May 18, 2018 / 2:32 PM / 3 months ago

Proponent of 'grain OPEC' returns to Russian government

MOSCOW (Reuters) - A veteran of the Russian farm sector who once lobbied for the creation of a “grain OPEC” was appointed deputy prime minister in charge of agriculture on Friday.

FILE PHOTO: Russian Prime Minister Dmitry Medvedev meets with Voronezh Regional Governor Alexei Gordeyev in Voronezh, Russia February 9, 2015. Sputnik/Alexander Astafyev/Pool via REUTERS

Alexei Gordeyev, 63, was agriculture minister for 10 years until 2009, when he became head of one of Russia’s regions and then a representative of President Vladimir Putin in the country’s central federal district.

While he was away from the sector, Russia cemented its position as a top three grain-exporting country and started routinely harvesting a crop of more than 100 million tonnes. It produced a record harvest of 135 million tonnes in 2017 and prospects for this year are also bright.

The Agriculture Ministry was much more powerful under Gordeyev’s leadership, a Russian grain trader said.

“He had everything under control at the ministry. Now decisions are made at government headquarters,” the trader said.

With Gordeyev’s lobbying, bad loans accumulated by Russian farmers in the chaotic 1990s were restructured and partially written off in the early 2000s. This allowed large investors to start farm businesses and eventually turned Russia into a global grain exporter.

Putin also appointed Dmitry Patrushev, a 40-year-old son of Russian Security Council Secretary Nikolai Patrushev, as agriculture minister on Friday.

Dmitry Patrushev was previously the chairman of Russian Agricultural Bank, which Gordeyev created in the early 2000s.

Russia is one of the world’s largest oil producers outside the Organization of the Petroleum Exporting Countries. While agriculture minister, Gordeyev periodically lobbied for the creation of a grain-based equivalent with Russia’s neighbors.

But the idea of a grains cartel among Black Sea producers, which include Russia, Ukraine and Kazakhstan, never gained momentum.

It is unlikely to be realized now because Russia has joined the World Trade Organization and relations between Moscow and Kiev have deteriorated, said Andrey Sizov, head of the SovEcon agriculture consultancy. Russia annexed the Crimean peninsula from Ukraine in 2014.

“The main question for exporters with Gordeyev’s return is the future of the Russian export duty on grain, which is at zero but has not been canceled (as an instrument) up to now,” Sizov said.

“His predecessor (in government), Arkady Dvorkovich, considered this duty as a good invention. Maybe Gordeyev will have less attachment to it and will cancel it,” he added.

Reporting by Polina Devitt; Editing by Dale Hudson

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