Russia tries to counter weak macro-management with agriculture

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MOSCOW, Dec 27, 2007 (AFP) – President Vladimir Putin on Thursday urged government ministers to fight inflation by making Russia’s agriculture sector competitive against foreign food imports. The bank’s earlier 2008 inflation target was between six and seven percent. “One of the key tasks for 2008 is to fight inflation. Unfortunately we have not been successful at keeping inflation within the parameters we set,” Putin told an end-of-year government meeting in Moscow.

“It’s not just the fault of the finance ministry … it’s also because of external economic factors. Food prices will remain high,” he said.

“We have to develop our own agriculture…. Our food products must be higher quality and cheaper” than foreign imports, he added.

Russia’s agriculture sector collapsed after the fall of the Soviet Union and has continued to struggle since then. Russia imports food worth around five billion euros every year, officials said.

Inflation has risen sharply in 2007 and could reach 12 percent by the end of the year, far higher than an eight percent target set by the government and many Russians have complained about rising food prices in particular.

The deputy head of the Ce