “amber” box. However, until mid March 2013, the proposed additional funds have not been approved yet. Meanwhile, some regions in the south of European Russia have already started fertilizing (top-dressing) of winter crops and soil preparation for spring sowing. Chart 1. The detailed budgets of the Ministry of Agriculture, VPSS and the Federal Fishery Agency for 2012 and 2013 are in Attachment 1. Attachment 1. 1,000 rubles USD 1,000 Budget Final Final code 2012* 2013 2012* 2013 MINISTRY OF AGRICULTURE 082 172,202,661 172,972,719 5,554,925 5,579,765 Including: - National level issues, including international cooperation 082 01 15,038 14,463 485 467 - - International relations and cooperation 082 01 08 19,100 14,463 616 467 - National economy 082 04 142,672,643 143,582,665 4,602,343 4,631,699 - - Agriculture and fisheries 082 04 05 140,757,293 142,387,863 4,540,558 4,593,157 082 04 05 - - - FEDERAL TARGET PROGRAMS 1000000 12,719,205 10,585,026 410,297 341,452 082 04 05 - - - - - Development of irrigation in 2012-2020 1001200 300,000 1,000,000 9,677 32,258 082 04 05 - - - - - Development of Kaliningrad oblast until 2015 1004500 37,026 37,026 1,194 1,194 082 04 05 - - - - - South of Russia (2008-2013) 1004800 60,000 1,935 0 082 04 05 - - - - - Soil preservation and reclamation in 2006-2012 and in 2013 1006000 10,846,500 7,116,610 349,887 229,568 082 04 05 - - - - - Development of Chechen Republic 2008-2012 1007200 398,479 12,854 0 - - - - - National System of chemical and biological security of Russia 2009- 082 04 05 2014 1007500 767,400 756,570 24,755 24,405 082 04 05 - - - - - Development of Ingushetia Republic 2010-16 1008500 196,100 566,900 6,326 18,287 082 04 05 - - - - - Overcoming the effects of radiation incidents until 2015 1008600 113,700 107,920 3,668 3,481 082 04 05 - - - - - Other budget investments 1020000 1,297,360 75,092 41,850 2,422 082 04 05 - - - STATE SUPPORT OF AGRICULTURE 2600000 189,250 120,974,334 6,105 3,902,398 082 04 05 - - - - - Partial compensation fo purchase of elite seeds 2600100 513,200 16,555 082 04 05 - - - - - Partial compensation of maintenance of vineyards 2600200 300,000 9,677 082 04 05 - - - - - Partial compensation for maintenance of orchards 2600300 105,000 3,387 082 04 05 - - - - - Measures in agricultural production 2600400 101,888 3,287 082 04 05 - - - - - Partial compensation of planting orchards 2600500 500,000 16,129 - - - - - Support of economically important provincial programs in crop 082 04 05 production 2600600 3,000,000 96,774 082 04 05 - - - - - Subsidies for seeds purchase and delivery to the Northern territories 2600700 200,000 6,452 - - - - - Crop rpoduction in low fertile soils of the Far North and similar 082 04 05 territories 2600800 342,510 11,049 - - - - - Partial compensation of interest rate (short term loans) in crop 082 04 05 production, processing and marketing 2600900 7,199,542 232,243 - - - - - Partial compensation of interest rate (investment loans) in crop 082 04 05 production, processing and marketing) 2601000 8,785,026 283,388 082 04 05 - - - - - Partial compensation of insurance premium in crop production 2601100 5,000,000 161,290 082 04 05 - - - - - Decoupled support of crop producers (per 1 hectare of sown area) 2601200 15,200,000 490,323 082 04 05 - - - - - Support of pedigree livestock 2601300 3,500,000 112,903 082 04 05 - - - - - Subsidies to milk producers per 1 liter of marketed milk 2601400 9,558,754 308,347 082 04 05 - - - - - Partial compensation for growing sheep and goats breeding stock 2601600 653,000 21,065 082 04 05 - - - - - Partial compensation for northern deer and meat horses 2601700 180,000 5,806 - - - - - Support of economically important provincial programs in livestock 082 04 05 production 2601800 8,000,000 258,065 - - - - - Partial compensation of interest rate (short term loans) in animal 082 04 05 production, processing and marketing 2602000 4,094,570 132,083 - - - - - Partial compensation of interest rate (investment loans) in animal 082 04 05 production, processing and marketing 2602100 28,740,619 927,117 082 04 05 - - - - - Partial compensation of insurance premium in animal production 2602200 1,000,000 32,258 082 04 05 - - - - - Support of pedigree meat cattle 2602500 400,000 12,903 - - - - - Support of economically important regional programs in beef cattle 082 04 05 industry 2602600 2,000,000 64,516 - - - - - Partial compensation of interest rate (investments loans in meat 082 04 05 cattle feedlots) 2602700 4,423,963 142,708 082 04 05 - - - - - Support of beginning farmers 2602800 2,000,000 64,516 082 04 05 - - - - - Development of family farms 2602900 1,500,000 48,387 - - - - - Interest rate subsidies on loans (short, middle, long-term) for small 082 04 05 farm business 2603000 5,000,000 161,290 - - - - - Partial compensation of small farmers/peasants expenses on paper- 082 04 05 work for privatization of land plots/shares 2603100 120,000 3,871 082 04 05 - - - - - Subsidies for agricultural machines producers 2603400 2,300,000 74,194 - - - - - Sales (commodity) and Procurement Interventions on agricultural 082 04 05 products 2603500 4,659,730 150,314 082 04 05 - - - - - Monitoring of information on grain quality 2603600 63,270 2,041 082 04 05 - - - - - Counter-epizootic measures 2603700 1,353,000 43,645 - - - - - State Information in the sphere of food security and management of 082 04 05 agro-industrial complex 2603800 180,263 5,815 - - - INSTITUTIONS THAT PROVIDE SERVICES IN THE SPHERE OF 082 04 05 AGRICULTURE AND ANIMAL PROTECTION 2610000 10,748,492 346,726 082 04 05 - - - SOCIAL ASSISTANCE 5050000 4,919 159 - - - SERVICES IN THE SPHERE OF AGRICULTURE, PROTECTION 082 04 05 AND USE OF FAUNA 2610000 10,310,978 332,612 - - - STATE PROGRAM OF DEVELOPMENT OF AGRICULTURE AND 082 04 05 MARKET REGULATION 2008-2012 2670000 116,240,500 3,749,694 082 04 05 - - - - - General measures 2670400 11,270,070 363,551 082 04 05 - - - - - Agricultural production measures 2670402 3,390,070 109,357 082 04 05 - - - - - Procurement and selling interventions and collateral operations 2670403 7,880,000 254,194 082 04 05 - - - - - State support of agricultural industries 2670500 104,625,430 3,375,014 - - - - - Interest rates compensations for individual households, farmers and 082 04 05 consumer cooperatives, for long term loans (up to 8 years) 2670501 6,300,000 203,226 082 04 05 - - - - - Support of sheep breeding 2670502 670,000 21,613 082 04 05 - - - - - Support of elite seed breeding 2670503 1,767,150 57,005 082 04 05 - - - - - Support of delivery of seeds of fodder crops to the North 2670504 900,000 29,032 082 04 05 - - - - - Support of flax an hemp production 2670505 300,000 9,677 082 04 05 - - - - - Support of orchards and gardens 2670506 1,336,900 43,126 082 04 05 - - - - - Crop insurance compensations 2670507 6,000,000 193,548 082 04 04 - - - - - Support of northern deer and pasture horse breeding 2670508 300,000 9,677 082 04 05 - - - - - Support of pedigree animal breeding 2670509 3,500,000 112,903 - - - - - Interest rate compensations for agricultural producers, except individual households and consumer cooperatives, for short-term loans (up 082 04 05 to 1 year) 2670510 17,325,000 558,871 082 04 05 - - - - - Compensation of acquisition of chemicals 2670511 252,780 8,154 082 04 05 - - - - - Support of agricultural extension service 2670512 500,000 16,129 - - - - - Interest rate compensations for agricultural producers for 2 to 10 082 04 05 years' loans (Ministry of Agriculture’s portion) 2670513 52,475,000 1,692,742 082 04 05 - - - - - Support of economically important regional programs 2670514 12,998,600 419,310 - - - APPLIED RESEARCH AND DEVELOPMENT 082 04 11 537,932 396,716 17,353 12,797 - - - OTHER ISSUES of NATIONAL ECONOMY 082 04 12 777,417 798,086 25,078 25,745 - Housing and rural development 082 05 3,443,431 2,880,000 111,078 92,903 - - - - - Federal Target Programs "Social development of rural area until 082 05 02 2013" 1001100 2,480,000 2,480,000 80,000 80,000 - Education 082 07 20,097,269 21,465,875 648,299 692,448 - - Pre-school education 082 07 01 4,981 3,138 161 101 - - School education 082 07 02 499,000 791,300 16,097 25,526 - - Professional training and upgrading 082 07 05 284,930 297,385 9,191 9,593 - - Higher professional education and training 082 07 06 19,027,084 20,362,219 613,777 656,846 - - Applied research in the sphere of education 082 07 08 0 - - Other issues in the sphere of education 082 07 09 11,274 11,835 364 382 - Health issues 082 09 425,163 427,962 13,715 13,805 - Social Policy 082 10 5,499,118 4,581,753 177,391 147,798 - Sports 082 11 20,000 20,000 645 645 FEDERAL SERVICE FOR VETERINARY AND PHYTOSANITARY SURVEILLANCE 081 9,522,094 10,177,416 307,164 328,304 including: - National economy 081 04 9,502,094 10,161,809 306,519 327,800 - - Agriculture and fishery 081 04 05 2,435,599 3,274,011 78,568 105,613 - - Applied research and development 081 04 11 672,228 951,600 21,685 30,697 - - Other national economy issues 081 04 12 6,394,267 5,936,199 206,267 191,490 - Social policy 081 10 20,000 15,610 645 504 FEDERAL FISHERY AGENCY 076 14,900,549 13,903,898 480,663 448,513 including: - National level issues 076 01 33,898 38,264 1,093 1,234 - National economy 076 04 12,149,708 11,056,861 391,926 356,673 - Education 076 07 2,677,943 2,790,040 86,385 90,001 - Social policy 076 10 39,000 18,732 1,258 604 GRAND TOTAL for Agriculture and Fishery FEDERAL FORESTRY AGENCY 053 29,681,925 957,481 RUSSIAN ACADEMY OF AGRICULTURAL SCIENCES 190 7,654,770 246,928 *Note: The final budget 2012 includes 2,296 million rubles ($74 million) added in 2012 for categories “National Economy”, Housing and Rural Development”, “Education, and Social Policy” Source: the Russian FL No. 216 of December 3, 2012 “On the Federal Budget 2013 and the Planned Period 2014 and 2015”, the Russian FL No. 247 of December 3, 2012 “Amendments to the Federal Law on the Federal Budget 2012”, and the Russian FL No. 371 of November 30, 2011 “On the Federal Budget 2012 and the Planned Period 2013 and 2014”
Posted: 29 March 2013

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