ANNOUNCEMENT 06 Apr 2019
On 6 April 2019, the Russian Government announced a new version of the subsidy for transporting grain via railway.
NUMBER OF INTERVENTIONS
Russian Government. 2019. Об утверждении Правил предоставления субсидий из федерального бюджета открытому акционерному обществу "Российские железные дороги" на возмещение потерь в доходах, возникающих в результате установления льготных тарифов на перевозку зерна (On approval of the Rules for granting subsidies from the federal budget to the Russian Railways open joint stock company for compensation of losses in income arising from the establishment of preferential tariffs for the transportation of grain) N 406. http://government.ru/docs/36315.
Minister of Agriculture. 2019. Order N322 dated 10 June 2019, on the volumes to be purchased: http://mcx.ru/upload/iblock/640/640fea6442970a989bd8a405aafb247b.pdf
On 6 April 2019, the Russian Government issued decree No. 406 reimbursing the Russian Railways for financial losses resulting from transporting grain on subsidized rates. The measure came into force on 9 April 2019, but the budgeted amount has not been disclosed. The 2017-2018 budget of the subsidy was USD 51 million.
The subsidies apply to railway transportation of wheat, barley, and corn from 8 regions of the Volga, Ural, and Siberia Federal Districts. The measure covers transportation services rendered between 1 February and 31 August 2019. To be eligible for subsidized transportation, the grain should be purchased at or above the minimal sale price set by the Agriculture Ministry. Volumes to be purchased at stations of each of the eight regions were set in the order of the agriculture minister (N322 dated 10 June 2019), with the total comprising 68783 tonnes.
The previous edition of the policy, covering 2017 and 2018, included grain originating from Central and North-Western Federal Districts, in addition to the 8 regions listed above. That policy ended in July 2018. The subsidy raised questions at the WTO, with several members raising concerns about its export-oriented nature. Russia replied then that the subsidy is not contingent on export, provides equal terms to all destinations and is of temporary and seasonal nature.