Russia joins WTO and funds for agriculture to meet challenge

Russia's upper house of parliament, the Federation Council, approved a protocol for the country's accession to the World Trade Organization (WTO) Wednesday, according to local reports. The lower house, or State Duma, approved the protocol on July 10. The law now only requires the president's signature, 30 days after which Russia will officially become a WTO member.

President Vladimir Putin said some Russian producers may suffer in the short-term from Russia’s entry in the WTO but the Russian government is looking for tools to protect key sectors of the economy, such as agriculture, automotive industry, and textile industry.

With the country's farmers amongst the most exposed to the challenges that WTO membership will bring, the Russian government approved a RUB2.28 trillion ($70bn) agricultural development program for 2013-2020 on July 13.

Despite its impressive size, the approved package is actually smaller than had originally been suggested. It will see support to the sector from the federal budget reduced by 39% to RUB1.5 trillion, whilst regional governments will now provide RUB780bn, a 42% drop from an earlier suggestions of RUB1.35 trillion. According to Agriculture Minister Nikolai Fyodorov, his ministry will provide RUB1.423 trillion, while the Federal Service for Veterinary and Phytosanitary Oversight will put RUB85.8bn on the table.

As a result of the program, the government expects to boost agricultural production by 19.6% in the next seven years. "Pursuant to the Agriculture Ministry's calculations, the average annual rate of growth of agricultural output may reach 2.5% or more thanks to the programme, and by 2020 the industry should reach the key figures listed in the food safety doctrine," Prime Minister Dmitry Medvedev said.