Agricultural sweetener proposed for Russians

Trade Minister Tim Groser. Photo / APN

New Zealand has proposed a special agricultural co-operation chapter should be injected into the free trade agreement (FTA) with the Russian-led customs union to help overcome fears by Russian farmers.

Trade Minister Tim Groser dispatched New Zealand's chief negotiator Vangelis Vitalis to Moscow this week to make progress on issues blocking the successful completion of the FTA with Russia and its partners Belarus and Kazakhstan.

"We are ready to enter into an agriculture co-operation agreement as part of the deal," Groser said.

"They're not developing countries. We don't give them aid.

"But let's be blunt, we'll put some resources and money behind that model - scholarships, technical exchanges and model projects."

Groser said the Russian farmers were basically "scared of the competitiveness" of New Zealand farmers - particularly from the dairy sector.

"We've got to deal with these fears. The right way to do this is to be insistent on the end point of tariff elimination but be deeply pragmatic about the transition timetable."

The proposed agricultural co-operation chapter was discussed at the formal meeting between Russian President Vladimir Putin and Prime Minister John Key at the Vladivostok Apec meeting.

Key is optimistic the FTA will ultimately be completed.

"We still think there is every reason to keep on playing in this sphere," Groser said.

"My chief negotiator is now back to Moscow to meet his Russian counterpart. "They need to absorb the political messaging from the Putin-Prime Minister discussion."

Putin earlier told the Apec CEOs summit that Russia welcomed investment from foreign countries in the agriculture sector where the amount of farmland was now less than in the Soviet era.

Groser has delivered letters of support from some leading New Zealand companies - Fonterra, Zespri, Anzco Foods and the Pipfruit Growers. But he said the Russians needed to understand "the New Zealand Government cannot order investment".