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IKAR in Mass Media

Duma passes agricultural development bill in first reading

27 апреля 2006 года

Interfax, 24.04.06. The State Duma on Friday passed in the first reading a bill on the development of agriculture, which is intended to establish the legal foundation for the implementation of state policy in this area, but experts said this bill will be pointless if a state program for the development of agriculture and regulation of agri-food markets is not adopted along with it.

The bill introduces the concept of agricultural goods producer; defines the goals, principles and key directions of state agri-food policy; and defines the powers of federal agencies in implementing state agri-food policy taking into account that support for agriculture is within the jurisdiction of regions.

The bill states that state agri-food policy will be implemented by carrying out a state program for the development of agriculture and regulation of agri-food markets, which the government will approve for periods of three to five years. The program is supposed to contain a range of sub-programs with specific measures and mechanisms of state support for agriculture.

But the bill will be pointless if such a state program is not adopted along with it, and much will depend on which government agency will adopt this program, experts said.

"Nothing will change with the passage of this law if the main issue is not resolved – how will the state program that will ensure the implementation of the law be adopted and approved," State Duma deputy Viktor Semyonov told Interfax.

If the program is approved by the government, as it insists, then little will remain of this truncated bill, he said. Legislative procedures do not provide for the State Duma approving state programs, "but a compromise can be found," he said.

The procedure for adopting the state program is a fundamental issue, as real actions that can influence the situation in the sector revolve around it, Semyonov said. "And even the fact that the government has still not presented the draft of this document, although it has already been prepared, shows how important this is."

The law will only work if a state program will be adopted with it, agrees Rosselkhozbank deputy chief executive Viktor Khlystun.

The law is necessary, but the version proposed by the government is an "absolutely declarative document, it talks about the need for state support for the sector and state regulation of markets, but does not contain concrete instruments, concrete mechanisms for this," Khlystun said.

"I'm worried that the law will be passed, but the state program will be discussed for another two-three years, just like this law was discussed," he added.

The most realistic scenario would be for the bill to be passed and for the State Duma to simultaneously pass a resolution about the approval of a state program related to its implementation, he said.

The bill should also have strict definitions of key concepts, above all that of agricultural producer, Khlystun said. "And this definition should not only be clear, but also comprehensive, and exist in the same form throughout the legislative base. Right now it is different in different laws," he said.

"The law needs to be more concrete, which would make it possible to create an investment horizon for business, a platform for investment, at least for three years ahead," said Dmitry Rylko, head of the Agrarian Market Institute (IKAR).

The bill needs a list of key instruments for regulating food markets and the scale of state support for specific programs, Rylko said. If needed, it should allow for the quick transfer of allocated funding from one program to another, and the right to make such a decision should be within the powers of the ministry in order to avoid long approval processes, he said.

It is also necessary to clearly define mechanisms of state actions in regard to agriculture in force majeure circumstances, both of a macroeconomic and industry-specific nature, Rylko said.

In the form proposed by the government, the bill is not needed by anyone, said Yevgenia Serova, president of the Agri-Food Economics research center.

The initial document had provisions that established framework relations between the state and business and could create a stable environment for the sector's development, she said. But in the course of two years of debate, the Finance Ministry did not come to agree with the view of the bill's authors about the need to stipulate concrete financial obligations in the document.

This calls into question the ministry's intentions to carry out budget reforms and switch to drafting three-year budgets, Serova said.

Source: Interfax  |   |  Comments: 0   Views: 48

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