Ministry of Agriculture wants to adjust fertilizer prices

According to the Ministry of Agriculture, the issue of the availability of fertilizers for Russian farmers can be resolved by fixing prices or state subsidies.

At the same time, at a meeting of the Ministry of Industry and Trade, which was assembled on the initiative of farmers dissatisfied with the rise in the price of fertilizers, a proposal was made to introduce long-term contacts, the price of which will be calculated on the basis of stock exchange quotations.

This initiative was also supported by the FAS.

The main idea of ​​the Ministry of Industry and Trade and the Federal Antimonopoly Service is that there is no need to regulate fertilizer prices, they should remain market prices.

Long-term wholesale contracts can be a way to maintain acceptable prices. Including using exchanges.

For example, now many agricultural producers have begun to more actively use the St. Petersburg International Commodity and Raw Materials Exchange.

In 2021, farmers bought 2.8 million tons of fertilizers from it, which is 17% more than in the previous season.

At the same time, the exchange is not convenient for everyone.

It is difficult for a small business to enter it: you need to register, choose a broker, pay a commission.

In addition, a significant part of potential buyers do not have their own storage areas for fertilizers purchased for future use.

However, suppliers are ready to help with this by ensuring that purchased lots are stored in their own warehouses until the season begins.

Currently, up to 70% of farmers buy fertilizers in advance, in the off-season. According to experts, this removes, at least, the issues of excitement and shortage of fertilizers.

But, as Andrei Neduzhko, general director of the Steppe agricultural holding, noted, such purchases still do not save from the rise in prices.

And the increase in the price of fertilizers this season amounted to 40%.

Will non-market regulation be introduced?


The Ministry of Agriculture proposes to introduce one of the following measures:

— Fixing the marginal prices for fertilizers at a certain level.

— Government subsidies that would allow producers to offset a portion of their costs.

All these mechanisms are quite complex and ambiguous, so the possibility of their implementation is still being considered.

But the farmers themselves propose to resolve the issue differently: to abolish export duties on the sale of products.

In this case, they will have the opportunity to make a profit themselves and to include in the price the cost of fertilizers.

But whether the government will agree to this — this question is still in doubt.