President Vladimir Putin proposed to channel the revenues generated by export duties on agricultural products towards the comprehensive development program for rural areas in order to provide it with additional funding. Natalia Shagaida, Head of the Gaidar Institute’s Agrarian Department, supports any initiative to invest more money in rural development. The expert’s opinion is cited by Agroinvestor.
However, the expert emphasized that the duties represent the lost income of producers of grain, oilseeds and sunflower oil. So, there can be many answers to the question as to what to spend them on. She then told the Agroinvestor interviewer that “We have provided a detailed substantiation for the use of duties, for example, to redistribute those on grain between grain producers in proportion to their relative shares in grain sales, regardless of whether the grain has been sold inside or outside the country, because the introduction of duties translates into lower prices for all of them.” In Natalia Shagaida’s opinion, Russia can certainly secure her domination of global markets if Russian agricultural producers will be capable of boosting their production efficiency without lagging in this respect behind the farmers operating in other countries, but the introduction of duties has reduced these opportunities.
Natalia Shagaida went on to point out that this year, according to the federal budget law, it was planned that agriculture was to get back significantly less money by comparison with what was to be generated by export duties, and funding could be claimed not only by producers of grain, but also, for example, by those of grapes. On the one hand, it is a good thing that part of the total budget projection for 2022 of RUB 96bn (as stated in the explanatory note to the draft law on the federal budget) to be generated by export duties on grain and sunflower oil, will go back to agriculture and rural development. But on the other hand, the expert argues, it is not entirely clear why social development should actually dependent on exports. “The people who live there do not differ in any way from those living in cities, and they enjoy the same right of access to public services, that is, affordable good schools, hospitals, and amenities,” she concluded.