In December 2012, the government of the Russian Federation announced a change in private-sector financial support.



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Federal Budget of the Russian Federation,
Бюджетная роспись, Бюджетные ассигнования по расходам федерального бюджета на 2013 год и на плановый период 2014 и 2015 годов,

Постановление от 27 декабря 2012 г. №1431
Правила предоставления и распределения субсидий на оказание поддержки сельскохозяйственным товаропроизводителям в области растениеводства

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Production subsidy

On December 27, 2012, the Government of the Russian Federation approved Resolution No. 1431 introducing rules for the allocation of subsidies to the Russian plant-growing (crop) producers. The crop subsidies budget was approved on December 5, 2012 by Federal Law 'On the federal budget for 2013 and the planning period 2014-2015'. The subsidies will remain in force at least until 2015. The annual budget for each year is fixed at 15.2 billion Russian Roubles (USD 490 million). 
The provision of these subsidies is part of the sub-programme "Development of the crop sub-sector, processing and marketing of crops" of the state programme for the development of agriculture in the period 2013-2020 (the Agricultural Programme 2013-2020). This state aid belongs to the so-called 'decoupled' support for crop 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 is necessary, because the WTO rules forbid direct subsidies of supply of agriculture-related goods (chemicals, fertilisers, seeds, fuel) to farmers, which was a common practice in the Russian agricultural policy in the period 2008-2012. The new approach of subsidies' allocation is based on general indicators such as:

  • minimum subsidy per one hectare of arable land;
  • coefficient of the level of intensity of use of the sown area;
  • share of sown area as a percentage of the total;
  • indicators of soil fertility.

The decoupled subsidies for support of crop producers will be allocated to farmers (except for private households) through the budgets of the Russian provinces. The purpose of the subsidies is to reimburse expenses of the Russian farmers related to plant protection, some soil fertility, environment safety, and agro-technological activities.
Resolution No. 1431 enters into force on January 1, 2013.
The subsidy discriminates against the commercial interests of foreign agricultural producers and traders, competing with Russian farmers on the Russian and on the international markets.
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.