Regional grain unions

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Regional grain unions
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In 2019, the Russian Grain Union celebrates a significant event in its history - 25 years since its foundation.

The RGU has turned into a professional and authoritative association of the grain market participants, effectively defending the interests of the industry, contributing to the state agricultural formation and food policy and the development of the Russian economy as a whole.

The starting point of the history of the Russian Grain Union was August 18, 1994, when the Constituent Assembly decided to create a non-profit organization Grain Union, which was registered on November 23 of the same year. The founders were seven organizations: OJSC “Federal Contracting Corporation Roskhleboprodukt”, OJSC Mosoblhleboprodukt Corporation, OJSC ATO OGO, OJSC Ryazan Grain Company, Moscow Exchange MTB, CJSC Agrin and JSC Exportkhleb. Also a great influence on the Grain Union formation had Aleksei Gordeev, Viktor Semenov, Vyacheslav Butkovsky and Igor Chekmezov.

It’s a pleasure to name people who stood at the helm during a difficult period of development, shouldering the entire burden of responsibility for the activities of the Grain Union in developing and improving the Russian grain market and in creating favorable conditions for the grain business. These are the former president of the Grain Union, Alexander Kirillin, who headed the organization in the period 1994-1995, and ex-president Alexander Yukish, who was president in the period 1995-2002. Due to their personal qualities, high professionalism and their dedication, the Grain Union rose to its feet, became an authoritative public organization, so necessary today for the unification of all grain market participants.

Since October 2002 the president of the Russian Grain Union has been Arkady Zlochevsky. Also, he has been the permanent chairman of the RGU board since the founding of the Union.

The priority task for the created Union was the development of the work program of the Union and the Concept for the development of the Russian grain market. In those difficult years, the grain industry faced many problems: there were restrictions on the grain export from regions, administrative barriers did not allow private business to develop normally, the system of taxation of agricultural production required urgent and serious changes, the lack of information about the current market and analytics about its development prospects had a negative impact on the market situation. Inadequate measures of state regulation of the grain market, in particular, interventions of imported humanitarian aid and the existence of various programs for the introduction of foreign products into the market, have killed off incentives for the production of domestic agricultural products. The concept became the basis for the work of the Union until the beginning of the 2000s: by 2002, largely due to the work of the RGU, the problems described above were partially or fully solved.

The second priority was the expansion of the membership base of the Union, the involvement of new organizations in its activities. In 1995, a regional development project was launched: official representatives of the Russian Grain Union appeared in a number of regions of the country.

Currently, the RGU has almost 300 organizations of the agro-industrial sector. Over 50% of the members of the Union are grain producers and enterprises for the storage and processing of grain; grain market operators, including infrastructure organizations, make up 25% of the total number of members of the Russian Grain Union. The members of the Union, taking into account regional grain unions, provide about 20% of the production of Russian grain, more than half of the production of flour and animal feed, two-thirds of the market turnover of grain and over 90% of exports of grain and its processed products.

The most important achievement of the Russian Grain Union of that time was the creation of a full-fledged system of informing the RGU members, as well as outside organizations, about the current state and prospects for the development of the grain market. The Union began to provide information materials to its members as early as 1995, but there was still no clear information system. In 1998, the Herald and the Bulletin of the Union began to appear on a regular basis, reference books on grain trading and numerous books were published.

In October 2000, a pilot project was launched for the implementation of warehouse certificates for grain, which after 2003 began to turn into a developed system of the RGU Voluntary Certification. As a result, currently, two voluntary certification systems and the ISO Quality Management System are being actively used.

To date, the Russian Grain Union has certified 112 enterprises in 27 regions of the Russian Federation. The total grain capacity of these enterprises is more than 10 million tons, incl. elevator capacity - 6.8 million tons.

The result of the Unions work at that time was the abolition of bans on the grain export from the regions and the cessation of humanitarian supplies and interventions of foreign products to the Russian market by 2001. Also, according to the appeals of the Union, the preferential VAT rate for agricultural products was kept, the regime of customs and tariff regulation of import and export of agricultural products changed.

Much work has been done by the Russian Grain Union regarding the formation of Russia's position on accession to the World Trade Organization. At the same time, the Union, being an authoritative organization with serious resources, often carried out work that was not peculiar to it, at first glance. So, in 2001, the RGU submitted an application to the Commission on Protective Measures and the Customs and Tariff Policy under the Government of the Russian Federation on the quotas for importing imported meat products into Russia. It is worth noting that the implementation of this proposal was extremely difficult.

According to the results of the great work done in 2001, the second edition of the Concept for the Development of the Russian Grain Market for the Medium Term was adopted. It marked the transition of the Russian grain industry from the phase of survival in the market to the phase of sustainable growth.

The main task of the new leadership at that time, in 2003, was to streamline the work of the Union, give it a deep systemic character and establish the closest possible interaction with government bodies. At the same time, the very principle on which the work of the Union was based has changed: Prevention is cheaper than treatment. The RGU from overcoming emerging problems moved to a policy of preventing them. This led to an increase in the efficiency of work and, accordingly, the expenditure of the Unions funds. An example clearly illustrating this thesis in action is the work of the Union to curb attempts at quantitative and tariff restrictions on grain exports. The Union always believed that for the full development of grain production in Russia, it is necessary to create broad channels for marketing agricultural products, including abroad.

The basis of the Unions activities was the development of measures to support the domestic agricultural producer, and the manufacturer of not only grain, but also other types of agricultural products, in particular, oilseeds. Expanding budget support for agricultural producers and subsidizing interest rates on loans attracted by peasants, developing an agricultural equipment leasing system and adding a large number of new items to the list of equipment provided under leasing programs, introducing import customs rates for rice and canceling import customs duties on soybean meal, soybeans, corn and fish meal, the introduction of discounts on rail transportation of grain and flour - all this is only part of what was done by the Union from 2003 to 2008.

Also, an important focus of the RGU was the improvement of the regulatory framework of the grain market. The systematic work began on the preparation of draft laws, draft resolutions and orders, amendments to already existing documents. The Union was actively involved in the development of technical regulations: 8 such documents were prepared. The RGU made a tangible contribution to the development of the strategy for the development of the agro-industrial complex, which then became the basis of the Priority National Project Development of the Agro-Industrial Complex, the State Program for the Development of Agriculture and Regulation of Agricultural Products, Raw Materials and Food for 2008-2012 and 2013-2020.

In 2008-2012, the Russian Grain Union continued to work on the development of technical regulations. In particular, On the safety of grain, On the safety of feed and feed additives, On the requirements for the safety of flour and related products, On the requirements for the safety of cereals and related products, On the requirements for biological safety and the safety of genetic engineering modified (transgenic) plants ".

A significant moment for the removal of the remaining administrative barriers to the circulation of grain in 2011 was the repeal from August 1, 2011, of the Federal Law No. 183 On State Supervision and Control over the Quality of Grain and its Processing Products. In the existing form No. 183-FZ, it did not provide for the legal regulation of modern relations in the grain market, contained requirements establishing technical and administrative barriers for the subjects of the industry, the removal of which was consistently sought by the RGU.

Work was carried out with federal authorities to reduce the list of documents on the safety of grain during its rail transportation, providing for the issuance of a single certificate for the entire shipment.

Other achievements of the Russian Grain Union of that period were also a reduction in export duties on soybeans and the establishment of exceptional tariffs for the transportation of grain from Siberia and from the South to regions affected by drought in 2010.

As part of the implementation of the State Program for the Development of Agriculture and Regulation of Agricultural Products, Raw Materials and Food Markets for 2013–2020, the Union has consistently advocated increasing government support and credit, unrelated support for agricultural producers, and simplifying and increasing the transparency of subsidy distribution.

As a result of these appeals, additional funds were allocated annually for subsidizing loans, the list of recipients of state support was expanded at the expense of infrastructure organizations, processing plants, the list of machines and equipment for which preferential terms of purchase were provided, a single subsidy was introduced, which made it possible to remove restrictions on the use of support funds which became more determined by the needs of agricultural producers, the initiative to expand the rights of the Ministry of Agriculture of Russia on the redistribution of unused means of subsidies for loans.

In October 2015, at the initiative of the Russian Grain Union, President of Russia V. Putin has instructed to develop a long-term strategy for the development of the grain complex, in the preparation of which the RGU actively participated. Currently, a long-term strategy for the development of the grain complex of the Russian Federation until 2025 and up to 2030 is developed and is located in the Government of Russia. A significant amount of work was carried out in terms of the adjustment of the Strategy for the Development of the Food and Processing Industry of the Russian Federation for the Period up to 2020, the Strategy for Improving the Quality of Food Products in the Russian Federation until 2030, the Strategy for the Development of Agricultural Engineering of Russia for the Period up to 2030, the project departmental target program Development of deep processing of grain for the period 2014-2020, the Priority Project of the Government of the Russian Federation Export of Agricultural Products, approved by the protocol of the meeting of the Presidium of the Council under the President of the Russian Federation on strategic development and priority projects of November 30, 2016 No. 11.

The RGU is constantly working with JSC Russian Railways on the issues of optimization and rationalization of tariffs for transportation. It should be noted that the partnership with carriers and Russian Railways gives certain results: problems with the presence of cars and long periods for filing applications are gone, tensions in matters of sanctions have been largely removed, and if not, the Union takes the necessary measures their resolution in the interests of shippers.

In 2016, Russian Railways, at the initiative of the Union, introduced a reduction factor of 0.889 to the current tariffs for export transportation of grain cargo in cars, with a transportation distance of up to 600 kilometers inclusive. Although it was canceled from 2017, the work on its establishment continues. Russian Railways also supported the initiative of the Union on the removal of the norm of mandatory tachographs for all types of agricultural equipment used for the needs of ensuring production activities.

The Russian Grain Union has consistently advocated the rejection of customs and tariff restrictions on the export of agricultural products and after the introduction of duties on wheat exports since July 1, 2015. It took an unambiguous position about the inexpediency and ineffectiveness of such a regulatory measure. According to the results of active work with state authorities, the Russian government nullified the export duty on wheat from September 23, 2016, to July 1, 2018, while officials said that the fundamental position is to refuse to impose such duties in the future.

At the initiative of the Russian Grain Union, the process of creating the self-regulatory organization "Union of Grain Guardians" is underway. Its mission is to protect the interests of a wide range of participants in the agrarian market (custodians, depositors, consumers of grain and oilseeds), increase the availability of loans and the investment attractiveness of the industry, increase the competitiveness of Russian grain and its products, and create the necessary legal, economic and other conditions for the most effective activity and interaction of participants in the agri-food market.

In 2013, a National Feed Union was established on the basis of the RGU. As part of a single program, the NFU focused on solving the most pressing problems of the industry in the field of technical regulation and other issues related to fodder production, promptly informing market participants about unfair work in the feed market of individual companies, supporting the NFU members in cooperation with government bodies and regulatory organizations.

It has always been important for the Russian Grain Union to held annual conferences for the RGU members and other participants of the grain business. Traditionally, the RGU holds the agrotechnological conference AgroHighTech, the international grain round Grain Market - Yesterday, Today, Tomorrow, the international conference Black Sea Grain and Oilseeds, as well as other business events held abroad. According to the Charter of the Russian Grain Union, the General Meeting of the RGU members is held every 5 years to discuss the situation in the grain market, review the report on the activities of the Union and its development prospects.

In 2009 and 2016, the Russian Grain Union together with the Government of the Russian Federation and the Ministry of Agriculture of Russia participated in the preparation and organization of the I and II World Grain Forum.

Summing up, we can safely say that, largely due to the professional and balanced position of the Russian Grain Union, its members and all players of the grain market avoided the colossal costs associated with making major government decisions, saved money, were able to direct them to development and as a result Russias grain, along with oil, gas and weapons, brightly represented on the world market.

The Russian Grain Union will continue and multiply its many-sided, extremely important and demanded business and society activities for the benefit of Russia's economic prosperity.

Russian Grain Union address:
3a, Malaya Semenovskaya St., building 1, 9th floor, office 2, 3, 4, Moscow, Russia, 107023
Postal address: 2/1, Suvorovskaya St., housing 1, P. O. box 10, Moscow, Russia, 107023
Phone: (495)607-83-79, (495)607-53-44, (499)975-20-50
Fax: (495)607-83-79, (495)607-53-44, (499)975-20-50
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