President of Russia Dmitry Medvedev: Good afternoon ladies and gentlemen, dear friends.
First and foremost, I naturally want to welcome you to St Petersburg and to thank for having come here to discuss one of the most pressing problems we face today.
I am certain that the discussions in the Forum's various venues today will be productive, since solving the problems of the grain market is one of the most important ways of ensuring food security on our planet. And though this may sound immodest, I think it was a good idea to gather everyone together to discuss this subject. When we proposed this idea – it was at the G8 summit last year – no one anticipated that the discussion of food security issues would be taking place during a financial crisis, but that makes what we will be discussing today more important rather than less.
The grain sector of the agricultural industry is a traditional and very significant source of revenue for our country. We intend to strengthen our position in the world grain market, in both the financial and the organisational sense. In recent years Russia really has regained its status as a major grain exporter, and as far as wheat exports are concerned we are in the top three.
Our country is indeed the largest in terms of territory — it has 40 percent of the world's black earth [black soil with a very high percentage of humus]. In total we have about 9 percent of world's reserves of arable land, and of course this gives Russia a unique competitive advantage. We now have the opportunity to put back into operation some 20 million hectares of arable land that have not been used since the radical change in our nation's economic life took place.
However, providing the world with grain is not simply a question of food security. It is also a very complex social issue that affects stability in various regions of the world. In addition to discussing greater international cooperation in this field, which I consider essential, the principal task of the Forum should be a profound analysis of what is currently happening in grain markets. In effect there are three crises – financial, food, and energy – that are unfortunately not only linked to one another but also capable of creating a very nasty synergistic effect.
We are all concerned about the problems of mass hunger and malnutrition. They remain one of the most difficult tests for humanity. It was this threat that occasioned one of our key Millennium Development Goals, reducing hunger in the world. Today there are a total of one billion hungry people in the world. Just think for a minute about what that figure represents! Every sixth person on the planet goes hungry. The civilised world no longer has the right to continue to ignore this situation. To put it bluntly, many of us today simply accept the fact that every five seconds a child dies of hunger on our planet. The world is increasingly concerned with revenues and profits. And that is obviously immoral.
Of course there is another problem that will be given special attention at the Forum, the extremely unstable situation in global food markets, in particular the imbalance between supply and demand which leads to constant price volatility.
Last year's sharp rise in food prices hit the poor hardest, since they spend up to 80 percent of their budget just to feed themselves. It is therefore necessary to reach a common understanding of this situation. We have to develop mechanisms to overcome the imbalance between supply and demand. And we need to ensure that exporters coordinate their programmes in order to maintain reasonable prices for grain markets. In fact, we can consider the formation of a new policy on grain production and international trade in grain.
Generally speaking I'm happy that the forthcoming discussion will not be limited to purely economic issues. I just talked about this and once again I would like to specifically point out that we must speak out loudly and clearly on our position concerning the very serious social problems related to hunger. We need to get the attention of those countries where this problem is still not considered to be important.
I would like to outline our position on some significant topics to be addressed at the Forum. One particularly important issue is the increase in grain prices due to ethanol production, although at this point there are quite different views on this subject. We have certainly discussed this repeatedly with our colleagues. Nevertheless, we favour the production of other biofuels, from inedible sources. These sources are now available, and we think that the international community needs to develop a balanced attitude to these problems by finding a compromise between energy consumption and food security. The development of bio-energy should not lead to a growing shortage of grain for food. This problem is difficult but solvable, especially given the latest research in the field of biofuels.
There is another question. In the various parts of the global grain supply chain – production, storage, processing, transport – a blockage can create problems. We know that the logistical infrastructure, the sea ports or grain elevators are not always sufficient for storing the size of the harvest produced or to ensure its timely delivery to consumers.
I would note here that a number of multinational food companies have introduced new technologies which, unfortunately, are in breach of environmental safety requirements. It is also necessary to improve the global system of monitoring agroclimatic changes, soil erosion and desertification. In particular, we must do so using the opportunities that modern space facilities provide us with today.
Another question is the lack of national and supranational regulatory regimes and agricultural support. Endless discussions on this topic are taking place at various forums. All seem to agree that excessive protectionism harms sustainable development, including the agricultural sector development, but protectionism flourishes nonetheless and results in speculation in the grain market.
I think we need to improve the system of mutual information and early warning with regards to markets in order to minimize the pricing speculation and create more normal working conditions. The modernisation and development of the Food and Agriculture Organisation of the United Nations (FAO), a universal platform that unites producers and consumers of foodstuffs, must remain an unconditional priority. Russia became a full member of this organisation in 2006 and intends to actively develop its cooperation with the FAO.
Finally, our cooperation at the regional level plays an important role. Given the length of our borders and the size of our country, the Asia-Pacific region remains crucially important for us. By diversifying the destinations of Russian exports we are creating further incentives for our partners, as well as incentives for our own development, especially in the Far East and Eastern Siberia. And this is of course a very important and topical task for Russia.
In addition we have scheduled a discussion on cooperation in the Black Sea basin – the Russian first deputy prime minister [Viktor Zubkov] just talked about this – and we hope to discuss the prospects of creating a so-called regional grain pool that could work on coordinating and exchanging information on all issues.
By way of conclusion to my opening address I would note the crucial significance of research into crop production. It is therefore absolutely no coincidence that this Forum is taking place in St Petersburg, where there is a research centre of global significance, the N. I. Vavilov Institute of Plant Industry housing a unique collection of over 200,000 samples of agricultural crops.
The search for innovation, use of modern agricultural technologies, achievements of plant breeding and seed production are the preconditions for the dynamic development of grain production. Of course we invite all those present to engage in joint research and in this sense there is yet one more sphere of cooperation, namely scientific and technological cooperation.
Dear friends, let me express my hope for the successful promotion of the ideas that will be discussed today and for a successful forum. I wish you success and prosperity. We face a very ambitious and difficult task.