Today we would like to open up the floor to Mr.Sergei Lisovsky, the Deputy Chairman of the Committee of the Soviet of the Federation for Agrarian and Food Policy. He is well known not only as a pioneer of the advertisement market, but also as an honorable poultry producer, ex head of CJSC MOSSELPROM
— Sergei Fedorovich, the Government budgeted for so many expenses in the next year that it would turn out to have a deficit. How would you comment on this contour? We are hoisted by own petard. Our economy is "import oriented", all is imported by us, except raw-materials. One thing is to invest an earned ruble in the production and keep getting benefits meaning not only profit, but jobs and social policy also. Another way is to spend the way we do. Tomorrow the society will be upset with sops thrown to it by the Government today. The Government lasts but one day, its headache is to solve the problem and what tomorrow's expectations are nobody is interested in. The same occurs to the money of the stabilization fund. Instead of investing in the economy, the Government removes these means and leaves the Russian production with very costly money. It is pure and simple travesty, isn't it? Our credit is the cheapest, 12 percent per annum. How can one develop the production with this money? At the same time we are being told about the fair competition with western goods, where credits to the industry are given for 4-5 percent per annum. When this is the case, subsidies are also there. As for us, nothing has been invested in our economy. Therefore, there is nothing to develop.
— All is a long word.
— At least I can discuss the agrarian sector, it is well known to me. Once I spoke to the owner of a big company producing 80 % of German poultry meat. I asked him why the self cost of meat was so low. It develops that they pay for solar oil less than we do in Russia, because their Government subsidizes its cost. Last year the average cost per 1 liter of solar oil was worth 13.5 rubles for our peasant, whereas their cost was equivalent to 10 rubles. If they decide that the enterprise is required by the Government, they will be supporting it. That's why every tillable hectare is subsidized. For example, at present EC has adopted a program on the development of bio fuel, they have started to grow rape. Activities connected with the rape growing and sale of it are financially supported by the Government, which allocates 400 Euro per hectare.
— Separate enterprises are also planned for the investment. For example, your AIC has been declared as a national project. Besides, an investment fund has been created. There will be a venture fund too. Isn't it enough?
— It's a stretch of imagination — "it would be nice to have a bridge built over the lake with white swans rowing". Suppose we speak about free economic areas. What is the outcome? Look, there is an oil processing plant. What does it mean? It is picking the Government's pocket. Or, as they say, in one of the regions: "let's build a rape processing plant in a special economic zone to make bio fuel." It is also paralogism. Then, it is necessary to declare the state program, like EC. Otherwise somebody would be able to earn from this rape, others not. In that case the state would not get any benefit. Our country is lacking economists. Nobody looks after economics.
— Can you imagine your acting as a minister of economic affairs or finance?
— No problem. As far back as 1998 I wrote an article on the economic policy of the state where I spoke about national projects. Since we have failed to ensure the development of all branches of economy, not to squander money, let's select 4-5 branches and support them. Let's invest all funds and tell others honestly that they will not be looked after. Either survive yourself or follow the way the state needs now. For example, if agriculture is not required by the state, invest in other branches. However, it is necessary to work out a relocation assistance program for the rural population to make a move to cities. But nobody has ever said like this. National projects have been invented recently. And so many years were lost!
— Let's stop referring to the past and let's look to the future. Are there any sufficient funds to back the agribusiness as a national project?
— Of course, from the Russia's point of view it is funny. We speak about direct investments. It is the interest rate on credit which is financed. We can attract 40 billion rubles for 8 years for the whole enterprise. But only one commercial pig unit costs 1 billion 200 thousand rubles. What are we talking about?
— The Government has decided to put a part of extra money in a Fund for future generations. To this effect the money will be invested in high-yielding financial instruments. How would you assess these plans?
— Personally I believe it is incorrect. If we were rich like Norway, which covers itself completely with social security, then do please, put in.
— But we can't say that our country is poor. Our people are poor.
— There is no rich country with poor people in the world. Instruments which are being used by our Ministry of Finance lead to "thinning down" of the money, it is taken by inflation. And instruments – are they shares of a company of Enron type?
— Speak well of the dead. There are other companies also.
— Deceased notwithstanding. All Western companies are tinhorn except raw materials producing ones perhaps. They are extremely overvalued. Simply nobody is interested in their collapse. (Predictably time will come not in the nearest future, but for generations for which we want to lay down something) and these companies will collapse. The only thing the money should be invested in is the indigenous exploration and exploitation. We shall get such a capital which could be used by next generation. Then invest in roads which are not available in our country. If they sack, put the guilty party behind bars for theft, but only for theft.
— What is your opinion on the draft law for agribusiness? The ministry characterized it as corrupt.
— You know, our Ministry of Finance reminds me of my grandmother. When her money was lying in a stocking, she considered it as money. But if money was kept somewhere it couldn't be called money. Nevertheless, the money she kept in the stocking could never disappear, whereas the Ministry of Finance doesn't give money to us and puts the money into a holed stocking. As for the law, we need it. Similar law is available to Americans, the Ministry of Economic Development and Trade keeps referring to, not to mention France and Germany.
And it is amended constantly, not towards liberalization by the way, but vice versa. These words belong not to me. Last summer a delegation of American Senators paid a visit to Russia including the Chairman of the Agrarian Committee as a member, when they took the floor and said: "Russia wants to join WTO. So, we ask you - don't you have any similar regulation of the market? He admitted that their law was not simpler in terms of market regulation, if anything.
— Are we going to retreat concerning agriculture?
— I have held many business negotiations and can say that if you are not sure in your own standpoint but you try it on wisely you will win. If we had said: "OK, guys, we want to join WTO, but as a matter of principle, we don't need it, it is as an additional order to the chest hardware, we would have already been there. But as soon as they realized we wanted to enter WTO, by hook or by crook, in the sweat of our brow, loosing our privileges, respect to ourselves, (which I feel we don't need), — all started to tear the guts out of us. At present the Ministry of Economic Development is in blind alley. Under these circumstances, if I held business negotiations, I would say to my managers: "Stop working until the counterpart renews this subject". I'm sure that it would be like this in six months. We are grateful there are ministries which have put barriers not to loose all, Ministry of Agriculture, for example.
— Beside money, which is allocated insufficiently according to you, what else should be done by the Government for agribusiness?
— Suppose there is no money with the Government. Then go in for import regulation. Look at poultry meat, for example. 1370 tons of poultry meat was imported into the country 4 years back. At that time our poultry farming started to develop — approximately 80—100 thousand tons annually. Let's then substitute import with domestic production. Poultry farming is an enormous enterprise where for each working person there are 4 persons working in other enterprises. It covers the equipment manufacture, maintenance, sale, packaging, trade, etc. And corn consumption in addition. So, it means there is no need in looking for anybody to sell our good harvest to. The paradox is that sometimes we face a situation when bad harvest and good harvest mean the same – bad because it is bad and good it is again bad, because we are lousy with the harvest. However, if the harvest is good it means that it is good in Europe as well. That's the reason why Europe "puts a veto" on our grain all at once. For example, import duties changed four times during one month in EC two years ago. And how does our Government's mechanism look like? During the whole month we kept witnessing the reaction of all countries to Bird's Flu ideological subversion. There were two ways to keep the situation under control: grants and awards or the outreach to explain all in detail. The finishing touch was the creation of headquarters, that's all.
— Who initiated the subversion?
— Americans, of course.
— What for? They have been selling chicken legs also.
— Chicken legs are the offal. They were supposed to bring them to us free of charge since the recovery would cost more. I don't exaggerate because I spoke to the biggest American producer of poultry meat four years ago. Smiling graciously he responded: "We can give chicken legs to you at the transportation cost, we have to take them out".
— Chicken legs have long since been out of eating. If they give them to us free of charge, where to pile them?
— You are mistaken. Firstly, they are eaten. Secondly, there is much deception. The chicken legs undergo a treatment to become unfrozen and get appearance a la Rus. Thirdly, the most awful thing, the legs are used by processers when making sausage, bratwurst and Frankfurters or Wieners. Do you really think that sausage is made from good Russian poultry meat? Вы что, думаете, колбасу делают из хорошего российского куриного мяса? Not a single factory has bought any Russia chicken. Have you got any idea what minced meat is made from? It is made from the chicken skin and technical trimming residuals and sold thereafter at a higher price, which can increase tenfold.
— Oh, you gave me such a fright! Was it difficult to restructure? Moreover, the agrarian market depends not only on Governmental grants. The common-sense psychology of people living in the country is different from those living in cities.
— The agrarian market has much in common with the mass media market where I worked for 15 years. It is creative as well. Generally speaking, the food market is extremely interesting, one can approve oneself, materialize any idea which may come into being after brainstorming, including technological ideas. Mentality is not so important to the poultry keeping because it is the agrarian and industrial production. But in case of grain it plays a key role, like animal breeding. It is possible to equip the farm in a wonderful way. However, if the staff is not there, you will loose. I don't say that the rural population is greatly different from the citizen. However, the villager is more conservative. But if he trusts you, it is much easier to deal with him. When I started to build my complex I had already realized that the market would need protection. At that time the question was not put in this light. Each owner of the plant kept saying: "Give me a grant, give me feed" And each of them was speaking about his own plant existing as an isolated island. As for me, I was answering that each and every owner had his own interest but there were common tasks assigned to us and we should work together to protect the market. They replied to me that they would resume the discussions after seeing my first chicken running. Since then I have grown a lot of chickens and people understood that a real drudgery has been done owing to which confidence has been placed in me.
— Is it a cause of regret that you said good bye to the television industry and advertisement market? Frankly, glamour is not an attribute of the agrarian business.
— The agrarian business is highly respected in Europe and outside it. I was tired with Cannes, Monaco, Nice when I was running media business. It emerged that agrarian forums were held with the same pomp. A lot of interesting people have been attending these forums, many of them are mighty rich. In fact there is no such a gradation in the world – movie or agrarian business. There is small-scale, medium-size, big and very big business. It is vice verse with Western countries, it is rather difficult to become a farmer. It takes some doing, even in case of your inheritance. In Holland, for example, you should study about twelve years, and work for 5 years, not at your own company.
— You are so severe upon the evaluation of the public persons as if you want to show that your business is not dependant on them.
See, the public persons is like a shuttle trip – come and go. I have always been Mr.Lisovsky and feel I'm vested with the right to voice my standpoint because I've proved that I get thing done on.
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