OREANDA-NEWS. May 22, 2014. The Education and Methodics Centre of the Federal Antimonopoly Service in Kazan organized an international workshop on “Compliance with the Antimonopoly Law in Agro-Industrial Complex”.

On the first day representatives of the competition authorities from Russia, Belarus, Kazakhstan, Bulgaria, Serbia, Japan, Indonesia and Ecuador discussed methodological approaches to market analysis.

The second day focused on state regulation of agrofood markets.

Antimonopoly regulation of agro-industrial complex is one of the priorities in the work of the antimonopoly bodies because the state of this sector of the economy is crucial for the national food safety.

Deputy Head of Orel OFAS Russia, Lubov Bubentsova, discussed specifics of antimonopoly regulation of the grain market.

Grain market comprises several stages: grain production, wholesale and retail sales, storage and intermediary services for grain promotion. According to Orel OFAS, antimonopoly regulation over this market should primarily concentrate on removing entry barriers, including bank interest rates, high risks for agricultural producers and high logistics costs for sale of the finished products.

“During the entire history of Orel OFAS Russia, there was not a single antimonopoly case against grain producers. A negative aspect for competition on the grain market is the segment of grain storage and warehousing services: it is controlled by four monopolists. It is possible to overcome the problem by developing the infrastructure: constructing new modern elevators”, added Lubov Bubentsova. “Also, in 2013 grain producers in the Orel region began mastering a new storage technique – in special polyethylene sleeve-bags”.

The Head of Bashkortostan OFAS Russia, Zulfira Akbasheva, outlined some adverse factors, affecting the milk market: distorting statistical data on cattle stock and milk production level, the consequences of the draught in 2010, reduced backyard milk production, expensive related goods, for example, packaging material, and national currency exchange fluctuations.

To develop dairy cattle breeding and increase milk production, Baskortostan has adopted a target progamme: integrated modernization of 500 commercial dairy farms in the Republic in 2012 - 2016 (1-3 farms in every district per year).

“Not only Bashkortostan but also Russia in general experiences milk shortage. On the one hand, it seems that there is plenty of milk at stores; on the other, the product is more abundant than cows really give. It means that it is not milk if other ingredients are used for production: dry milk, palm oil”, emphasized Zulfira Akbasheva.

The State endeavours to develop markets, and, consequently, competition; notably, not only stimulating investors but also by subsidizing agricultural producers.

As pointed out by Deputy Head of FAS Department for Control over Chemical Industry and Agro-Industrial Complex, Irina Epifanova, such subsidies are granted for support of cattle breeding and crop farming, sustainable development of agricultural areas, improving soil fertility, consulting services, information support, etc. She made a presentation detailing the algorithm for obtaining subsidies and implementing government programmes.

According to the Head of Bashkortostan OFAS Russia, Zulfira Akbasheva, however, state budget subsidies do not always help agrarians to achieve the desired effect; in particular, academic community support is necessary.

“Subsidies are frequently granted with violations of the antimonopoly law; typically, changing normative legal acts by the executive bodies of the subjects of the Russian Federation in the part of the criteria for selecting agricultural producers, conditions, and violating the established rules for granting subsidies by the bodies authorized to regulate agriculture in the regions”, commented Irina Epifanova. “For example, at the end of May, for instance, FAS will investigate a case against the Government of the Ivanovo region and the Department of Agriculture and Food Products.

To stabilize prices on agrofood markets and maintain revenues of agricultural producers, such mechanism is used as state purchasing and commodity interventions enabling price stability on the domestic market of basic agricultural products.

In conclusion of the second day of the workshop, Deputy Head of Voronezh OFAS, Vitaly Popov, discussed the situation on agrofood markets in the region. For instance, in 2013 the Voronezh region increased production of eggs, meat, milk, sunflower, cereal crops and grain legume crops in comparison with 2012. Production on the sugar beet market decreased considerably: from 6,167,300 tons to 4,455,700 tons due to short-term contracts, ill-timed start of the contract campaign, as well as remoteness of farms from processing enterprises.

The latter problem is also typical for the milk market. The State assists agrarians in overcoming it; for instance, providing cooling equipment in Bashkortostan.