IRINA EPIFANOVA: ON-EXCHANGE TRADING WITH AGRICULTURAL PRODUCTS AS A CONDITION FOR SUBSIDIZING

Deputy Head of FAS Department for Control over the Agro-Industrial Complex discussed measures for developing competition in the sector

On 7 December 2018, Deputy Head of FAS Department for Control over Agro-Industrial Complex, Irina Epifanova, took place in the XVIII Annual Conference on Investments in AGC – “Russian Agro-Holdings – 2018”.

In her report “Competitive environment on the agro-industrial markets. A view of the regulator”, the speaker highlighted the performance specifics of the agrarian sector, influencing competition development in this segment. In particular, Irina Epifanova mentioned absence of the modern sales infrastructure, lack of materials resources, administrative barriers and maintaining price disparity for the means of production and agricultural products.

FAS representative reported that in summer 2018 the Government of the Russian Federation approved 2018-2020 Action Plan (Road Map) for developing competition in the sectors of Russian economy and a transition of particular sectors of natural monopolies to the state of a competitive market, including a set of measures designed to develop competition in the agro-industrial complex.

“The Action Plan is based on the National Competition Development Plan approved by an order of the President of Russia. For the Agro-Industrial Complex it is expected that the marketable value of particular types of agricultural products will increase, the supply geography and the assortment of agricultural goods trade on-exchange will expand and dependence of the domestic market of foreign selection and genetic materials will decrease”, said Irina Epifanova.

The Road Map measures in the agro-industrial complex are designed to increase accessibility of transport and commodity-distribution infrastructure, reducing the level of violating the antimonopoly law by the authorities when granting subsidies, expanding on-exchange trading with agricultural goods and food products, stimulating development of Russian selection and seed-breeding.

“Advancing on-exchange trading in Russia is pronounced the fundamental principles of the state competition development policy. The short-term plans for developing on-exchange trading with agricultural products include expanding the line of agricultural products traded on the exchange and achieving liquidity of exchange trading”, emphasized Irina Epifanova.

As stated by Irina Epifanova, to improve liquidity of exchange trading with agricultural products, FAS drafted Road Map measures for state support of agricultural producers aimed at stimulating their involvement in exchange trade.  Such proposals comprise: subsidizing delivery of agricultural products to exchange product warehouses, the interest on swaps concluded during the on-exchange trading, and the tariffs set by the goods supplies operator for storing and registering agricultural products allocated for on-exchange trading.

“The Road Map for competition development will facilitate investments in the agrarian sector and increase competitiveness of Russian agricultural and food on both domestic and external markets”, summed up Deputy Head of FAS Department for Control over Agro-Industrial Complex.