A working meeting of the Governor Alexey Ostrovskiy with the First Deputy Minister of Agriculture of the Russian Federation Yevgeny Gromyko

Today the Head of the region Alexey Ostrovskiy had a meeting with the First Deputy Minister of Agriculture of the Russian Federation Yevgeny Gromyko, during which they discussed the prospects of flax complex development in the Smolensk region.

During the meeting Alexey Ostrovskiy and Yevgeny Gromyko discussed in detail the issues of cluster formation for growing and processing flax on the territory of the Smolensk region, and possible mechanisms of state support for the cluster as part of the flax complex of the Russian Federation. In addition, the issue of increasing up to 40% the level of co-financing the costs of agricultural producers from the federal budget to the budgets of subjects of the Russian Federation to support economically important regional programs for agricultural development, including flax complex.

It should be reminded that in the Vyazma district there is the only flax cluster in the CFD which is complexly engaged in growing and processing "northern silk", as well as manufacturing Russian-Belgian machinery for harvesting this spinning culture. The cluster is based on closed flax processing cycle with the release of finished products made of linen on the “field – counter” principle. It is in the Smolensk region where 40% of flax crops are grown and about 50% of the total flax fiber is produced. Last year more than 1,200 tons of yarn and 280 thousand meters of canvas were produced. It is planned to increase the cluster share in flax production through increasing the number of players involved and attracting new investors in the primary and deep processing of flax.

As a result of the discussion, it was decided to establish a Working Group at the Plant Growing, Chemicalization and Protection Department of the Agriculture Ministry of Russia, which will work out the measures to support flax growing and processing clusters. The working group will include representatives of the Smolensk region.

Another equally important issue which was discussed is an increase of co-financing from the federal budget. This year, according to the decision of the Russian Government, subsidies from the federal budget to the budgets of the Russian Federation subjects to support economically important regional programs for agricultural development, including growing flax, are distributed and provided with a compensation at the expense of subsidies from the federal budget up to 20% of the costs that agricultural producers incur through organizing production and processing of agricultural produce.

Such increased co-financing will allow to make growing flax (flax fiber production) break-even, to reduce the financial burden on businesses and organizations engaged in growing and processing flax, to attract new investors in this sector, to ensure a high growth rate of flax fiber productivity and high sales of flax.

As a result it was decided to work out together with the Plant Growing, Chemicalization and Protection Department of the Agriculture Ministry of Russia a set of measures to increase the level of co-financing from the federal budget the costs that agricultural producers incur through organizing production and processing of agricultural produce expenditures of agricultural producers on the organization of production and processing of agricultural flax produce.