Russia still hasn't found way to eliminate federal budget's debt on subsidies for interest rates on investment loans for agribusiness sector, official says

BELOKURIKHA, ALTAI TERRITORY, Russia , February 21, 2014 () – The Russian government has still not found a way to eliminate the federal budget's debt on subsidies for interest rates on investment loans for the agribusiness sector.

"A solution is being sought for how to resolve the situation with debt on investment loans," Deputy Economic Development Minister Andrei Klepach said at a winter grain conference in Belokurikha on Friday.

He said that, taking into account debt paid down at the end of last year, the debt outstanding is still nearly 18.5 billion rubles. "This money needs to come from somewhere. For now, there is no supplement for the agriculture sector in the current structure of the budget," Klepach said.

He said the Economic Development Ministry supports a proposal made earlier to take this money from subsidies per liter of milk. "Apparently, money will also be taken from some regional programs," Klepach said.

Nonetheless, there will still be a "fairly substantial deficit, both for settling accumulated debt and for the need to find money, at least 6 billion rubles for subsidizing the interest rate on loans for planning and later for harvesting," Klepach said.

"I think we'll find a solution," he said. However, there are a number of system risks for support for agriculture, he said. The government has not managed to raise the level of per-hectare support or support for subsidies, or the continuation of subsidized investment loans for livestock farming and other purposes, Klepach said.

"I'm not sure that in 2014 we'll get growth of investment in agriculture, including due to these reasons," Klepach said.

The Agriculture Ministry has reported that, following an inventory of investment loans, the total debt on subsidies for the amounted to 28.7 billion rubles; 10.4 billion rubles of this was paid down before the end of 2013. The ministry plans to subsidize new investment loans only after the debt on previously issued loans is paid off.

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