MOSCOW, Dec 31 (PRIME) – The Agriculture Ministry has prepared a draft government regulation to sell grain from the intervention fund at lower prices, the document said on Tuesday.
The amendments will allow the government to sell grain “at a price no lower than its purchase price less the costs of the current financial year connected with organization of storage and insurance of the intervention fund as well as with credit servicing received by the agent to form the intervention fund reserve and further compensation to the agent of the difference between the sales price of grain and its price of purchase for the intervention fund,” the document said.
The mechanism of grain purchase and sales has been in place in Russia since 2001 to stabilize grain prices and support farmers. The intervention fund holds 1.855 million tonnes of grain worth 18.727 billion rubles as of December 20.
The Agriculture Ministry said in an explanatory note to the draft that subsidies for rail transportation are preferable at current market prices from the point of view of budget spending and effect on the market.
“The Agriculture Ministry plans to sell grain from the federal intervention fund fully,” it said.
Intervention fund grain was sold in 2018-2019.
“At that, taking into consideration the high price of laying the grain into silos as well as the great distances from the key consumers and export infrastructure, exchange sales amounted only 145,600 tonnes in July-November,” the ministry said.
“Grain sales from the intervention fund at current market prices are only possible, if the grain price is reduced.”
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