News & Events in Belarus

Lukashenko hosts conference to discuss agribusiness modernization with Vitebsk Oblast as example

MINSK, 27 August (BelTA) – Belarus President Aleksandr Lukashenko has convened a government conference to discuss several matters of social and economic development, BelTA has learned.

One of the topics was the modernization of agricultural production, including the handover of state-owned agribusiness assets to private companies, which will manage the assets. The matter was discussed using Vitebsk Oblast as an example, however, the president elevated the discussion up to the republican level. “We will consider a variant using Vitebsk Oblast as an example. Privatization would be too drastic a term. It looks like we hand over state properties into management or sell them to private companies right away,” Aleksandr Lukashenko said.

A concrete step-by-step anticrisis plan was worked out for Vitebsk Oblast at the beginning of the year, he added. One of the steps is handing over the underperforming enterprises to a new owner, which will manage the assets. The new owner has appropriate managerial potential and financial resources for rehabilitating the enterprises, getting them to make quality products, and for selling the products on the home market or foreign ones.

In accordance with this strategy a decision has been made to hand over Orsha Meat Canning Plant to Agrokombinat Dzerzhinskiy and to assign individual agricultural enterprises in Orsha District to OAO Savushkin Product. As an investor Savushkin Product has signed a contract to lease the property of OAO Polotsk Dairy Plant for the sake of consequent accelerated development. “It is necessary to understand that such decisions are no gift for a private owner but a burden if anything,” the president stated. “If you take over processing, you have to understand that you will have to deal with 20-30 agricultural enterprises that need to be paid well and which milk has to be shipped to Polotsk Dairy Plant. This is the kind of policy we need instead of simply allowing them to take over enterprises and that’s it.”

Continuing the line of thought, the head of state noted that in every case obligations have been stipulated, including obligations to modernize manufacturing facilities and repay previously accumulated liabilities. “Naturally, the obligations are not simple. You should also take it into account,” he said.

The president drew attention of the chairman of the Vitebsk Oblast Executive Committee and of the prime minister to the fact that if agribusiness assets are transferred into the management of private companies, then state interests must be prioritized. It is quite logical that a private investor would be interested in buying an enterprise as cheaply as possible. At the same time, the state is interested in getting a reasonable amount of money for various assets.

“I’d like to warn the governor and the prime minister: your heads will roll if everything over there is not fine from the point of view of the state. Certainly, a private owner wants to pay as little as possible. It is natural. But you have to sell for as much as possible. But we have to understand that the key is not getting some money. Getting money is important but it is not the key. The key is for these enterprises to develop,” Aleksandr Lukashenko stressed.

The head of state once again remarked that heads of private companies would have to invest in the development of the district where these enterprises are located. Among other things processing enterprises will have to pour efforts into the development of their own raw materials base and invest in agriculture. “They will be held accountable for having their own raw materials. Here is land for you. Use it to make raw materials. Pay well to those, who will make them. Pay these people. It is another issue. I want all of you to understand my policy in this regard: we must be statesmen through and through,” Aleksandr Lukashenko said. “For some reason you don’t submit proposals in this context to me. How should I classify it? As corruption, lack of professionalism, or lack of responsibility?”

He also formulated another requirement for heads of private companies: the money they earn has to stay in the country instead of getting transferred abroad. “All the earnings must stay here. Our guys, who make money here, must invest them here,” the president stressed.

The conversation touched upon these matters as part of the discussion about a proposal of the government and of the Vitebsk Oblast Executive Committee concerning the future destiny of all the agricultural production in Dubrovno District. Handing over ten organizations in the district and the Vitebsk Bacon enterprise to the Servolux Group is the idea. During the initial stage the oblast administration already decided in favor of handing over the management of these agricultural enterprises to the investor represented by Servolux Group. It allowed providing financial support to the agricultural enterprises for the sake of doing the entire complex of agricultural works in H1 2026, thus laying the foundation of the future harvest.

Since then the investor has expressed readiness to buy out these agricultural enterprises and take care of their future development. The government has drafted a presidential decree, which provides for selling each enterprise for one base amount. Meanwhile, the new owner will have to honor a number of obligations, including debt repayment and investment.

Apart from that, the investor demands certain preferences. “It is a well-known practice. We’ve always done that. But to which extent? You, Vasily Nikolayevich [Gerasimov, Chairman of the State Control Committee], will have to report it to me after recalculating it in the most serious manner,” Aleksandr Lukashenko gave the instruction.

Servolux Group is also expected to be tasked with the responsibility of restructuring the troubled debts of these enterprises. The head of state noted that it means certain preferences as well, although the proposal is a justified one. “The group didn’t earn these debts. But restructuring, deferment, and postponement must happen within the five-year-long presidential term. Other privileges and preferences have been suggested as well. If we combine all of them, then why would we need such an investor? It should not be a mortal blow to them but it should be advantageous for the state, too,” the president once again formulated the policy.

Continuing the line of thought, he made a few comments about subsidies to agriculture. The thing is that the state invests certain resources in the development of agricultural enterprises, including those that may be handed over to a private company later on. “As we embark upon the reforms I am talking about, we should take a look at the subsidies for agriculture. Who do we subsidize? [Director General of OOO Santa Impex, managing company of the holding company Santa Aleksandr] Moshensky and [Chairman of the Board of Directors of SZAO Servolux Yevgeny] Baskin. Just an example,” the head of state pointed out. “They are not poor people, after all. They have good profits. And these profits have something to do with the subsidies and other kinds of aid and support on the part of the state. We will support rural dwellers, farmers, but this support should be reasonable.”

The possibility of registering real estate properties using a shortened list of documents is part of the package. The president agreed with this proposal and remarked that this practice can be applied in the future, too. “Quite okay. Why do we need all the red tape? This experience may be translated onto others later on,” he added.

Providing land plots for building real estate properties without an auction, without a payment for the right to lease them has been suggested as well. This is why Aleksandr Lukashenko reminded of a special attitude to agricultural lands and forests. One of the critical remarks the State Control Committee made about the draft decree focused on the right to place construction sites in agricultural lands without taking into account soil fertility ratings. Apart from that, the president said it is necessary to be smart about agricultural operations. For instance, if it is necessary to increase the area under some crop, then it is necessary to evaluate the advisability of the step and evaluate all the risks. “It is necessary to strive for intensification instead of getting these harvests using extensive methods,” the head of state stressed.

The head of state raised a number of issues, which are related to the draft presidential decree, before participants of the conference. He wondered how deeply interests of the state are taken into account, how tight the suggested deadlines for repaying previous debts are, and what investments are supposed to be made and in what areas. The president also wondered whether these suggested measures would have an impact on the situation with the development of agricultural enterprises across the entire country, not only in Vitebsk Oblast in the future.

“We are talking about agricultural products of an entire district, of an entire oblast. It is new experience for us. As I’ve said, it may come in handy in the future. For instance, Mozyrsalt Company is actively working to the same effect in Yelsk District. I gave the relevant instruction [to the head of the company] half a year ago. This is why not only private companies but also state-run ones will become involved in it,” he stated.

“I’d like to warn right away that the transfer of underperforming organizations to an investor should not result in the disengagement of heads of municipal authorities. The chairman of the Dubrovno District Executive Committee must keep an eye on the matters under his purview: order, discipline, human rights. And responsibilities must not be forgotten,” Aleksandr Lukashenko stressed. “Human resources are the key. Not a single person should be appointed without your approval. I want the heads of oblast administrations and district administrations to understand their rights and obligations most assuredly. I want them to be able to hold people responsible for concrete results.”