Vladimir Putin, the Russian prime minister and president-elect, pledged this week to protect domestic companies and encourage import substitution ahead of the country’s expected accession to the World Trade Organization (WTO) later this year, according to a Bloomberg BNA report.

Putin said in an address to Russia’s State Duma, the lower house of parliament, that the country’s WTO membership would be a powerful stimulus to the country’s economic development, but he added, “we have to use WTO instruments to safeguard our interests.” Russia later this year will approve a national program to support local agricultural producers during the 2013-2020 time period. The program will include incentives for agricultural producers to utilize more arable land. As a result, crop acreage will increase by at least 5 million hectares (12.4 million acres) in the next seven years, Putin said. While the country’s agricultural sector has demonstrated positive results in substituting for food imports, it does not mean the sector does not need any further protection, according to Putin.

Russia’s poultry production has tripled in recent years, while poultry imports decreased from 1.6 million metric tons three years ago to some 200,000 tons last year, Putin said.  But he warned that Russia cannot afford to sharply cut imports of agricultural products, lest food prices will soar.  Russian agricultural subsidies now total $4.5 billion annually, but the government has the option to increase these subsidies up to $9 billion a year, Putin said.

 

Comments are closed.