Russian farmers have asked the state for 40bn roubles ($1.3bn) in loans to fight the country’s worst drought in more than a century.
Fourteen Russian regions, covering some 15 per cent of the country, have declared a state of emergency because of the unusually high temperatures, which have soared to 40 degrees celcius in some areas. Eleven of the drought-affected regions have seen more than half their sown land destroyed.
“This is a major problem,” Dmitry Medvedev, the president, told ministers and journalists on Tuesday. “Now we must focus on saving at least part of the planted crop.”
The Kremlin has been slow to address the month-long drought, but rushed to action at the end of last week after regional newspaper reports ignited concerns that Russia, the world’s fourth biggest grain exporter, would soon be facing a rise in bread prices.
The drought has so far affected more than 9m hectares of land and according to Russia’s Grain Union is the country’s worst in 130 years.
Vladimir Putin, the prime minister, announced on Monday that the state would offer loans and subsidies to drought-stricken farmers, with loans first given to Russian regions where insurance policies are actively taken out for crops. He demanded that the finance ministry “cut short any [insurers’] attempts to make a fortune off the drought”.
Over the past few years both the Russian government and foreign investors have pumped billions of dollars into Russia’s agricultural industry after it struggled to make the transition from collective to private farms following the collapse of the Soviet Union.
Less than 20 per cent of sown land in Russia is insured, as farmers claim it is very hard to secure payment from insurance companies without taking them to local courts, a lengthy and cumbersome process.
Elena Skrynnik, Russia’s agricultural minister, told Mr Medvedev on Tuesday that she had handed over to the finance ministry farmers’ applications for 40bn roubles in aid and that the money would reach them through the regional authorities.
“I think that this work will go forward and will be what helps regions support their agricultural producers,” she said.
Viktor Zubkov, first deputy prime minister, on Monday said Russia would not have to import grain this year as it had 24m tonnes in reserves and that it would continue exporting as well.
The Kremlin has been positioning Russia to become one of the world’s biggest exporters, announcing last year that it planned to double its grain exports by 2025 to 40m-50m tonnes of grain a year.