Russian gardeners are asking to introduce quotas for the import of apples from September to April

Industry associations of Russian gardeners have asked the Prime Minister to introduce quotas for the import of apples for the period of their mass collection and sale in Russia - from September to April. Their letter to the Head of the Cabinet says that against the backdrop of rising production costs and high import volumes, many gardeners may be on the verge of bankruptcy, and the import substitution program for apples may be disrupted.

As associations note, in 2021, due to rising prices for fertilizers, plant protection products, containers, fuels and lubricants, etc., the cost of Apple production increased by an average of 50%. At the same time, a large number of cheap foreign apples, mainly from Iran and Moldova, entered the domestic market, which led to a decrease in wholesale prices, Aidyn Shirinov, head of the Association of Nurseries and Gardeners of the Stavropol Territory, told the publication. Thus, the selling price for summer-ripening apples fell by half year on year.

According to industry associations, about 1.2 million tons of apples are grown in Russia annually, about 1 million tons are imported. consumption.

Igor Mukhanin, president of the Association of Russian Gardeners, says that the increase in production costs has hit hard on the profitability of gardeners. Now, according to him, all components of production are becoming more expensive: earlier, about 1.5 million rubles were required per 1 hectare of intensive orchards. — for drip irrigation, planting material, trellises. “Iron has risen in price by 2.5 times, poles by 50%, planting material for 200 rubles. you can’t buy IT anymore - only for 350-380 rubles, the drip irrigation system has increased in price by 15-20%,” Mukhanin commented to Agroinvestor.

Oleg Kobets, general Director of the Bryansk Garden, says that the cost of laying the garden has increased by 20-25% compared to last year. According to him, it would be comfortable for the company next year (there are young apple trees in its orchards, the first large harvest is expected in 2022) to sell apples at a price of 45-50 rubles per kg at the current production cost. “In this case, there would be profitability,” he told Agroinvestor. Kobets believes that apple import quotas could help gardeners.

While the cost of production increased by about 30%, the price of apples, on the contrary, decreased by the same amount, says Alexei Volochay, CEO of Agronom-Sad. “In total, the overall gap is already 60%, and we are actually on the verge of profitability. It is difficult to imagine how small farms exist now that do not have such a margin of safety as ours,” he commented.

Against the background of the rise in the cost of production components, the cost of apples rose from 20 rubles/kg last year to 30 rubles/kg this year, Mukhanin compares. Moreover, they have to be sold for about the same 30 rubles/kg. But gardeners are not worried about summer apples - there are few of them, but for autumn ones, when the mass harvest begins. According to the head of the association, for the period from September to January, when Russian apples are in surplus, import restrictions should be introduced.

One of the main components of gardening is storage. “In September last year, my company planned to build the first refrigerator for 1 thousand tons. Then it costs 50 million rubles, now it costs 78 million rubles, and this is without the cost of the site, entrances, etc.,” Mukhanin complains. At the same time, in Eastern Europe, the EU authorities have built thousands of modern storage facilities that farmers can use. “And they store 80-85% of their crops in them. And the remaining 15-20% of substandard products will be sent to Russia at a price below cost, in order to prevent our farmers from developing, ”says Mukhanin. At the same time, this approach does not greatly interfere with large Russian farms - they themselves have modern storage facilities for commercial apples. So the main blow will be taken by farmers who do not have them, he believes.

The presence of storage facilities allows the company to feel confident in the face of seasonal price declines, commented Andrei Neduzhko, CEO of the Steppe agricultural holding (part of Sistema). But far from all gardeners have storage facilities, and in September-November a surplus really forms on the market, as a result of which some farms are forced to sell apples at a price below cost. A potential solution to the problem could be import regulation, he thinks.

Director of the Fruit and Vegetable Union Mikhail Glushkov agrees that this is a necessary initiative in terms of the development of horticulture, but in a short period of time it will provoke an increase in apple prices. He doubts that in the current conditions, when all the work of the authorities is aimed at curbing inflation, quotas will be introduced.

It's not just about the problems of a single business, the threat hung over the entire industry as a whole, Volochay believes. In his opinion, the government needs to maintain a balance in the apple market and replace products with imported ones only in cases where there is a real shortage. For regulation, it is necessary to apply market instruments standard for international practice - duties and quotas for supplies. And "Agronom-Sad" has already raised this topic at meetings in the Ministry of Agriculture, the exhibition "Gardens of Russia", turned to the Minister of Agriculture Dmitry Patrushev, says the head.

In August last year, the Union "Gardeners of the Kuban" already proposed to Dmitry Patrushev to introduce quotas for the import of apples and plums during the harvest period. Such a measure will reduce the oversupply and will motivate retail chains to raise purchase prices for local fruits without raising the price on the shelf, the union explained.

In July 2019, Gardeners of Kuban, together with the Association of Nurseries and Gardeners of the Stavropol Territory of the Year, appealed to the Deputy Prime Minister with a request to limit the import of stone fruits and pome fruits to Russia in the third or fourth quarters, as well as in the first quarter of next year. They also asked for a significant increase in import duties on these products. They explained the need for such a measure by the fact that during the harvest period and until the end of the year, cheap products from Moldova and Serbia are massively imported into our country, while Russian producers, due to a lack of storage capacity during this period, are also forced to actively sell fruits.

In March 2019, the Committee of the Federation Council on Agrarian Food Policy and Environmental Management following the results of parliamentary hearings on the problems and prospects for the development of horticulture in Russia, among other things, recommended that the government instruct the Ministry of Industry and Trade to develop measures to protect the fruit and berry market from unfair competition from foreign producers. In particular, during periods of mass supply of domestic products (September-March), it was recommended to set the ratio of Russian and imported apples on the market at 60/40%.