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They are basically limited to subsidizing of large corporate farms and mega-large agricultural holdings regardless of their technical and financial efficiency1. Development of land and rural infrastructure is not paid due attention to. The set of applied measures is the same for all regions of the country. Meantime, the All-Russian Agricultural Census of 2006 revealed that their farm structure is absolutely different: large-scale corporate agriculture, corporate agriculture, family commodity and non-commodity production. Besides, even within a prosperous region-constituent of the Federation some areas can be classified as zones of agricultural devastation2. Its obvious that for territories with a certain farm structure one should apply spe H. Hockmann (IAMO), E. Gataulina. The significance of market transaction costs and technical efficiency for economic performance (cost rentability) in Russian agriculture. http://conf.hse.ru/2011/prog_sections (R-05). 2011.

Uzun V.Ya., Saraykin V.A., Gataulina E.A. Classification of farm producers based on data of the All-Russian Agricultural Census of 2006. Moscow, the All-Russian Institute of Agrarian Problems and Informatics named after A.A.Nikonov (VIAPI), ERD, 2010. www.viapi.ru Section The Real Sector of the Economy cific policy measures with due regard to the actual situation. However, this aspect is not taken into account when developing agricultural policies. The data of Agricultural Census does not even serve as one of the basic sources of information that should be considered in this process. The evidence of its extremely limited use is the fact that there are just a few scientific publications based on the analysis of census results and the latter are very rarely referred to in reports of officials determining state policies in the sector1.

At the end of 2011 a draft of the new 8-year State Program for 2013-2020 was submitted to the government.

The new State Program sets the following tasks and objectives:

- sustainable development of rural areas, creation of favorable and attractive social environment for rural residents including housing conditions, health care, education, road, transport and other kinds of infrastructure;

- ensuring commodity farm producers the rate of return sufficient for expanded reproduction of agricultural products and maintenance of their financial sustainability and competitiveness on domestic and foreign markets;

- modernization and switching to the innovational pattern of agrifood sector development, accelerated adoption of advanced research and technology enabling to improve productivity of labour and reduce per-unit input requirements;

- recultivation and more efficient use of land and other natural resources;

- development of smallholder farming and cooperation as an important factor of income growth for farm producers and facilitation of their access to agricultural and food markets;

- informational support to agrifood sector operators and providing them with state services in electronic form;

- increase of export resources of grain and other agricultural products with the view to expand Russias share on the world food market.

However, the draft Program fails to cope with some risks that became evident in previous years. In particular, the need to pay subsidies under the already issued long-term credits will notably reduce the amount of subsidies for new credits. The Program does not set limits for subsidizing interest rate to specific participants of food chains. This can lead to the rechanneling of subsidies in favour of processing and logistical companies. Their great lobbying capacities can result in the worsening of farm producers access to credits, especially the shortterm ones. Experts2 recommend to establish limits on compensating expenditures on credits to processors and logisticians, for instance not more than 30% (at present their actual share is already about 45%).

Regrettably, at the last stage of adoption the principal measures for developing agricultural cooperation were withdrawn from the sub-program Support of small-scale farming, i.e.:

- granting of subsidies to agricultural credit cooperatives for replenishment of the fund for mutual financial assistance;

One of the reasons is that the primary impersonal results of the census are actually unavailable for researchers and the opportunity to analyze aggregated data published by Rosstat is very limited.

See, for instance, V.Ya.Uzun, E.A.Gataulina et al. Agrarian protectionism: scientific fundamentals and implementation mechanisms in the market environment. Moscow, the All-Russian Institute of Agrarian Problems and Informatics named after A.A.Nikonov (VIAPI), 2010, p. 278.

RUSSIAN ECONOMY IN trends and outlooks - reimbursement of 50% of documented expenditures of agricultural consumer cooperatives non-credit cooperatives on establishment of their material basis (construction, purchase of machinery and technological equipment, etc.).

These support measure were proposed after the monitoring of implementation of the effective State Program (carried out by the RF Ministry of Agriculture1) revealed that the principal hindrances to development in the opinion of small farm producers were the undercapitalization of material and technical basis in input supply and marketing cooperation and the shortage of current capital in credit cooperation. The pre-revolution Russias experience proved the efficiency of such measures for supporting cooperation: the state granted respective loans and they were repaid prior to maturity. Notwithstanding all the above, these measures have not been included in the draft of the new State Program. Now the prospects for development of agricultural cooperation are rather vague and progress will be made only in the regions that have their own programs of support to cooperation.

Measures concerning development of market transfer of farmlands and its monitoring are not well thought over. For instance, its planned to monitor up to 90% of lands of agricultural designation. Meantime, over half of them are not farmlands and are covered with forest, shrubs, swamps, etc. Their area is constantly reducing as non-agricultural lands are transferred to other categories of lands. Besides, one discusses the possibility to eliminate the notion of lands of agricultural designation as a category of lands. It would be more rational to monitor farmlands suitable for agricultural production rather than lands of agricultural designation.

The distribution of funds in the draft State Program is not duly substantiated. For instance, it envisages providing subsidies to individual private farms for registration of ownership titles to 9m hectares of land. The question arises: why farm producers of only this organizational type are eligible for subsidies and how was this acreage determined given that individual private farms use more than 20m hectares without legal registration Besides, the total amount of compensation per farm or per hectare is not limited. This provides ample opportunities for abuse compensation of highly overstated prices for works of cadastral engineers facing no competition and the use of limited resources to the benefit of selected farmers having access to authorities that chose recipients of such compensations. There are a lot of such inconsistencies and discrepancies in the draft of the new State Program.

According to the State Programs draft version of November 11, 20112 allocations to soil improvement and rural development are to increase 7.5 fold while allocations to subsidizing of interest rate on credits less than 2 fold as compared with the previous State Program.

About 41% of the planned Rb 2,113bn of state support will be used for compensating input costs and supporting market prices. A great share of state support is tied to selected products and inputs and thus can be referred to as amber box measures. It should be noted that despite many years of negotiations with the WTO, traditional measures of state support are not adjusted to the requirements of this organization.

4.5.5. Recommendations 1. The analysis of farm performance shows that the sector has restructured after the protracted crisis that accompanied the structural reform in agriculture in the post-Soviet period.

Monitoring of State Program implementation (20082009). Moscow, Kolos, 2010.

http://www.mcx.ru/documents/document/show/16834.342.htm Section The Real Sector of the Economy Production of basic crop products as well as poultry and pig meat, eggs, and to a smaller extent products of sheep raising, is growing. Corporate farms concentrate not only on cultivation of grain and industrial crops but also on breeding of poultry and pigs; the share of cattle kept by them is growing as well. Its obvious that smallholder farms have been the buffer that throughout the twenty years provided for the maintaining of livestock population at an actually constant level while the drop of the latter in corporate farms was disastrous. The role of smallholder farms is especially important in raising of cattle, the population of which fell most dramatically. Its clear that until production of beef and milk becomes profitable for corporate farms, the maintaining of the countrys food security necessitates stronger support to smallholder farms in proportion to their contribution to the production of these products.

But in fact the government supports corporate farms instead of smallholder farms. The evidence of that is the level of state support to smallholder farms1, the limitations imposed on the acreage of household plots that were introduced in 20112 and other similar constraints.

2. The duty to monitor implementation of the State Program for supporting agriculture is assigned to the department that bears the principal responsibility for it the RF Ministry of Agriculture. At present the Ministry gathers the bigger share of information from farm producers including that on the implementation of the State Program. The access to this information is actually closed: only general information is available that does not allow to carry out detailed analysis and research in the field of agriculture and its state support. Due to that its hard to speak about the real results of the program, its efficiency for different groups of producers, areas and products and to work out proposals for improving the state support to agriculture.

Formally, there are no infringements in providing access to information: the government and departmental documents specify the general list of information and declare the principle of its availability. However, the summarized data does not allow to reveal latent problems of agricultural performance.

At the same time, the draft of the new State Program for supporting agriculture again envisages expenditures on different kinds of monitoring and data collection carried out by the Ministry of Agriculture. In case the existing practice of providing access to information is maintained and the Ministry continues to perform the function of monitoring the State Program implementation, these funds can be regarded as the funds for supporting the Ministry itself.

In order to put a stop to the formal approach to ensuring access to information that is currently practiced by the RF Ministry of Agriculture, one should publicly discuss and adopt the rules in compliance with which the department will provide informational services. They should concern the list, way and terms of submitting information and the procedure of getting access to it.

For instance, in Pskov oblast corporate farms receive 13.7 kopecks of state subsidies per 1 ruble of gross output, individual private farms less that 2 kopecks. At the same time household farms get for only 1 kopeck of subsidies per 100 rubles of output. Data of Zernov I.V., dissertation paper Family entities and their role in the agrarian sector (the case of Pskov oblast), www.vak.ru.

An amendment was made in the Federal Law No. 112-FZ of July 7, 2003 On household farm that limits the size of such a farm to 0.5 hectares. This amendment concerns plots of all legal titles, not just the ones privately owned. The law envisages that regions-constituents of the Russian Federation can enlarge this acreage but in fact no such decisions are taken. www.consultant.ru.

RUSSIAN ECONOMY IN trends and outlooks Besides, the function of preparing the national report on implementation of the State program for agricultural development and regulation of agricultural and food markets should not be performed by the Ministry of Agriculture as it is the chief agency responsible for this implementation. The national report should be drawn up by an external organization, not subordinate to the Ministry of Agriculture. This will help to give an objective estimate of all aspects of the State Program implementation and its efficiency, to make the necessary adjustments and improve the quality of state support in order to serve the public rather that departmental interests.

3. In the context of Russias accession to the WTO one should examine measures of state support to domestic agricultural producers applied in the country. These measures should be adjusted to the requirements to green box support that is not subject to any restrictions. Its worth examining the possibility to apply such measures as payment of subsidies per hectare or per livestock unit (in order to diminish the ties between output of a selected product and the level of state support), partial compensation of expenditures on new machinery and equipment (in order to stimulate modernization of farm sector) and other measures, the application of which gave good results in other countries members of the WTO.

4. In order to provide equal access to state support, it would be rational to set limits on its amount received by one farm producer, either physical or legal body.

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