The Minister resigned. Long live the Minister?
According to most participants, experts and analysts of the Russian agricultural market, the main event of last week - a change of the Head of the Ministry of Agriculture of the Russian Federation – was a quite predictable one. So, on April 22, Vladimir Putin, President of Russia, signed a decree releasing Nikolai Fedorov from his duties as Minister of Agriculture following his appointment to a new post - the Presidential Adviser. Alexander Tkachev, former governor of Krasnodar Krai, was appointed to the post of the Minister. And we will try to analyze the logic of such decision and its possible consequences for the industry.
Resignation, which was forecasted
In fact, since his very appointment as the Head of the Ministry of Agriculture (May 21, 2012), the figure of Nikolai Fedorov was considered as a temporary official only, who seemed more preferential compared with his predecessor Elena Skrynnik, but also clearly lost to such authority as the Minister Alexei Gordeyev. In May 2012, many market participants were surprised with appointment of the former Minister of Justice of Russia, President of the Chuvash Republic, and Head of the Council of the Federation Committee on Constitutional Legislation, Legal and Judicial Affairs and Civil Society, to the post of the "Chief of the Russian agriculture". The main argument in favor of the candidacy of N.Fedorov was that "while heading the agrarian republic, which is Chuvashia, he showed his best side, and to date he is quite able to organize the work of agriculture in the whole Russia".
According to many market participants, the candidacy of Yevgeny Savchenko, Head of administration of Belgorod oblast, looked more preferably. As a reminder, in 2009 Alexei Gordeyev planned Y.Savchenko as his successor to the position of the Minister. But the governor of Belgorod oblast refused all offers to head the Ministry of Agriculture. By the way, according to some reports, he refused to take the position in 2015, although many sources expected him replacing N.Fedorov.
As for almost three-year work of N.Fedorov as the Minister of Agriculture, most experts agree that the former Minister failed to become a leader of the strategic sector of the Russian economy, and provide its further effective development. Perhaps, N.Fedorov knew about the problem, and according to some sources, he tried to give his resignation in January 2014. However, his appeal was not satisfied, and the next share of insider data on resignation of the Minister (but not on his own request) appeared a year later, in January 2015.
It should be recalled that N.Fedorov was one of the main supporters of the idea of import replacement measures, which appeared after imposition of the food ban against the Western countries by Russia in July 2014. But optimism of the Minister looked significantly exaggerated, and many promises - hard-to-move. In addition, the Minister excessively focused on certain sectors of agriculture (animal farming, vegetable growing), while development of the situation required operative and specific measures for the entire agro-industrial complex. The sharp devaluation of the ruble and significant increasing of the key interest rate actually dropped the situation on the grain and oilseed markets, and the actions of the Ministry in such situation did not seem adequate to the situation.
Imposition of the customs duties on wheat exports, very long periods for decision-making to improve the situation with grain purchasing interventions, failure of provision of available credit resources for agrarians, etc. - all these factors caused the slashing criticism from both the business and the country's top leadership. For example, at the end of November Valentina Matviyenko, Chairman of the Federation Council, said that the Minister was personally responsible for consequences of the situation development.
Generally, during six recent months, discrepancies between sounding promises and particular actions of the Minister were excessively noticeable. And many industry organizations of the Russian agricultural market stated that any attempts to solve the existing problems through the Minister of Agriculture were wasting of time in fact, and preferred communicating with Arkady Dvorkovich, Vice Prime Minister.
On March 30, the Minister faced another portion of critics from the Head of State. Vladimir Putin expressed his dissatisfaction with the fact that the current indicators on spring field works and lending of the agro-industrial complex significantly diverge from the data provided by N.Fedorov. Finally, on April 16 the President of the Russian Federation confirmed the fact of stagnation of the domestic dairy industry, which was under special control of N.Fedorov.
Such development of situation in almost exploded the media scene in the beginning of last week - on April 21 almost all leading Russian news agencies reported about resignation of the Minister of Agriculture. Nevertheless, the information was not confirmed on that day. Dmitry Peskov, Press Secretary of Russian President, refused to comment on the issue, and Natalya Timakova, press attaché to the Russian Prime Minister, said that her department has no documents proving the resignation of N.Fedorov. On April 22, the information space was flooded with possible candidates for the ministerial chair, including Yevgeny Savchenko, Head of Belgorod oblast, Valery Gaevsky, Deputy head of the Ministry of Agriculture, and Sergey Mitin, Governor of Novgorod oblast.
Dmitry Yuriev, current Deputy Minister, was considered as another candidate, according to various sources. The candidate seemed very real to replace N.Fedorov in the current situation - D.Yurev was acknowledged with most of the available achievements of the Ministry of Agriculture. In addition, D.Yurev was the main "communicator" in the difficult relations between N.Fedorov and A.Dvorkovich, as well as the Ministry and representatives of the agricultural market.
But then another candidate appeared - Alexander Tkachev, Governor of Krasnodar Krai. Although his press-service refused to officially confirm the possibility of moving the head of the largest agricultural region to work in Moscow, the insider information indicated that the negotiations on appointment of A.Tkachev to the position were held since April 8, and the decision on his appointment was actually taken.
Officially, it was announced in the morning on April 23, after two working meetings of the President of the Russian Federation. After the first meeting with N.Fedorov, the President signed an order releasing N.Fedorov from his duties as the Minister of Agriculture, and appointed him to the post of Presidential Adviser. The Minister was simply offered (or asked) to move to another job without public announcing of any complaints. As the result, the President of Russia received one more advisor, and the former Minister of Agriculture became the first one of the government composition approved in 2012, who left his post.
But within the following hour Russia came to know the name of the new Minister of Agriculture, and Alexander Tkachev took the post. According to V.Putin, the new Minister has to deal with development of such important sector of the Russian economy, as agriculture, and solve the major problems of the industry, especially the import replacement measures. Russia needs its own commodities, and it should be done quickly in order to reduce the intensity of the food market, to lower the prices, etc.
As for the new appointment of N.Fedorov, it looks as simple as possible: in fact, he will do the same work as before, but in more comfortable environment. Advisory functions do not imply any personal responsibility for adoption and realization of decisions, they provide the right to make mistakes, and therefore the candidacy of former Minister seems almost perfect.
But it is much harder to analyze the possible consequences of coming of A.Tkachev to the ministerial position for the Russian agricultural sector. On the one hand, nearly 15 years of management of one of the major agricultural regions of Russia indicate the presence of some experience. And the agro-industrial complex is rather significant theme for the new Minister - the business interests of the former Governor of Krasnodar Krai include one of the largest Russian agro-holdings Agrocomplex, which to date operates at least 200 thsd ha of agricultural lands, according to various estimations, and in the future the index will reach 450 thsd ha. Although, the list of shareholders of Agrocomplex is not officially disclosed, but the market participants associate its owners with members of the family of A.Tkachev.
However, the fact was not called as the determining factor in appointment of the new Minister. Alexander Tkachev should be able to form a rigid vertical of power in the Russian agro-industrial complex. The experience of successful management of the agricultural sector in the region should allow to the head of the Ministry of Agriculture to ensure not only taking of the necessary decisions, but also its effective realization.
As a result, it is likely that the Minister will take his team to Moscow, as managers of N.Fedorov are unlikely to feel comfortable in the new realities. And the principles of formation of a new team will allow more clearly understanding the methods and management style of the new Minister.
At the same time, there are some concerns about the level which Alexander Tkachev knows the art of strategic thinking at the national level, and how quickly he will be able to position himself as the head of agro-industrial complex of the whole country, but not a single region.
A.Dvorkovich, Deputy Prime Minister, who represented the new Minister of Agriculture to the ministerial staff, focused a whole series of priorities for A.Tkachev - "improving the material and technical base of the industry, including at the expense of new crediting instruments, adoption of new legislation in the veterinary, improving of regulation of the grain market, need for more closely working with regional authorities, etc.”.
And the first challenge for the new minister will be the success of the spring planting campaign and the associated problems, including the availability of financial and material resources. Also, in the shortest time it will be necessary to solve the situation on the grain market expecting for the new crop coming, to solve problems in animal husbandry, which became one of the stumbling blocks for predecessor of A.Tkachev, etc. How A.Tkachev will manage to solve the issues? In the coming months we will receive some answers to the question.
Alexander Pryadko, APK-Inform Agency
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