NEW MINISTER OF AGRICULTURE ANNOUNCED

UNCLAS MOSCOW 000640

SENSITIVE
SIPDIS

USDA FAS FOR OCRA/KUYPERS; OSTA/HAMILTON, HAXTON,
BEAN; ONA/TING, SALLYARDS
PASS APHIS MITCHELL
STATE FOR EUR/RUS
STATE PASS USTR FOR CHATTIN; HAFNER, KLEIN, MURPHY
BRUSSELS PASS APHIS/FERNANDEZ
VIENNA PASS APHIS/OELLERER

E.O. 12958: N/A
TAGS: EAGR ETRD ECON PINR WTO RS
SUBJECT: NEW MINISTER OF AGRICULTURE ANNOUNCED

SENSITIVE BUT UNCLASSIFIED


1. (SBU) SUMMARY: Russian President Dimitriy
Medvedev appointed Elena Skrynnik (Screen-nik)
as the Minister of Agriculture on March 12,
2009, succeeding Aleksey Gordeyev, who took
over as Governor of Voronezh Oblast after serving
for 10 years as Minister of Agriculture. Skrynnik,
a 47-year-old with degrees in medicine and
economics, is a relative unknown even to many
agriculture professionals, and has more experience
in the field of financing than in traditional
agriculture. At least in the near-term, she will
likely follow the current policies of her superiors
and will not compete with First Deputy Prime
Minister Zubkov in charting the direction of
Russia's agricultural policies. Her views on WTO
are as yet unclear, but she will have to work hard
to be any more anti-WTO than her predecessor. END
SUMMARY.

--------------
Skrynnik's Background
--------------


2. (SBU) Elena Skrynnik was born in Chelyabinsk
near the Ural Mountains and graduated from
Chelyabinsk Medical Institute with a Doctor of
Medicine degree. She came to Moscow and was a
classmate of Aleksey Gordeyev at the Academy of
National Economy of the Russian Federation from
where she graduated in 1992 with a PhD in economics.
Nearly her entire working life has been spent in
the field of leasing, first in medical equipment in
the 1990's and then in the agricultural sector
(machinery, breeding stock, and equipment) since

2001. Since 2001, she has been the General
Director of the Russian State Agro-Industrial
Leasing Company OAO "Rosagroleasing", which has
been the lead executor of the national priority
project for Russian agricultural development.


3. (SBU) Financing of Rosagroleasing under the
National Priority Project in agriculture from
2006-2008 totaled 24 billion rubles (then about
USD 840 million),of which 3 billion rubles were
used for financing of machinery needed by the
livestock sector and 9 billion rubles for financing
brood livestock needed by the domestic beef and
dairy sectors. During that time, Rosagroleasing
took orders from its network of dealers throughout
the country to purchase agricultural machinery such
as tractors and combines, equipment for the
agroindustrial complex, along with breeding stock
which was then re-sold to Russian buyers. Often,
Rosagroleasing was the monopoly purchaser of these
products and rural buyers spent more in payments of
principal and interest to buy the products through
Rosagroleasing than they would have through
commercial purchases and commercial financing,
suggesting there was enough slop in the system to
cover corrupt payments. Nevertheless, farmers had
to cooperate with Rosagroleasing since they
represented the Ministry of Agriculture and the
National Agricultural Priority Program funds passed
through Rosagroleasing. Ms. Skrynnik was an active
leader in this enterprise; President Medvedev said
he met her in 2005 when he started overseeing the
four National Priority Projects. First Deputy Prime
Minister Zubkov, who is the current Chairman of the
Board of Directors of Rosagroleasing, has also had
the opportunity to work closely with Ms. Skrynnik,
since she also served on the Rosagroleasing Board
in addition to being its CEO.

--------------
Events In the Past Week
--------------


4. (SBU) On the eve of the Women's Day national
holiday on March 6, 2009, President Medvedev
invited a number of prominent women to his
residence and made comments which were covered
widely in the media. He noted that there were only
two women ministers, and that the country needs to
bring more women to the government. Most analysts
consider that policy to be a key motivation for the
appointment. Skrynnik's name was not on Medvedev's
"Golden 100" list, leading some to conclude that it
was her connections to influential power brokers
that made the difference in securing the
appointment.


5. (SBU) Even though Skrynnik is on the United
Russia Supreme Council, it was Communist Deputy
Alexander Shirshov who made the motion in the State
Duma on Wednesday, March 11 that Skrynnik be
appointed Minister of Agriculture. In a strange
twist, United Russia deputies rejected that motion,
but the following day President Medvedev announced
her selection, suggesting that this was a decision
from the very top that was not vetted with the
United Russia Party members in the Duma. Her
selection evidently pleased Shirshov, who is quoted
in the Moscow Times of March 13 as saying the
sector needs an urgent rescue. "We need a
breakthrough right now, so we need a person with
energy rather than a bureaucrat."


6. (SBU) Skrynnik was daring in her first press
conference as the Agriculture Minister on Friday,
March 13, commenting that, "We will be examining
the effectiveness of work of the staff. Those, who
do their duties professionally, will keep working.
Those who do not understand what should be done,
will not continue to work." First Deputy Prime
Minister Zubkov echoed this sentiment when he
presented her to the Agriculture Ministry and
commented on her strong management skills and
likelihood that she would bring with her some of
her trusted team from Rosagroleasing. It is not
clear whether her appointment will lead to any
significant changes at the Veterinary and
Phytosanitary Surveillance Service (VPSS).
Although Sergey Dankvert, Head of VPSS, reports
to the Ag Minister according to the organizational
chart of the Ministry of Agriculture, in reality he
appears to report directly to the Kremlin. During
her press conference she also confirmed that her
immediate priority would be determining grain
intervention prices (the guaranteed minimum price),
establishing control over fuel prices for farmers
and expanding opportunities for farm credit.

--------------
Policy and Trade Implications
--------------


7. (SBU) Based on conversations with officials and
employees in the Ministry of Agriculture, the
selection of Ms. Skrynnik was a shock to nearly
everyone at the ministry. Many are unhappy as she
was not among the leading contenders and is
considered an outsider to the field of agriculture.
An official who knows her well confirmed that she
was selected because she will not compete with
Zubkov in setting policy directions. She is known
to be obedient to her superiors and is expected to
use her managerial energies to help implement
current programs. She is not considered a reformer,
as she worked well for many years in the cozy and
often corrupt style of Russian business at
Rosagroleasing. A manager of a large-scale,
private agricultural company in southern Russia
told us that Skrynnik is a very competent manager
and is able to make quick decisions. But he also
sees her as implementing policies that would mostly
be imposed from above.


8. (SBU) Post does not expect that Skrynnik will be
as vocally outspoken or as independently critical
of WTO accession as was Minister Gordeyev; she will
more likely follow the Kremlin's line, which
remains rhetorically pro-WTO. There are some who
have noted that she is not overly friendly toward
the United States in general. We will see whether
she will take a lead from higher authorities in her
willingness to engage cooperatively with us now as
minister.


9. (SBU) Regarding other international matters,
Ms. Skrynnik has at least the personal experience
of purchasing foreign equipment and technology and
understands its usefulness in modernizing the
agricultural and agro-industrial sectors. For
example, John Deere representatives in Russia
worked closely with her four years ago and arranged
a credit facility between Rosagroleasing and the
Export-Import Bank. At the very last moment,
Rosagroleasing was blocked from using the facility
by the actions of other ministers in the government.


10. (SBU) Another manager for one of the U.S.
agriculture equipment manufacturers in Russia told
us that Skrynnik's selection was a complete
surprise. He noted he had met her several times,
and that she struck him as more of a businesswoman
than a bureaucrat. He expressed some hope that she
would listen to the needs of farmers and
agricultural equipment suppliers, especially
regarding financing for foreign agricultural
equipment.


11. (SBU) In past years, Ms. Skrynnik looked
primarily to Europe for cattle purchases to upgrade
the productivity of both the beef and dairy sectors.
After several Russian teams visited the United
States in and reported back about the huge
achievements of the U.S. dairy and beef sectors,
Rosagroleasing bought 300 head of cattle from the
United States, with plans to purchase at least
2,000 more in the coming months.

--------------
COMMENT
--------------


12. (SBU) With the support of President Medvedev,
Elena Skrynnik has received a huge promotion from
her position at Rosagroleasing to become the first
woman to hold the position of Minister of
Agriculture. She will need all of her energy,
expertise, and managerial skills to help transform
the Russian agricultural sector, which has
significant, fundamental problems. During this
period of economic crisis, the Kremlin seems to
have chosen a person who will follow existing
policies and attempt to make them successful rather
than someone who will lead Russian Agriculture in a
new direction. After the ten-year tenure of the
anti-trade, anti-WTO Minister Gordeyev, we expect
Skrynnik will be more compliant, and less outspoken
than Gordeyev, but not necessarily any more
supportive of WTO accession.

BEYRLE