IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 23 May 2014 | Removal date: open ended
Still in force

Interest payment subsidy

On 23 May 2014, the Russian Ministry of Agriculture approved with N 170 the sectorial programme "Development of the oils and fats industry of the Russian Federation for the period 2014-2016 ". The purpose of the programme is to supply the population with products of these industries and to increase their competitiveness on the domestic and international food markets.
Among the key state support activities to be implemented in the period 2014-2016 are:
 

  • Subsidising part of the cost of acquisition of elite seeds of soybean and rapeseed;
  • Subsidisation of interest payments on short-term loans received from Russian credit institutions and agribusiness organisations for the purchase of agricultural raw materials for primary and industrial processing of crops; 
  • Subsidisation of interest rates on investment loans received from Russian credit organisations by enterprises, belonging to vegetable oil industry, for construction, reconstruction and modernisation of production facilities;
  • Construction of buildings for deep processing of high-protein crops, for storage and handling of oil crops, as well as for construction and reconstruction of feed enterprises and workshops;
  • Subsidies for reimbursement of the costs of agricultural producers for payment of insurance premiums;
  • Subsidies for regional programs of the Russian Federation; 
  • Provision of decoupled financial support to agricultural producers.

 
"Decoupled subsidies' is a key concept introduced by the Agricultural Programme 2013-2020. Within this concept, subsidies will support farmers' income in general without being linked to any production performance indicators. The introduction of this new concept was necessary to avoid breaking Russia's WTO obligations which forbid direct subsidies of supply of agriculture-related goods (chemicals, fertilisers, seeds, fuel) to farmers.
 
The total funding of the program is at the amount of 34.52 billion roubles in current prices (approximately 1 billion USD).
 
The expected outcomes of the program and indicators of socio-economic efficiency are defined quantitatively as an increase of production volumes per product as follows:

  • Production of up to 15 million tons of oilseeds, from which sunflower - 10.2 million tonnes, rapeseed - 1.9 million tons, soybeans - 2.2 million tons; 
  • Production of up to 4.5 million tons vegetable fats, from which: sunflower - 3.5 million tons, rapeseed - 0.35 million tons, soybean - 0.37 million tons; 
  • Production of up to 480 tons of margarine;
  • Production of up to 400 tons of mixtures of rendered fats; 
  • Production of up to 140 tons of spreads;
  • Production of up to 860 tons of mayonnaise, sauces, mayonnaise, sauces based on vegetable oils, creams on vegetable oils.

 
This state measure is in line with the 2012 statement of the President of the Russian Federation, Mr Vladimir Putin, that the interests of the economic sectors, agriculture included, who meet the most intensive competition from abroad after the WTO accession, will be considered. Furthermore, in the Annual Presidential Address to the Federal Assembly held on 12 December 2013, Mr. Putin declared: "Companies, registered in foreign jurisdictions, must not benefit from state support, including from Vnesheconombank and state guarantees. Their access to contracts for state orders and for contracts with structures with state participation must be eliminated". In conclusion, although the end beneficiaries of the subsidies cannot be directly identified, it can be expected that they will be
Russian.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

014 Oilseeds & oleaginous fruits
1201 Soya beans, whether or not broken.
120190 Other
1205 Rape or colza seeds, whether or not broken.
120510 Low erucic acid rape or colza seeds
1206 Sunflower seeds, whether or not broken.
120600 Sunflower seeds, whether or not broken.

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