''We do not produce more agricultural products, we just began to eat less…''

Interview with Director of Sovkhoz named after Lenin Pavel Grudinin about how large is the difference between the official reports and the real situation in agriculture

''We do not produce more agricultural products, we just began to eat less…'' Photo: mkkprf.ru

How many stadiums Zenit-arena will the agricultural support programme of Russia for 2017 be able to comprise? Why preferential loans for farmers are absolute nonsense? Is a positive effect of the sanctions possible? What do the customs do with contraband gold, and why such methods are not applicable to contraband products? A Russian olitical and state figure, director of Sovkhoz named after Lenin Pavel Grudinin answered to these and other questions to Realnoe Vremya.

''We have achieved food security not because we began to produce more but because we began to eat less''

Mr Grudinin, Prime Minister Dmitry Medvedev has recently instructed all relevant ministries to submit to the government proposals for additional allocation of funds for the state programme of agriculture development and for activities of concessional lending for agriculture. How did you react to the news? Do you have hope for some effect?

Frankly speaking, it is an ordinary idle talk. Just recently the government has reduced the state programme on agriculture for this year by 39%, and then Dmitry Medvedev suddenly ''out of some hangover'' offered to increase again spending for the same state support. Why should they cut it at all? First they say that we will have a state programme until 2020, they give beautiful figures, which are approved, announced with fanfare, and then quietly cut and underfunded, and again they loudly announce an increase.

In general, I have a negative attitude to this government because it is the government of amateurs. These people are populists, who know each other, they are appointed not according to the principles of business qualities but to the principle of ''convenient/inconvenient''. They do not have any relation to our lives. Therefore, nobody believes in their programmes anymore, major manufacturers, unless they are close to the power, do not rely on that money.

What verdict can you give to concessional lending?

A verdict is given by the court. In my opinion, it is a support, because, in fact, no country in the world has the concept of preferential lending. They have simply lending. Another thing, it is the direct allocations for agriculture, when you are not ''held hostage'' by a bank. By the way, I am a member of the Public Council under the Ministry of Agriculture of the Russian Federation, and, in my opinion, I'm the only one who voted against changing the principles of the 5% lending. Again, the scheme has not changed, and again the banks decide whom to give the state money. But the bank cannot make the decision whether to give public money to a particular organization or not. Banks take kickbacks — we all know it well.

I always cite Belarus as an example: they lend money to businesses at 3% per annum, but to everyone. We have 5%, but not for everyone, only for those who are closer to the trough — to a governor or a bank. It is wrong, it should not be like this.

''Go to a store, you will realize that everything that the government states is not confirmed in real life.'' Photo: Maksim Platonov

So, does the picture in agriculture which is given in various reports and official reports have nothing to do with the real situation?

Go to a store, you will realize that everything that the government states is not confirmed in real life. And those poor pensioners who were told that they live in the great country at 8,000 rubles, and the peasants, who were told about soft loans, but they did not get them…

More and more palm oil is being imported to our country: does it really indicate that people began to eat better? No, they simply buy cheap products, and consequently, of less quality. But if you produce quality products, then what is the point for you to produce a lot if no one buys? We have reached the so-called food security not because they began to produce more but because they started to eat less. People have reduced consumption of everything: meat, milk, fruits, vegetables.

Sometimes I look at them and think: does our government understand what they're saying? Once the Soviet Union produced up to 100 million litres of milk, but the Russian Federation — from 55 to 60 million litres. Today they are saying that on paper we have 30 million, but in fact, it is no more than 18 million litres of marketable milk. Let's take the grain: Russia once produced 129 million tonnes, and we were short of grain, we even bought additionally, and now we supposedly have 105 million, and it is even in abundance. Yes, it is all because we have no livestock.

They supposedly always have no money. Let's compare: the entire programme of agriculture support in Russia this year has amounted to about 240 billion rubles, and the stadium Zenit-arena alone — 50 billion. Look, what can we say in this situation? 9 billion rubles were found in the safe of this poor, unfortunate Colonel Zakharchenko, while the whole state programme for agricultural territories development support is estimated at 7 billion. We no longer have rural schools, have no rural hospitals, there is nothing, and they all talk about a success in rural settlements. It's terrible.

''We no longer have rural schools, have no rural hospitals, there is nothing, and they all talk about a success in rural settlements...'' Photo: glavny.tv

''Let's say you arrested contraband gold on the border — what will you do with it? Destroy by bulldozers?''

Mr Grudinin, is it hard for your business to adapt to the ''new reality'' after the imposition of sanctions?

The sanctions have not affected us — either those that are imposed against Russia or those imposed by Russia. Let me explain why: first, you should forget about the myth of ''import substitution". No sanctions will help, no substitution is possible if domestic producers are uncompetitive. You can produce goods of better or the same quality but cheaper in cost. But about what competitiveness of agricultural production in Russia can we say if our products are much more expensive than in other countries? They have a more significant state support, therefore, in the cost of their products up to 50% (Airat Khairullin told me this) – it is subsidies. We have subsidies at 1-2%, but our competitors have them 200 times more.

The second question: how do you think, who pays for Platon, taxes on cadastral value, the excise tax on fuel, vet certificates? Agriculture does. We have very high taxes on production in comparison to other countries. Once I led a discussion, where the minister of agriculture of Omsk Oblast spoke. He said: ''We have achieved it, we have produced goods at 100 billion rubles!'' I would like to note that their state support is 5 billion rubles. Let's count: VAT from 100 billion rubles, even if it is important agricultural commodities (milk, grain) – it is 10%. That is, they paid 10 billion as taxes, and the state support — 5 billion, and in addition there is still a bunch of taxes that we pay. Agriculture is just being bankrupted.

It is just necessary to abandon Platon system and the excise tax on fuel for vehicles transporting agricultural products. The diesel for tractors is cheaper than diesel for cars everywhere in the world. It is a genocide of producers, and then they say: ''Import substitution''. What on earth import substitution? If you make people rich, they will start to buy high-quality agricultural products. But our people are getting poorer, they are trying to sell them some cheap substitutes: bread that is not bread, milk that is not milk, sausages are not really sausages — they put some soy and something else and call it sausage.

Of course, the restriction of food imports worked out at some point, but then the main limitation was the exchange rate — with such a high dollar rate it was impossible to import anything here. It would seem that the market was freed, and we were to occupy it, but without investments it is impossible. What happened with investments? Almost immediately the interest rate increased to 22-24% per annum, now it has become a little less, but who cares, it still does not make loans available. No one has been able to expand production. Therefore, I do not see any positive effect of the sanctions – it could not be and cannot be.

The sanctions imposed by Russia are also not necessary. The president himself has recently confirmed: ''Listen, from Belarus, apples were imported five times more than they could produce, where are these apples from?'' It is clear that the apples are from Poland. I saw strawberries from Burkina Faso last year — well, it is clear that they are not from there, but from Turkey or Greece. The customs do not cope with their responsibilities. The proof of this are 7,500 tonnes of food that were destroyed on the territory of Russia. But how many products were not destroyed?

''The customs do not cope with their responsibilities. The proof of this are 7,500 tonnes of food that were destroyed on the territory of Russia. But how many products were not destroyed?'' Photo: smolensk-i.ru

By the way, what do you think about the destruction of sanctioned products? Personally for me it was difficult to read the news that somewhere a tonne of apples, poultry and so on were squashed/burnt… Isn't there a better way to do it?

In my opinion, it is a crime for the country where people do not eat enough. Perhaps you have seen news stories from homes for elderly people, care homes, where people are given food once a day, what is more, almost only bread and water. Imagine, that at the very moment someone somewhere was destroying food products.

Yes, it is contraband products. Well, you arrest contraband gold — what will do with it? Destroy by bulldozers? No, it will go to the state. Well, take the food to the state income! Especially as everyone says it's quality product, but it is just not from our country. Give products to people who these peaches or duck will never see in their life because they have no money and never will. Give them to hospitals, to feed people, orphanages, soup kitchens.

The whole world is laughing at us. By the way, on that moment when the government took the decision to destroy the food, the French decided that supermarkets have no right to destroy the food which term realization is coming to an end — they must give it to the poor. Rich and successful French people, who are not starving, have made this decision, and our power has decided that it is necessary to destroy quality products.

''Who have no money? Those who have built this stadium or those who increases salaries to themselves?''

Do you agree with Dmitry Potapenko that the sanctions imposed are not against business but against the officials? Very often, when businesses complain about the situation, he hears: ''Gentlemen, the sanctions have been imposed against you.''

Yes, Dmitry is right. The sanctions have been imposed against a certain number of people close to the power. Prime Minister of the Russian Federation, from whom we have started the conversation, said that for pensioners there is no money. But they have money for everything else: have the officials refused new cars? Look at government procurements, look at Moscow, which already does not know where to shove this paving slabs.

There is no money. Who have no money? Those who have built this stadium or those who increases salaries for themselves (the average salary in the government is more than 200,000 rubles per month)? In fact, abroad alone we have about $90 billion in US securities. The oligarchs are becoming richer and richer — look at the Forbes list. It seems to me that there is money in the country, they just need to be redistributed properly.

Mr Grudinin, isn't there a slightest progress in our agriculture? It cannot be that everything is so bad...

Yes, there is progress in the production of grain, vegetable oil, sugar, meat and poultry, but it is, unfortunately, on the basis of imported technology. If we now disconnect from imported components, then we'll go back 100 years ago. We have become very dependent on foreign suppliers.

Previously, we produced less, but we were independent. Tractors and farm machinery, seeds and plant protection products were domestic. Have we achieved something? Of course, by investing some money. I'll give another analogy: you can build a stadium for 6 billion, and you can build it for 50 billion, but it will not change because it is still our athletes will play there, which means they will lose anyway.

By Lina Sarimova