2006 (6 months) 0% 20% 40% 60% 80% 100% Federal Regional Local Source: www.minfin.ruUHT UTH T Picture 1.T Structure of consolidated budget expenditures on agriculture, % 2) Beginning from 2005 one of the tools of subsidies’ regionalization is the practice of co-financing regional programs of support to agrifood sector. As mentioned above, in 2007 2/3 of subsidies are supposed to co-finance regional programs. The programs eligible for co-financing are enumerated in the budget law. As a result in order to maximize inter-budget transfer regional administrations select farm support programs to be implemented basing not on the requirements of local agrifood sectors but on the amount of potential co-financing they can get from the federal budget.
3) Financing of the National project is not singled out in the budget; funds for carrying out its tasks are dissolved in total expenditures. When introduced, the National project was announced to be a result-oriented budgeting tool that is stronger than an annual budget. In practice the National project format was neglected in the process of drawing up the budget. Moreover, there are discrepancies between the draft budget and the National project. For instance, in 2007 the Russian Agricultural Bank (“Rosselkhozbank”) is to get 3.67 billion rubles for subsidizing interest on credits (95% of interest rate) to small producers, 4.5 billion rubles for supporting cooperatives of small farm producers and 1.billion rubles for carrying out pilot land mortgage projects in the framework of the National projectTF F.
P TP In the draft 2007 budget these funds are not envisaged. There are also some other discrepancies between the National project and the draft budget.
4) Similar to previous years, the federal budget allocates large funds to enlarging authorized capital of two state corporations in charge of commercial operations in agriculture – “Rosselkhozbank” and “Rosagroleasing”. It has become customary that these two organizations serve as federal government’s agents for collecting debts to the federal budget. The recovered debts remain at their disposal and, besides, they get agent’s fee that does not depend on the recovery rate. Moreover, there is no public report on collection of debts to state by these organizations. Such an intensive financing of state organizations engaged in commercial operations contradicts both the letter and the spirit of the Russian antitrust legislation. In them the state creates not only monopolies but even oligopolies on the credit and leasing markets in agriculture.
The draft 2007 budget names one more debt-collecting agent – “Rosagrosnab”. This is a private organization for providing material and technical services to agriculture. Till 2001 this company was the agent for implementing the federal program of support to farm machinery lease. Due to no particular reason in 2007 it was again declared the agent for recovering debts on leasing operations. It’s not clear why “Rosagroleasing” was released from these functions. It’s also not clear how a private company can be appointed the government agent without an open contest. Moreover, the draft law contains an implicit provision on that score:
«The open joint-stock company “Russian Agricultural Bank” becomes the agent of RF Government for collecting debts to the federal budget connected with supplying agrifood sector with machinery and equipment in case no respective agency agreement is signed with the open joint-stock company “Rosagrosnab” till May 1, 2007 on the basis of Part 2 of this Article or this agreement is cancelled» (Art. 71, Part 2).
Why does the government doubt whether the agreement with “Rosagrosnab” will be concluded Why in case it’s not concluded “Rosselkhozbank” and not a specialized state company “Rosagroleasing” will become the agent for collecting leasing payments One more enigma of the draft budget is Article 73:
«The commission for fulfilling the functions of RF Government agents in 2007 is set in the amount of up to 80 000.0 thousand rubles to be paid to open joint-stock companies “Russian development bank”, “Russian agricultural bank”, “Rosagrosnab” and close joint-stock company “Roseximbank”».
Will 80 million rubles be paid to all the mentioned agents or to each of them Why does not the payment depend on the amount of fulfilled agent’s functions 5) The financing of grain interventions in 2007 increases dramatically. The outcomes of such interventions in previous years failed to demonstrate their doubtless efficiency. Moreover, the federal government has not yet decided what to do with interventional stocks accumulated earlier. If one takes into account just these considerations, a noticeable expansion of interventional operations looks unjustified.
Interventions were carried out in 2004 and 2005 when relatively good crops of grains resulted in lower prices on the domestic market and the dramatic lowering of grain producers’ profitability. The 2006 crop does not necessitate any interventions. Government forecasts of gross production of grain crops in 2007 arouse no fears for the price drop either. Moreover, the large-scale National project intended to accelerate development of livestock production should result in greater demand for feed grains and consequently the expected growth of gross grain output cannot induce lowering of prices.
Here again one can see the above noted inconsistency of the annual budget with the National project.
PT TP http://www.mcx.ru/dep_doc.htmlhe_id=797&doc_id=2003 2004 2005 2006 *2006 – estimate, 2007 – two variants of forecast.
Source: Rosstat, 2006 – estimate of WJ company, 2007 – forecast of the Ministry for Economic Development and Trade.
T T Picture 2. Gross production of grain crops in Russia, million tons* 6) One of the most successful government programs in the domestic agrifood sector - the subsidizing of interest rate on short- and medium-term credits – has been seriously affected by the adopted National project. The latter envisages subsidizing of credits issued for implementing long-term projects in livestock production and to small farm producers and their cooperatives. And though the federal expenditures on subsidizing interest rate on credits to agriculture generally grow, the subsidizing of credits to commodity crop production notably falls. This may have a negative effect on the subsector.
Expenditures of federal budget on agriculture and land resources, rubles 2006 (plan) 2007 (draft) 2007/Subsidies to agriculture 12369466 17389433 141% Subsidies in the form of inter-budget transfers 27697476 33593486 121% Land resources 4130210 7359259 178% Allocations to authorized capital of the leasing company 8000000 8000000 100% Forming of authorized capital of the Russian Agricultural Bank 9821480 0 0% Science 443863.6 492803.3 111% Russian Agricultural Academy 2802123 3674852 131% Education 7192504 9903328 138% Investments and construction 70000 0 0% Expenditures on state administration 6019896 8044507 134% International activities 107784.8 11056.8 10% Health care 21158.4 22974.6 109% Social policies, housing construction 60000 74960 125% TOTAL 78735960 88566659 112% Subsidies to agriculture 12369466 17389433 141% Financing of institutions subordinate to the Federal service of veterinary and phyto-sanitarian control 698485.1 2128551 305% Financing of institutions subordinate to the Ministry of Agriculture 5840540 6733108 115% Federal special program “Rural social development” 29010 39050 135% Federal special program “Improvement of soil fertility in 2006-2010” 3560000 3806500 107% incl. compensation of expenditures on purchase of agricultural chemicals 0 Other federal special programs 0 Investments 118876 243676 205% Subsidizing of interest rate on credits 410000 200000 49% 2006 (plan) 2007 (draft) 2007/Other expenditures on farm production support 1343216 2697455 201% Grain interventions 140000 1296000 926% Building of state seed reserves 80000 80000 100% Information 149339 163032,9 109% Subsidies in the form of inter-budget transfers 27697476 33593486 121% Subsidizing of interest on credits for development of livestock production 3450000 8327000 241% Subsidizing of interest on credits for development of small-scale farming 2900000 4689900 162% Subsidizing of interest on credits 6870000 6080000 89% Subsidies for supporting livestock production 745000 300000 40% Subsidies for supporting elite seed breeding 260000 260000 100% Subsidies for supporting supply of feed crop seeds to northern regions of the country 60000 60000 100% Subsidies for supporting production of flax and hemp 80000 80000 100% Subsidies for supporting planting and maintenance of perennial plantations 370000 370000 100% Insurance 2900000 3400000 117% Subsidies for diesel fuel 5000000 0 0% Reindeer production and drove breeding of horses 0 Pedigree livestock breeding 0 Medium-term credits on development of livestock production 0 Federal special program “Rural social development till 2010” 4423190 5409600 122% incl. subsidies for housing young families and young specialists in rural areas 0 Other federal special programs 541630 477730 88% Investments 67000 57600 86% Other 30655.5 30655.5 100% E.Serova, O.Shick Autonomous Institutions in the Educational Sector: Hopes and Risks of the Novelty Success with implementation of the guidelines of the federal statute “On autonomous institutions” recently passed by the State Duma to a significant extent will depend on a thorough design of bylaws, coordination of its provisions with those of other associated acts, and a rigorous ensuring of the voluntaryism in initiating the transition towards the status of autonomous institution..
After a long and fairly heated debate within the professional community and public at large, on October 11, 2006, the State Duma passed in the third reading the federal statute “On autonomous institutions” (AI). The complexity and ambiguity of attitudes to the act can be proved by the fact that the work on the bill had generated serious debates in the educational community. They found in the bill the danger of the rise in commercialization of the educational sphere and privatization of its property complex. A sophisticated and multi-stage process of conciliation between different professional and public organizations’ stances and interests allowed introduction to the bill of various amendments and elimination of a series of the most debatable facets. Regardless, representatives of all factions in the Duma, except for United Russia, obstructed the adoption of the statute, while the Federation Council at its plenary session on October 27, 2006, endorsed that.
In compliance with the statute, “a non-for-the-profit organization established by the Russian Federation, Subject of the Russian Federation or municipal entity to carry out works an deliver services for the purpose of realization of powers of agencies of state power and those of local self-governance bodies in the area of research, education, healthcare, culture, social protection, employment of the population, physical culture and sports is recognized as an autonomous institution”. The statute not only provides for establishment of AI, but it also implies transformation of the existing institutions of the social sphere into the new form, however, a special clause therein prohibits any change of the type of the existing government and municipal healthcare institutions.
AI enjoy a great deal of financial and economic autonomy, with its revenues under its full control, while the owner of its property has no right to receive any of them, nor he can use the property and assets fixed with the AI. The institutions shall be financed both from the budget and extrabudgetary funds in the form of subventions and subsidies, rather than basing on estimates. Educational Ais will be fulfilling the sate order in the part of educational services. To preclude from a deterioration of their financial situation in the course of their transition to the new form, the law reads that “the volume of financial provision of fulfillment of the task the founder has assigned to the state or municipal institutions (budgetary or autonomous one) may not depend on the type of such an institution”. Thus, for instance, non-for-the-profit organizations that carry out an educational process (the group into which AIs fall) enjoy benefits in the part of VAT.
Given all the above, Ais face a greater responsibility: the founder, be that the sate or a municipality does not bear subsidiary responsibility for AIs’ obligations, while the latter hold responsible for their obligations with the property fixed with them, except for real estate and particularly valuable movables. Without the owner’s consent, the AI has no right to control its real estate and particularly valuable movables (that is, it may not repay a debt by selling a building the government has assigned to it, or by means of sale of a university library).
The decision on establishment of an AI shall be made (depending on the level of the respective mandate) by the federal government, a body of executive power of the region, or a local selfgovernance body. The statute clearly highlights the voluntaryism of the transition of institutions from the budgetary into autonomous form. An amendment passed during the second reading implies that the decision on the change of the type of a public (municipal) institution is made only upon the institution’s consent. In addition, to pass such a decision and transform it into the form of AI, one also needs to have a collegial body’s (the employees general meeting, conference) consent. Thanks to the amendments, the respective procedures have grown more strict and transparent compared with what actually happens now. It should be noted, however, that the federal law lacks an adequate detailed description of the procedures. That is why in practice, pursuing its selfish ends, the owner can treat the respective institution fairly subjectively. The statute stipulates that the transformation of an institution from one type into another may be made only after the RF Government has set procedures of attribution of this or that property to particularly valuable objects. This fundamental aspect that requires a special thorough consideration, as it is criteria, methods and mechanisms of finding out the value of the property and its attribution to this or that kind of property that will in many situations predetermine possibilities for manipulations with and the level of protection of the educational institutions’ property complex.