A "safety cushion" for farming
30.09.2014 — Analysis
A realistic aspiration of the Sverdlovsk region
Over the next five years the Sverdlovsk region intends to significantly increase its share of the market for meat and dairy products. In addition, the regional government plans to expand the production of cereals and potatoes, as well as commercial-grade fish. Given the raging economic war between Russia and the West, officials are trying to create a "safety cushion."
Entrepreneurs claim that they are fully up to the task: the region's agricultural potential is enormous, and there are times when it is not so much material support that is needed to bring it to life, as much as administrative assistance. This columnist for RusBusinessNews has determined that attention paid to rural infrastructure and agricultural science yields a very tangible result.
The statistics back that up: in the first eight months of 2014, the production of butter and cheese products increased over 20% in the Central Urals. That number would be even higher were it not for the shortage of production capacity. Sergei Suetin, the general director of the Irbit dairy, says that his business does not have enough aging rooms where the cheese can ripen. This issue is being resolved: in November, after a 15-million-ruble investment, that plant will double its output of cheese products.
But it is not only lack of capacity that is holding back production, but also a dearth of raw materials with a high content of protein and fat. Suetin claims that the sunlight and the cattle feed in the Sverdlovsk region keep agricultural enterprises from being able to guarantee that their milk will be of the requisite quality. However, progress is being made in regard to fodder.
Scientists from the Ural Agricultural Research Institute claim that after new varieties of clover and alfalfa were planted in large areas at the Kilachevsky agricultural production cooperative, they found that the annual yield per forage-fed cow increased from 7,002 to 8,234 kilograms. Milk production grew throughout the region as a whole, which experts also attribute to higher-quality feed.
This positive trend has held steady for several years now: as the governor of the Sverdlovsk region, Evgeny Kuyvashev, noted at a September meeting, in six months of 2014, 4% more milk was produced than during the same period last year. The head of the region is confident that steady growth is the result of purposeful work to update livestock farms and introduce new technologies and modern equipment. Since 2007, 45 dairy farms in the Sverdlovsk region have been built or renovated, and another 25 facilities will be opened in 2014 with the fiscal support of the region.
An increase in the supply of dairy raw materials opens up new avenues for the work of food processors. The entrepreneur Alexander Shadrin intends to build a new cheese dairy in the Sverdlovsk region. The dairy plant in Verkhnyaya Pyshma also has serious plans to pursue cheese production. In the last six months two plants in Ekaterinburg and Bogdanovich have suddenly begun to produce dairy products for baby food. It is worthy of note that this year 4.7 times more funds were invested in the dairy industry than in 2013.
And the funds poured into the meat industry have almost doubled. Processing businesses are setting up new lines, expanding their range of products, and updating their technology. The producers of raw materials are taking advantage of the economic sanctions to try to expand their market share. Currently the Sverdlovsk region can provide for 56% of its own needs for meat and meat products. Regional officials believe that for security purposes this figure should be increased to 60% in the near future.
Sergei Burdakov, the director of the Gornouralsky agricultural complex, does not foresee any problems with pork production. According to him, the industry is developing at a rapid pace, and thus the region can easily forgo agricultural imports, needing only subsidies to renovate and establish facilities to slaughter and butcher pigs, since Russian meat-processing plants are accustomed to working with ready-made raw materials. A modern slaughterhouse costs about 50 million rubles, so quite large investments are needed.
According to Burdakov, domestic pork producers now have no choice but to acquire slaughterhouses. The entrepreneur does not envision any problems building them: Asian and South American countries, in addition to Europe, are offering the equipment, and the investments pay for themselves fairly quickly.
The future looks pretty good for the fishing industry as well. In the first six months of the year production rose 20% over the year before, and fisheries still have some room to "swim." During the Soviet era, up to 1,000 tons of carp a year were raised in the Central Urals and placed on the market, but now that number has dropped to 131 tons. Employees at the Reftinsky fish farm claim they are ready to realize their existing potential - but the state needs to support research and development and provide administrative assistance for their path to the market. The government of the Sverdlovsk region has already developed an applicable program to develop aquaculture: by 2020 the production of commercial-grade fish will rise to 500 tons.
But the situation with crops is more complex. The region can provide itself with fruit and vegetables, but there are serious difficulties with seeds. For example, potato farmers prefer the Dutch and German varieties, with which up to 70% of fields are sown. Oddly enough, those are better adapted to the climatic conditions of the Urals and provide a higher yield.
Nikita Zezin, the director of the Ural Agricultural Research Institute, says that when it comes to selective breeding, the business he heads can hold its own against the foreigners. For example, new Lux and Bravo varieties have been developed that can produce a crop of 60 tons per hectare without the use of fertilizers, other plant protection, or herbicides (foreign varieties yield an average of 40 tons). But the problem is that during the 1990s, seed production in Russia foundered, and the Ural Agricultural Research Institute cannot yet deliver new seed material on a commercial scale.
The process of reproducing a developed variety is quite lengthy and demanding, requiring both trained experts as well as money, otherwise the new product will lose the desired properties during the "cloning" process. Experts at the Ural Agricultural Research Institute have a lot of work ahead of them to improve the health of primary and secondary seed potatoes. That will take five years and 500 million rubles. But when the work is finished, regional seed production can regain its lost ground, and the need for planting stock from Europe will likely diminish.
The Sverdlovsk region's experience shows that many sectors of the food market can do without foreign products. When seeking a replacement for imports, the problems are either of a technical nature (Russia did not invest in infrastructure for a long time after the collapse of the Soviet Union), or organizational (when reforms were underway, the mechanisms for directly supplying agricultural products to the market were not sufficiently considered). Today those lapses need to be remedied.
As part of its implementation of the 2013-2020 State Program to Develop Agriculture and to Regulate the Markets for Agricultural Products, Raw Materials, and Food Supplies, the Sverdlovsk region intends to purchase 100,000 sq. meters of housing for agricultural specialists and to put in 1,741 kilometers of gas lines, thus improving the provision of gas to the countryside.
Governor Kuyvashev promised that the practice of agricultural fairs would also be expanded, thus making it possible for local producers' goods to be delivered directly (55 such events were held in Ekaterinburg, Aramil, Pervouralsk, Rezh, and Nizhny Tagil in 2014).
The experts feel it is obvious: if the state will increase its support for agricultural producers, then Russia will certainly not have to import "waxy" apples from Poland, or antibiotic-laced milk from Turkey.
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