OREANDA-NEWS. August 23, 2010.  The Russian Prime-Minister, Vladimir Putin has signed a decree to subsidize interest rates on extended loans to agricultural producers affected by the recent drought. As a result, agricultural companies, whose total debt stands at RUB 127 bn, should be granted interest rate subsidies worth RUB 2.6 bn in 2010 and RUB 7.9 bn in 2011 and 2012.

According to first vice PM, Victor Zubkov, the government’s decision could make it possible to subsidize a part of interest expenses under short-term and investment load, which may be extended by up to 3 years. The key lenders to Russian agricultural producers are Rosselkhozbank and Sberbank. On August 18, Sberbank deputy board chairman, Andrei Donskikh said the bank was ready to prolong loans to agricultural companies affected by the drought by 3 years. “We have phrased our suggestions and have submitted them to the government. We expect a relevant decree to be published in the near future. This measure requires government support, as loan prolongation does not necessarily mean the extension of government subsidies”, Donskikh said.