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2012.04.30 | Russian ag ministry offers binding govt service on grain market

Russia’s Agriculture Ministry has prepared a draft of the president’s ruling obliging the Federal Service for Veterinary and Phytosanitary Oversight to issue national quality certificates to grain producers and exporters worth about 1 billion rubles annually, business daily Kommersant reported Thursday.

Under the ruling, the service is to issue certificates for export batches and government purchases of grain and grain processing products. The service is also expected to control grain imports and record volumes in storage and circulation. The watchdog is to carry out the additional functions “within its current staff” and without additional expenses from the budget.

The Agriculture Ministry points out that control of government grain purchases by the Federal Service for Consumer Rights Protection and Human Welfare is not required and can be abolished.

According to the Agriculture Ministry’s estimate, the quality oversight services, provided by the Federal Service for Veterinary and Phytosanitary Oversight, would cost 0.5% of the price of an inspected grain batch. Thus, the reform would cost exporters about 1 billion rubles under the planned 25 million tonnes of grain to be exported in 2012. The Agriculture Ministry believes that the charge would have “no impact on the economic state of exporters.”

Furthermore, the government is to work out a list of grain types and products subject to the state control, as well as the order of quality certification under government purchases, within six months.

The Agriculture Ministry attributes the necessity of the reform to the fact that otherwise “Russia could become the only country” among major grain producers, which ignored “the quality control of grain and grain processing products.” Similar regulations are enacted in Belarus and Kazakhstan, as well as in Canada and the U.S.

(29.4978 rubles – U.S. $1)