The government is expected imminently to confirm a plan outlined earlier this month by Deputy Prime Minister Viktor Zubkov to subsidise the sale of some of Russia's grain inventories of nearly 10m tonnes, said Andrei Sizov Jr from Moscow-based SovEcon consultancy.

The scheme would provide 5bn roubles support to the state-run United Grain Company which, given weak global prices, stands to swallow huge losses on the 2.5m-3.0m tonnes of grain Russia is targeting for sale this year.

Much of the grain was acquired through intervention purchases during buoyant market conditions two seasons ago.

Indeed, UGC chief executive Sergei Levin believes that the money will be sufficient to cover only 1.5m-2.0m tonnes, according to a report in newspaper Kommersant.

'No problem with money' 

While the government baulked during the economic downturn at the cost of swallowing losses on its grain reserves, storage costs - estimated at 62 roubles per tonne per month - and the threat of condition loss in lower-grade facilities are believed to have provoked a change of heart.

"The announcement should have been made last week," Mr Sizov told Agrimoney.com

"As far as I know, there is no problem with money."

The sell-downs were likely to be stretched throughout the year, he said, adding that the grain was in the main likely to be sold at tender to private merchants for exporting.

Subsidy reforms 

The comments come amid a debate in Russia on reform of its farm support regime, which is also attempting to foster the country's development to self sufficiency in pork and poultry.

The government is considering measures such as offering growers loan guarantees backed by grain as collateral, as well as export agreements with major importers such as Egypt to facilitate trade.

Russia's current intervention programme had, as of February 4, purchased 1.78m tonnes of grain, comprising 1.36m tonnes of third-grade wheat; 352,000 tonnes of fourth-grade wheat; and 66,000 tonnes of milling rye.