BELARUS NEWS AND ANALYSIS

DATE:

21/08/2009

Belarus - PM urges to create mechanism of creating integrated companies in agriculture

There is a need to develop a clear mechanism of setting up integrated organisations in agriculture, Prime Minister of Belarus Sergei Sidorsky said during a session at the Ministry of Agriculture and Food in Minsk on 12 August. The session focused on the ways of setting up integrated companies in agriculture.

The head of state instructed to continue the practice of setting up such companies in agriculture by involving dairy, meat and brewery producers, Sergei Sidorsky remarked. Certain prerequisites have been created for that. "Yet, to facilitate exports we need to create a clear mechanism of setting up such organisations. These can be companies, corporations, possibly holding companies," the Prime Minister said. These organisations should be fully independent in their current operations and strategic policies; they should operate on a self-financing basis.

"These should be well-performing commercial organisations," Sergei Sidorsky stressed. When setting up such organisations we need to use the experience of international companies, to involve domestic and foreign producers and investors who can bring in capital, latest technologies and ensure good domestic and foreign sales.

The process of creating integrated companies on the basis of agricultural processing enterprises has been underway in Belarus since 2000. A number of such organisations have been set up already. These are the Dzerzhinsky and Snov agricultural companies, Zarya farm and Grodnokhlebprodukt. Such organisations produce, process and sell products. Financial and economic performance of the companies proves that they are well adjusted to the market economy. They post an annual increase of production of no less than 10-15%. Profitability of some companies reaches more than 30%.

Sergei Sidorsky noted that the government has already considered the issues relating to the creation of such companies. Further study of the issue needs deeper analysis and certain steps. That is why the government decided to discuss it once again.

The Prime Minister also underlined the necessity of creating integrated companies at the Belgospischeprom concern.

The setting up of new integrated organizations in the agricultural industry should meet the schedule, Minister of Agriculture and Food of Belarus Semyon Shapiro told.

Some 41 integrated organizations are expected to be set up by the end of this year. However, the implementation of these projects is lagging behind the schedule. The minister suggested putting deputy chairmen of the oblast executive committees who supervise the agricultural industry in charge of these projects.

Semyon Shapiro also proposed to identify 50 new enterprises that would be turned into integrated organizations.

Taking into consideration the goal to make the Belarusian agricultural industry more competitive, it is critical that these integrated organizations be efficient and effective. The new organizations will make it possible to achieve a complete integration chain that will work according to the principle "production of agricultural goods, its processing, and its selling".

Source:

http://www.isria.com/pages/20_August_2009_87.php

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