Russia's Putin urges government to start grain purchases

Russia's Prime Minister Vladimir Putin asked the government on Friday (August 14) to start grain intervention purchases to the state stocks to provide support to local producers.

The government buys grain when domestic prices are low and sells them when they are rising.

It bought 9.627 million tonnes of grain at intervention tenders in August 2008 - May 2009 after a bumper 2008 crop of 108.1 million tonnes. But only 8.064 million were delivered to government-appointed silos.

The government started buying domestic grain after a big 2002 crop of 86.6 million tonnes to support falling prices, and purchases continued in 2005 and 2006 at levels below 2 million tonnes each year.

It sold most of the grain in 2004 and 2007-2008 to keep rising prices down.

Agriculture ministry officials have said the purchases could start as early as Aug. 1 this year, but no official announcement has been made so far.

Agriculture Minister Yelena Skrynnik said the best timing for the start of the interventions is the end of August and start of September.