MOSCOW (B)--Russia's Agriculture Ministry sees an increase in domestic grain production as a priority, Deputy Agriculture Minister Nikolai Dolgushin said Nov. 14. He said the state should return to the market as the major operator and a special government agency should be created for holding grain interventions on the market.

"The grain market is one of the major ones and it influences the situation in other markets. Our goal is to stabilize the production, raise it to the level sufficient for domestic requirements and start exporting grain in the future," Dolgushin told the international Grain Industry in the 21st Century conference in Moscow.

He said apart from introduction of modern technologies to increase the yield and supply of adequate equipment to farmers, the state should become the major operator on the market itself.

"Currently there is no common grain market in Russia and commodity exchanges are underdeveloped--only 4% of grain are traded there. Another problem are the seasonal price fluctuations--prices are falling in autumn and rise in spring. Both problems will be solved via state intervention on the market," Dolgushin said.

He said all the government stakes in grain elevators should be handed over to a new agency, which would hold the interventions via commodity exchanges. This will give a strong impetus to the development of exchanges," Dolgushin said.

He said the government planned to spend 5 billion rubles for annual grain purchases on the market for the intervention stocks.

Dolgushin said the government would also promote the development of the warehouse receipts system and create conditions for grain futures deals.

Apart from increasing the average yield, the ministry also wants to increase the planted area to 52 million hectares by 2005 from 46 million this year, Dolgushin said.

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