Agricultural Production Improves in Russian Regions

Good businessmen do not hope for better times to come

Four agricultural enterprises of the Irkutsk region enter the top 300 of Russia's best enterprises. There are 200 bankrupt enterprises in the region too. The chief of the Irkutsk regional department for agriculture Nikolay Elgert talks about the situation in the agricultural industry of the Irkutsk region.

"The agricultural producers of the region experience a lot of problems in their businesses. First and foremost, there is a huge price difference between agricultural and industrial goods. There are no privileged loans for the industry, as it is practiced in foreign countries. The long cycle production (spring-autumn) cannot exist without such loans. There are 200 farming enterprises in the region that cannot restructure their debts. Bankruptcy proceedings have already been filed against many of them. The most important thing for us at this point is not to let their property be auctioned. One should establish efficient enterprises on the base of the ruined ones.

"On the other hand, despite numerous problems, there is stability in the Irkutsk region as far as absolute indexes of the agricultural output are concerned. The region takes tenth place among 89 federation units on the agricultural production efficiency. Furthermore, the region ranks first in this respect among other Siberian regions. Four agricultural enterprises of the Irkutsk region enter the top 300 of Russia's best enterprises.

"Some enterprises develop and prosper, others go bankrupt, but it is very easy to explain it. Good businessmen run their businesses under all conditions, presidents and laws - they do not refer to a bad government or a bad law. They do not hope for better times to come, they look into the future. There are countless problems, but some people work on their fields, raise the cattle, receive the stable profit while others don't. If an enterprise does not reduce the prime cost of its production, it will not be competitive on the market. Agricultural producers of the Irkutsk region grow crops, but they can not sell the grain, because its price is higher than the neighbors' from the Altay, the Novosibirsk and other regions. In 2001-2002 they delivered a fair quantity of flour to the Irkutsk region. Their flour was not better quality, but it was cheaper. In the Irkutsk region, the prime cost of grain was about 1,500 rubles ($50 ) per ton this year. The price is lower in other regions. It is possible to reduce the cost with the help of efficient machinery, mineral fertilizers and high-yielding crops.

"The law about the circulation of the agricultural land is expected to change the situation in the industry, but it is hard to say anything definite at this point. The law is contradictory and complicated. Furthermore, 82 percent of village residents have land shares as their property. Russian law-makers made a big mistake when they approved that land distribution law. This land is being wasted now, nobody works there, but it is impossible to vest it to hardworking farmers because of high prices.

"As far as the state support of agricultural enterprises is concerned, the regional budget assigns funds to acquire the agricultural machinery, the livestock, prestigious crops, high quality fertilizers and other production. The money is assigned to successful, profitable producers. The machinery is financed with funds that come from the state budget and by the farmers. Eighty-two percent of the budgetary money has already been used as of the end of September. In addition, regional farmers have purchased pedigree cattle and poultry in the sum of eight million rubles this year."