The Russian government plans to provide 150 billion roubles to support the country’s agricultural sector in 2011, Prime Minister Vladimir Putin said at a meeting in early March in Tambov, Russia.

In addition, state-owned Russian Agricultural Bank, or Rosselkhozbank, plans to provide over 100 billion roubles of loans for seasonal agricultural works, while state-controlled Sberbank is to provide over 50 billion roubles in other agricultural loans, Putin said.

Moreover, agricultural producers are expected to save about 10 billion roubles this year thanks to discounts on fuel introduced by the government, Putin said. In addition, the federal government allocated an extra 2 billion roubles for the purchase of seeds and fertilizers.

In total, the government allotted over 440 billion roubles to support the agricultural industry over the past five years, which contributed to a total of about 700 billion roubles together with funds provided by regional governments, Putin said. He said that all agricultural producers, not only large agricultural complexes, should have the opportunity to use federal government support funds.

Turning to bank loans for agricultural producers, Putin said that Rosselkhozbank was to simplify significantly the procedure of obtaining loans of up to 15 million roubles by small agricultural producers. Moreover, the government plans to lift restrictions on Rosselkhozbank for providing loans for the purchase of foreign agricultural equipment, Putin said.

The federal government also plans to compensate 50 percent of agricultural producers’ expenditures in acquiring ownership of land plots, Putin said, calling for regional and municipal governments to compensate the remaining 50 percent.

Putin also said the government had launched a project to support agricultural startups. Under this project, a producer is to receive a special grant for the creation of a farm, including for the purchase of land, animals, equipment, and seeds. Even today, grants from the Healthcare and Social Development Ministry and the Economic Development Ministry are available. Putin said it was necessary to formulate rules for providing grants to agricultural producers and to transfer the right to provide them to the Agriculture Ministry. A startup farmer is also expected to be able to take out a long-term investment loan, with the interest rate on the loan subsidized by the federal government and a guarantee on the loan secured by the regional government, Putin said, adding that the federal government allotted 6 billion roubles for subsidizing interest rates on agricultural loans.

The government is now also preparing regulations that would allow agricultural producers to build houses on land assigned for agricultural projects, Putin said.

Turning to food prices, Putin ordered the Agriculture Ministry to speed up the submission of its proposals to the government over monitoring and forecasting the situation on the food market. All agricultural producers should have long-term guidelines on prices and demand in order to develop their business strategies and development programs based on those factors, Putin said.

Speaking about the grain intervention fund, Putin ordered leaders of regional governments to ensure transparent supplies of fodder grain from the intervention funds to agricultural producers. The government recently decided to distribute grain from the fund among regions most affected by drought at almost half the market price. The Prime Minister also ordered to tackle insurers that do not compensate agricultural producers for damage caused by the drought.

Putin also tasked Deputy Prime Ministers Viktor Zubkov and Igor Sechin to analyze the situation on the fertilizer market and  to develop measures to curb the growth of fertilizer prices.

Speaking about gas prices for agricultural producers, Putin pledged to discuss with gas monopoly Gazprom the possibility of liberalizing the gas pricing formula for agricultural producers. Putin made the statement following a complaint from a farmer, who said Gazprom was collecting fines for buying excessive or insufficient volumes of gas, either more or less than  what was provided for by contract.

Separately, Putin said the government planned to provide 4 billion roubles to the agricultural leasing company Rosagroleasing, so that the company is able to sell agricultural equipment that has gotten stuck at its storehouses at 50 percent of its value.