Russia proposes insuring farmers
The Russian government presidium on Monday discussed plans to save the country's agriculture from drought. It appears the government wants to shift the burden of weather risks to the private sector: it has offered insurance companies to save the farmers whose crops were devastated by the drought.
The Agriculture Ministry has drafted a bill on state-supported agricultural insurance and will soon forward it to the State Duma, the lower house of parliament. The oil companies are to support farmers by giving them a traditional 10% discount on fuel.
The government presidium discussed the drought which has hit Russia for a second year running. Prime Minister Vladimir Putin as good as said the government would no longer support agriculture only with public funds, because its deficit budget may not survive allocations for unplanned expenses due to bad weather.
The government has proposed finding the money in the insurance sector.
Putin said the government could approve subsidies to the affected farms, primarily in the regions where farms insured their harvests. He has instructed the Finance Ministry to analyze the situation, stressing the need to cut short any attempts to profit from the drought.
Agriculture Minister Yelena Skrynnik said her department was monitoring the agricultural insurance market in conjunction with the Federal Service for Insurance Supervision and the Interior Ministry to expose mala fide businesses. She said 64 companies are working with farms in Russia, but only 20% of the sown area has been insured in 2010.
According to the planned changes, state assistance to agricultural insurance will cover only a limited number of crops listed in the Russian food safety doctrine and also a limited number of catastrophic risks. The sector will have common insurance rules (to be formulated by a professional union of insurers established for this purpose) and also common damage compensation standards, which will allow lowering the underwriting rate. Farms will be also able to insure lost profit on a commercial basis.
Market players have supported these proposals.
Deputy Prime Minister said at the government presidium that a traditional 10% discount on fuel and lubricants would be granted to agriculture in July. He assessed the oil companies' assistance to the sector this year at 3.3 billion rubles ($107 million).
Nobody said that this is a non-budget support measure. In fact, the government has decided to extend the discount provided to farmers during the spring sowing season.
Market players assess possible harvest losses at 30 billion rubles ($971.5 million).
Tajikistan, Kyrgyzstan want Russia to lift export duty on gasoline
Tajikistan and Kyrgyzstan have asked Russia to cut its export duty on gasoline to zero if they join the Customs Union, which currently comprises Russia, Kazakhstan and Belarus.
The zero duty was discussed late last week at a meeting between Almazbek Atambayev, first deputy prime minister of Kyrgyzstan's interim government, and Russian Prime Minister Vladimir Putin.
Tajik Prime Minister Akil Akilov also asked Putin to review the gasoline export duty, said a source with ties in the Tajik government. He said Tajikistan sent a relevant letter to Russia in June but is still waiting for an answer.
Tajikistan, which is discussing its possible entry in the Customs Union with Russia, hopes for a positive answer.
Kyrgyzstan and Tajikistan have received Russian fuel duty free since 1995, in keeping with protocols to the intergovernmental agreements on the establishment of a free trade zone in the CIS. However, Russian customs started collecting a duty on oil products exported to Kyrgyzstan on April 1 and to Tajikistan on May 1.
Kyrgyzstan buys about 3 million metric tons of Russian fuel a year, and Tajikistan imported 551,300 metric tons of oil products from Russia in 2009. However, Russian gasoline export to Kyrgyzstan fell by about 30% and to Tajikistan by nearly 9% in the first six months of 2010. As a result, gasoline prices soared by 30% in Tajikistan, according to the May and June statistics of the country's Economy Ministry.
Dmitry Peskov, the press secretary to the Russian prime minister, said the export duty would be lifted only if the said countries join the Customs Union.
Kyrgyzstan and Tajikistan promised to join the Customs Union ten years ago, but then changed their plans, said Alexei Portansky, a leading researcher at the Moscow Higher School of Economics. Negotiating entry now will not be easy for them, especially for Kyrgyzstan which is a WTO member, he said.
Russia is unlikely to cut the duty to zero for them otherwise, Portansky said, adding that Belarus has long been trying to get a similar concession.
Gazprom Neft, the oil arm of the Russian gas export monopoly, is the main player in both countries. In 2006, it bought 74 filling stations in Kyrgyzstan and currently controls about 30% of the retail market in the country and about 70% in its capital, Bishkek. In Tajikistan it has 19 own and 6 leased filling stations and a 33% share in the retail market.
The company writes in its corporate bulletin that the introduction of the duty has affected the Russian oil companies' operation in the CIS. If the settlement of the disputed issue takes too long, their assets in Kyrgyzstan and Tajikistan will turn into a dead weight.
Under new technical regulations enacted two weeks ago, national tobacco manufacturers are instructed to print "Smoking Kills" signs on every cigarette pack. This measure will be followed by another tobacco-price hike.
It raises the question, can Russians who have survived Mikhail Gorbachev's perestroika policies, the break-up of the Soviet Union and other upheavals really be scared by notices on cigarette packs? There are also simply too many smokers in this country, you can't scare them all.
Official statistics show that 65% of Russian men and 30% of women are smokers. The figures are worse for minors where 60% of boys and 40% of girls are smokers. People are no longer surprised to see a child with a cigarette jutting from his or her mouth. Smokers also remain undeterred by skyrocketing tobacco prices following a 100% increase in excise-tax levels.
The entire world smokes and pays dearly for this bad habit. Russia has made it into the top ten countries, due to be affected most by smoking throughout the 21st century. The UN estimates that over five million smokers worldwide die each year, and that this number will rise to eight million by 2030. About 500,000 Russian smokers die each year.
In 2008, Russia finally joined the World Health Organization's Framework Convention on Tobacco Control (FCTC) that had already been signed by 150 countries.
Here the aspirations of people the world over completely coincided with the state's material interests. Most Russians are heavy smokers, annually consuming 414 billion cigarettes which are reportedly the cheapest in the world. Annual per capita cigarette production totals 3,000 cigarettes in this country.
At the same time, the federal budget does not profit from smokers because Russian tobacco excise tax is one of the lowest in the world. The relevant excise tax totals 1.3 euros in Bulgaria and Romania, respectively, and 24 euro-cents in Ukraine. But the Russian budget gets just 13 euro-cents from every cigarette pack sold.
The Ministry of Finance recently proposed that the government raise the excise tax on a number of products. Tobacco excise tax was raised by 20% last year and by 41% in 2010. There are plans to raise this tax by a further 44% in 2011. Excise tax rises will not only cause tobacco price hikes but will also facilitate the expansion of the black market, which is now estimated at 1% of the tobacco market nationwide.
Yesterday Russian President Dmitry Medvedev visited the Foreign Ministry to address the ambassadors and permanent representatives of the Russian Federation abroad. The president made a sensational statement on Iran's nuclear issue and detailed Russia's diplomatic priorities for the next two years, which have changed due to the declared policy of modernization.
In July 2008 Dmitry Medvedev, who had just been elected Russian president, approved the Foreign Policy Concept for the Russian Federation; in July 2010 Medvedev, one of the authors of the new START treaty, initiator of the European Security Treaty and Barack Obama's friend on Twitter, talked about Russia's national interests in a new vein, with modernization topping the agenda.
He mentioned the priorities of moving from a resources-based economy to an innovation economy, stressing that diplomats, as well as those working for economic agencies, have to understand these priorities as well. The boundary between foreign and domestic policy is diminishing. Therefore Dmitry Medvedev urged the diplomats to prioritize the struggle against organized crime and to strengthen the institutions underpinning democracy and civil society.
In fact, the president said that the diplomatic service has to improve the quality of their work. He stressed that they have to get the world's intellectual elite and non-governmental organizations more involved in discussing these issues and added that they had to work in an open and pragmatic manner, rejecting confrontation and the stereotyped image that any government, including Russian, has.
The president said that Russia's foreign agencies should not limit themselves to the banal competition for the number of messages sent to the "center." Establishing modernization alliances with Russia's main partners (such as the European Union and the United States) should be their main goal.
Dmitry Medvedev described the Asia-Pacific Region as a vital external source of modernization, although he added that despite its significance, cooperation with CIS partners, where mutually complementary innovation spaces will be formed, remains the top priority.
In terms of the general situation on the international scene, Dmitry Medvedev urged diplomats to move away from simplistic approaches to Iran's nuclear issue. He then uttered the sensational statement that Iran was getting closer to possessing the potential that in principle could be used to create nuclear weapons which is why diplomats must be patient and must quickly resume the dialogue with Tehran.
Tourism statistics in Russia
Foreign travel to Russia is looking up following the crisis, said the Russian Association of Tour Operators (ATOR). But it still is behind the out-bound flow of Russian tourists. The reasons for this are that tours and hotels are expensive and many other obstacles await foreign travelers in Russia.
This state of affairs has been confirmed by statistics released by the Federal State Statistics Service (Rosstat). According to them, the number of foreigners that visited Russia in the first three months of 2010 increased by 1.3% quarter-on-quarter to reach 187,000 people. That is 3,000 more than last year. But, ATOR analysts warn that figures for the pre-crisis year 2008 remain unbeaten: almost 245,000 people visited Russia in the first three months of that year.
Germany leads the field for the number of overseas tourists that visited Russia in both the first quarter of 2010 and last year (24,600 people). Today one in eight foreign tourists on the Russian streets comes from Germany. Compared with 2009, there has been a 7% increase in the number of Germans traveling to Russia.
China comes second in at almost 15,000 people. True, China can only tentatively be included in these tourist figures. The statistics, as a rule, do not divide tourists according to groups, such as business tourists or those visiting relatives. And it is mostly market traders who come to Russia as tourists. Since the beginning of 2010, their numbers have swelled by over 50% compared with the first quarter of 2009, and are almost 12% up on the first quarter of 2008.
The Finns rank third in the number of arrivals. France comes fourth, followed by Italy. Turkey is near the five top leaders. In the first three months of 2010, Turkish tourist numbers increased by over 28% to reach 10,000.
Exorbitant prices during the white nights in St Petersburg - from May to mid-July - deal the worst blow to in-bound tourism. Accommodation costs shoot up by 100%, leaving many countries unable and unwilling to send tourist groups to this city during this period. Yet it is St Petersburg, Moscow and the Golden Ring that attract foreigners in the first place. According to the Russian Union of the Travel Industry, these tourist centers account for 95% of all visits. And while the picture for conducted tours is still healthy, many other problems remain.
Foreign travelers are put off by the high price of tourist packages and the lack of economy-class hotels. A week long tour to Russia costs something like 1,500 euros, twice as much as a similar tour across Eastern Europe.
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MOSCOW, July 13 (RIA Novosti)