VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #0396/01 0491201
ZNR UUUUU ZZH
P 181201Z FEB 09
FM AMEMBASSY MOSCOW
TO RUEHRC/USDA FAS WASHDC PRIORITY 5447
RUEHC/SECSTATE WASHDC 1997
INFO RUEHVI/AMEMBASSY VIENNA 4716
RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 5274

UNCLAS MOSCOW 000396 
 
SENSITIVE 
SIPDIS 
 
USDA FAS FOR OCRA/KUYPERS; OSTA/HAMILTON, BEAN; 
ONA/TING, SALLYARDS, MURPHY 
PASS APHIS MITCHELL, BURLESON 
STATE FOR EUR/RUS 
STATE PASS USTR FOR CHATTIN 
BRUSSELS PASS APHIS/FERNANDEZ 
VIENNA PASS APHIS/OELLERER 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD ECON WTO RS
SUBJECT: AG MINISTER SENT TO PASTURE 
 
REF: A) MOSCOW 081029 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (SBU) SUMMARY: Russian President Medvedev 
recently removed long-serving Minister of 
Agriculture Aleksey Gordeyev from his post, 
nominating him to be governor of Voronezh 
Oblast as part of a larger shake-up of regional 
governors.  While this action represents a 
significant demotion for Gordeyev, most of our 
sources maintain that it should not be viewed 
as punishment but rather as the opening salvo 
in what could be a  broader  government 
reorganization in the wake of the economic 
crisis.  GordeyevQs ouster as Agriculture 
Minister after ten years in the job is not 
likely to end the widespread corruption and 
protectionism that permeate all levels of the 
ministry. At this point, the GOR has not named 
a replacement for Gordeyev. END SUMMARY 
 
------------------- 
Gordeyev is Demoted 
------------------- 
 
¶2. (SBU) Minister of Agriculture Aleksey 
Gordeyev, long known as a strong supporter of 
protectionism and government control in 
agricultural production and an outspoken 
opponent of WTO accession - will soon depart 
his position to become the new governor of the 
Voronezh oblast.  His Deputy, Alexander Kozlov, 
will also be leaving MinAg to take up the post 
of acting governor of Oriol oblast.  The 
transition is expected to take place quickly. 
The regional legislative authority (a rubber 
stamp) can approve the PresidentQs nominee for 
governor at the end of February.  Once approved 
by the region, Medvedev will issue a decree on 
the MinisterQs reshuffle.  In the event that 
Gordeyev departs before his successor is 
nominated, Deputy Ag Minister Andrey Slepnev 
would run the ministry of agriculture in the 
interim. 
 
¶3. (SBU) The Russian media attributed these 
changes to Qanti-crisis rearrangementsQ of 
President Medvedev that are aimed at re- 
enforcing the management of Russian regions. 
It is also widely seen as the opening salvo in 
what could prove to be an extensive government 
reorganization as the economic crisis continues 
to worsen. 
 
--------------------------------- 
But How Much of a Demotion Is It? 
--------------------------------- 
 
¶4. (SBU) Our sources in the agriculture sector 
insist, however, that GordeyevQs demotion was 
not unexpected but rather part of a planned 
reshuffle that had been put off last fall in 
the wake of the Georgia conflict and start of 
the economic downturn.  Moreover, these sources 
claim that the Vornoezh governorship is a 
honored retirement for Gordeyev and that his 
resignation is in sync with the expiration of 
Vladimir KulakovQs term as governor of the 
region, which is scheduled to end on March 14. 
Kulakov, a former head of the 
counterintelligence department at the Voronezh 
branch of the KGB, was elected governor of 
Voronezh in 2000 and re-elected in 2004.  His 
tenure as governor has been heavily criticized 
for failing to develop the rich agricultural 
resources  of the region, which remains one of 
the poorest in Russia. 
 
¶5. (SBU) The Russia country manager of one of 
the U.S. agricultural equipment manufacturers 
told us that with a wave of bankruptcies likely 
coming in the agricultural sector as the 
economic crisis continues, ensuring stability 
in important agricultural regions, including 
Voronezh, would become increasingly important. 
While he agreed that GordeyevQs transfer to a 
regional post was a demotion, Gordeyev was 
absolutely loyal, would likely remain close 
to Putin, and would help to ensure regional 
stability through a difficult period.  By 
contrast, the next agriculture minister could 
well be a Qfall guyQ who would take the blame 
for the credit problems and the coming 
insolvencies in the agricultural sector, 
according to our contact. 
 
¶6. (SBU) Gordeyev publicly attributed his 
QresignationQ to the extended time he had 
served as minister (ten years) and maintained 
that the new assignment QcoincidesQ with his 
personal wishes.  While the Voronezh 
governorship is clearly a step down from 
minister of agriculture, our contacts tell us 
that Governor Gordeyev will continue to be a 
member of a small and high-level group of the 
KremlinQs top governmental policy-makers on 
agricultural issues. 
 
------------------------------------------- 
Criticisms of GordeyevQs Tenure as Minister 
------------------------------------------- 
 
¶7. (SBU) Some of GordeyevQs critics hold him 
responsible for the sharp inflation in food 
prices during the last two years.  In 2007, 
food prices increased 17.1 percent.  They 
increased another 17.6 percent in 2008.  In 
2008, moreover, the largest increases were seen 
in basic foodstuff commodities, including   a 
33.8 percent jump in pasta prices, more than 25 
percent rises for bread and baked products, 
groats and legumes, and more than 20  percent 
increases for meat, poultry, and vegetable 
oils. 
 
¶8. (SBU) Further undermining GordeyevQs 
position, during the last few months, he 
delivered several unusual messages to the 
Russian public, which reportedly concerned 
Kremlin officials, such as establishing 
production quotas for domestic poultry 
and egg products.  Putin also severely criticized the 
Ministry of Agriculture last summer for using 
blatantly inaccurate data about the amount of 
Russian land being used for agricultural 
production. 
 
--------------------------------- 
Who Will be the Next AG Minister? 
--------------------------------- 
 
¶9. (SBU) Several candidates are rumored to be 
on the short list to replace Gordeyev as 
Agriculture Minister, including Igor Rudeniya 
and current Governor of Belgorod oblast 
Yevgeniy Savchenko. Rudeniya currently serves 
in the White House as Director of the 
Department of Agro-Industrial Complex . Savchenko 
is viewed as the leading contender, given his 
extensive agricultural background and solid 
relationship with the GOR leadership, including 
First Deputy PM Zubkov, who managed a 
collective farm during the Soviet era and is 
the chief policy-maker on agriculture issues 
under PM Putin.  Unfortunately, he is known to 
share GordeyevQs protectionist tendencies. 
 
------- 
COMMENT 
------- 
¶10. (SBU) As Agriculture Minister, Gordeyev has 
advocated a toxic mix of state control and 
protectionism.  During his ten-year reign, 
Gordeyev reinstated governmental control and 
intervention throughout the agriculture and 
food sector.  He also successfully controlled 
the volume of the largest agricultural U.S. 
export to Russia, poultry - through 
protectionist measures such as tariff rate 
quotas and sanitary and phyto-sanitary (SPS) 
measures by the Russian Federal Veterinary and 
Phytosanitary Surveillance Service (VPSS) that 
were based on bogus science.  He was a vocal 
opponent of RussiaQs WTO accession process and 
the QdamageQ it could inflict on domestic 
agricultural producers (including himself as 
one of the largest poultry producers in 
Russia), and insisted that Russia should be 
entitled to use large agricultural subsidies 
after accession that were unacceptable to 
RussiaQs trading partners.    Unfortunately, we 
think GordeyevQs demotion likely has nothing to 
do with his anti-trade bias and with 
protectionism and corruption so deeply 
entrenched in the Ministry of Agriculture at 
all levels, any change in leadership at the 
ministry will not likely bring a quick reform 
of either the VPSS or a more  enlightened view 
on WTO membership. 
 
BEYRLE