TIGHTENED REQUIREMENTS FOR CUSTODIANS OF AGRICULTURAL PRODUCTS OF THE INTERVENTION FUND RESERVES

Changes developed by the FAS Russia and the Ministry of Agriculture of Russia are aimed at improving effectiveness of commodity interventions

The practice of conducting commodity interventions in the grain market has shown that elevators, which are the depositories of grain of the intervention fund, set prices for their services in contracts concluded with buyers that exceed prices in the commercial market. Besides, elevators include provisions in the terms of contracts that are not related to the subject of the contract, evade the conclusion of contracts and take other actions that prevent the conduct of commodity interventions or reduce their effectiveness.

In the course of commodity interventions in 2020, the FAS Russia revealed massive violations of antimonopoly legislation on the part of the grain keepers of the intervention fund. In this regard, the antimonopoly authority appealed to the Ministry of Agriculture of the Russian Federation with a proposal to amend the regulatory framework that would reduce the risks of violations by the keepers. The proposal was supported by the Government of the Russian Federation, and the corresponding resolution* amended the rules for storing agricultural products of the intervention fund. According to them, in the case of the sale of agricultural products from the intervention fund through exchange trading, the custodian is obliged to conclude a storage agreement with him on the terms specified in the storage agreement within 5 working days from the date of the buyer's request.

Besides, the Ministry of Agriculture of the Russian Federation on the proposal of the FAS Russia has prepared amendments to the federal law on the development of agriculture. In accordance with them, the relevant ministry is given the authority to deprive the keepers of the right to participate in the competitive selection of grain keepers of the intervention fund if they previously violated the terms of the contract for the storage of agricultural products of the intervention fund. The adopted and planned changes are aimed at improving the effectiveness of ongoing commodity interventions.

The adoption of the changes will contribute to the stabilization of prices in the domestic market of agricultural products.

* Decree of the Government of the Russian Federation No. 1147 of 08.07.2021 “On Amendments to the Rules for the Purchase of Agricultural Products from Agricultural Producers and (or) Organizations and Individual Entrepreneurs Engaged in Primary and (or) Subsequent (Industrial) Processing of Agricultural Products Produced by Agricultural Producers in the Territory of the Russian Federation in the Process of State Procurement Interventions and its Implementation”.