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Russian Government Frees Grain Exporters from Taxes - ASHARQ AL-AWSAT English Archive 2005 -2017
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Moscow-The Russian government decided to meet the demands of the National Union of Grain Producers regarding the abolition of fees on wheat exports.

Russian Prime Minister Dmitry Medvedev announced Friday the government had decided to waive the duty on wheat exports for two years.

“We have decided to cancel the export duty on wheat for the next two years. As a result, the domestic grain market will receive an additional incentive for growth,” Medvedev said during a meeting on agricultural development in Russia.

Russia may harvest up to 170million tons of grain under certain conditions by 2030, he expected, adding that the export capacities might increase up to 64 million tons; thus, gaining extra income in this sector of around $11 billion annually.

Deputy Agriculture Minister Dzhambulat Khatuov said that abolishing the duty would allow Russia to increase wheat exports by 5 million tons to 30 million tons a year.

The Russian National Union of Grain Producers submitted a request for the Russian government in July to reconsider the abolition of fees on grain exports, explaining in the letter that the losses incurred by the sector as a result of paying fees during one annual growing season ranged between 30 to 40 billion Russian rubles.

The Union expects the volume of production this year to reach 112 million tons, including 65 million tons of wheat.

Based on that, the Union confirmed in its letter to the government “the lack of theoretical possibility that the domestic market will suffer from a deficit in the grain reserves for domestic consumption, and under these circumstances,” the letter said, “the containment of the collapse of prices in the domestic market does not seem possible without increasing the volume of exports.”

It is worth mentioning that Russian grain exports have amounted during the growing season 2015/2016 to around 33.9 million tons, including 24.6 million tons of wheat, 4.23 tons of barley and 4.71 million tons of corn.

Owing to a large harvest, the country’s export potential amounts to 30 million tons of wheat in the 2016/2017 agricultural year, which is an absolute record for the last few years.

With this amount of grains exported, Russia has become the world’s largest wheat exporter.