FAS ISSUED A WARNING TO THE GOVERNMENT OF THE OREL REGION

FAS found elements of violating the antimonopoly law in the actions for granting subsidies to agricultural producers

The Government of the Orel region approved the Subsidies Procedure [1], aimed at increasing productivity in the dairy cattle-breeding.

According to the Procedure, the annual subsidies allocated to this purpose form the federal and regional budgets are grants in full to agricultural producers twice a year for the accounting periods of Q1 and Q2 of the current year.

In FAS opinion, the Subsidies Procedure creates discriminatory conditions for particular agricultural producers in the Orel region that could not claim subsidies in the period of granting them under the current law due retractions imposed because of cattle leucosis. In the subsequent periods of the same year, however, these agricultural producers may have the right for obtaining the subsidy, which puts them in unequal economic conditions for their operations in comparison with the producers that obtained subsidies.

The antimonopoly body finds that actions of the Orel Regional Government contain signs of violating the Law “On Protection of Competition” [2].

FAS issued a warning to the Orel Regional Government to stop such actions by amending the Subsidies Procedure accordingly: agricultural producers should be able to get subsidies for the milk actually sold and (or) shipped for own processing throughout the entire period of the current (relevant) year.

[1] No. 52 Decree of the Orel Regional Government of 25.02.2013

[2] Clause 8 Part 1 Article 15