January 15, 2011

Russia needs US$7.3 billion for spring grain planting

Drought-hit Russia will need RUB220 billion (US$7.30 billion) for its spring grain sowing campaign after a drought last summer ruined crops and slashed its winter sowing area, the Agriculture Ministry said Friday (Jan 14).

The ministry database shows that it allocated RUB30 billion (US$1 billion) in subsidies for the 2010 spring sowing campaign.

Russia aims to harvest at least 85 million tonnes of grain in 2011, up from 60.9 million tonnes in 2010, when the country was hit by its most severe drought in more than a century, prompting it to ban grain exports from August 15 last year to July 2011. It harvested 97 million tonnes of grain in 2009.

Russia plans to sow spring grains of around 30 million hectares, after sowing 15.5 million hectares with winter grains, down from 18.9 million in the previous crop year. The total area sown for the 2009 crop was 47.6 million hectares.

State-run agricultural bank (Rosselkhozbank) will provide loans of up to RUB110 billion (US$3.67 billion) and Sberbank at least RUB60 billion (US$2 billion), Agriculture Minister Yelena Skrynnik said in a statement.

In other measures to help farmers, agricultural and fertiliser producers have agreed to keep potassium fertiliser and pesticide prices at 2010 levels, but ammonium nitrate and composite fertilisers will rise 12.8%, the statement said.

Railway fees to ship up to 450,000 tonnes of seeds to drought-hit regions will also be cut, it said.

The government has already channelled RUB35 billion (US$1.17 billion) from the state budget to buy seeds, fuel and mineral fertilisers, the ministry said.

The Russian Grain Union, the industry's lobby, believes that Russia may export some 15 million tonnes of grain if it is able to harvest 80 million tonnes in 2011.