Belarus 2020. Interview with Aleksey Bogdanov, Head of the Foreign Economic Activity Department of the Ministry of Agriculture and Food of the Republic of Belarus

DN: Alexey, please tell us about the program adopted by the Ministry of Agriculture and Food of the Republic of Belarus to promote and develop dairy farming in the country. What period is it up to?

AB: The State Program for the Development of Agricultural Business in the Republic of Belarus until 2020 or "Agribusiness 2020" is designed for 5 years and began to operate in 2016, and ends in 2020.

DN: The main goal of the program is to increase MILK production in the country from 7 million tons to 9 million tons, how is it planned to achieve an increase in milk production in the country? In your opinion, where should this amount of “new” milk go?

AB: It is planned to increase milk production to 9.2 million tons per year by 2020. In fact, we have very large reserves: on average, the Republic of Belarus in 2016 milked a little more than 4.7 thousand liters per cow . Already today we have raised the bar to 5,000 liters per animal. At the same time, many farms milk 8,000-9,000 liters, and some have crossed the line of 10,000 liters this year.

In our opinion, there is a huge reserve. The strategy is not to invest a lot of money in increasing the stock, but to work with the existing herd and genetics.

Further development of Belarusian dairy production will be carried out through the development of new resource-saving production technologies, increasing economic efficiency, updating the production base, modernizing livestock buildings, continuing work to increase the genetic potential of animals and improve the herd management system. Taking into account the achievements of world experience, together with continuous systematic work to improve the dairy cattle breeding of the republic, will give a new look to the country's animal husbandry, will increase the production of high-quality products to provide domestic and foreign markets.

It should be noted that even today in Belarus there is an animal identification system, more than 1600 dairy complexes have been modernized, which are equipped with modern milking parlors or robots. I would like to note that there are enterprises in Belarus that produce their own milking and stall equipment: Gomelagrokomplekt, Unibox, and Biocom Technology produces milking robots. We complete our dairy complexes with this equipment, and also supply them for EXPORT.

DN: Genetics, feeding - all on your own?

AB: The genetics of the herd of the Republic of Belarus allows you to get about 11 thousand liters per cow. We need to tighten up the systems of keeping, management and feeding. In addition, there is a human factor. The Ministry is doing a great job in this direction: it organizes seminars in all regions and districts; publishes educational and methodological literature, and both the minister and his deputies go to the farms. There are results - we are gradually increasing production. For example, over the past four years, the increase in milk in the republic amounted to more than 500 thousand tons. We will try by 2020 (ed. note - by the end of the Agribusiness 2020 program) to reach the target of 9.2 million tons of milk, through systematic work with people, with animals, through the right approaches, new technologies in keeping and feeding, structuring crop areas.

DN: When there will be an increase in volumes to 9.2 million tons of milk by 2020, where, in your opinion, will milk be exported?

AB: In Belarus, the average per capita milk consumption is 255 kg per year. And we produce 751 kg. per person. Self-sufficiency in milk is 230%. Already today we export 60% of the produced milk. We also plan to export the increase in milk, but to new markets. Both the government and the ministry have chosen the path of diversification as a strategic direction for export development. We are well aware that the Russian market is not bottomless, although we could fully provide it within the framework of the programs of the Union State.

In RUSSIA today there is a shortage of about 8 million tons of milk. Minister of Agriculture Alexander Nikolayevich Tkachev announced the figure of 7 million tons. In the annual volume, we supply 4.1 million tons of products to the Russian Federation in terms of milk . Russia imports another 3 million tons from third countries. Unfortunately, these are not always natural dairy products, but including the so-called milk-containing products, i.e. with the addition of a significant proportion of vegetable fats, such as palm oil.

DN: Please tell us about these countries. In addition to Russia, what other countries are important for you in terms of exporting products?

AB: In general, according to the results of January-August 2017, the export of agricultural products produced by enterprises of the Republic of Belarus was carried out to 52 countries. The prevailing part of agricultural exports goes to the CIS countries.

Our vector of export development, which implies market diversification, is directed to the countries of Southeast Asia, the Middle East and Africa.  

For eight months of this year, we have already increased the export of agricultural products to Africa by 6 times. Increased exports to Asia and Oceania by 2.6 times. Agricultural products were delivered to the Middle East 3 times more.

As for the supply of milk, such countries as Turkey, CHINA , Georgia, Oman, Qatar, and the United Arab Emirates are a breakthrough this year. Good job with Vietnam. For the Chinese market in 2016-2017, we certified 36 dairy enterprises, and the first deliveries started at the end of last year. To date, we have exported dairy products to China worth more than 5 million US dollars . Deliveries of dairy products increased by 72 times.

DN: Why do these countries choose Belarusian products, and, for example, not European ones?

AB: In the countries of our export interest, there is a wide range of products from around the world.

The fiercest competition in the global dairy market requires compliance with such high standards as quality and safety. Among other things, we are now actively working on creating the Made in Belarus brand for third-country markets. In Russia, there is high loyalty to Belarusian goods, Belarusian milk. We are trying to achieve the same in other markets. In addition, we have already developed a single logo for deliveries to the Chinese market.

DN: What kind of dairy products do you export?

AB: The main types of dairy products that go to the markets of third countries are butter, dry dairy products and whole milk products in the form of "long life", that is, ultra-pasteurized milk.

Now the ministry is guiding our commodity producers and exporters to expand the range of supplied goods. For example, Savushkin Produkt supplies not only exchange goods - butter or milk powder; but also curds, cheeses, a variety of whole-milk products. The rest of the enterprises also invest in the promotion of their products, trying to get on the store shelf. If we give our goods to a processor, then by and large Belarus remains unknown to the general consumer. As soon as we put a product on a store shelf under our Made in Belarus brand, people begin to try it, evaluate its quality and taste characteristics, and learn more about our country. This is the real work to promote the brand, namely among buyers. Two different approaches: it is one thing to trade with processors, supplying raw materials,

DN: Now world analysts point out two countries where milk production is growing - Poland and Belarus. Do you feel competition with Poland?

AB: We constantly encounter our Western neighbors, including Poland, in the markets where our milk ends up: often these are the CIS countries. In addition, we compete very tightly with each other in the markets of China and Vietnam. We compete less in the markets of the Middle East and Africa, because there is more of a raw material segment.

DN: Why is it beneficial for Belarus to join the Eurasian Economic Union?  

AB: Any integration process is always a new opportunity for trade in the first place. Today, the EAEU includes five states: Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan. This is a huge duty-free market where there are no borders. I think that this is beneficial for all members of the union and each country strives to receive certain dividends from participation in this integration entity. Belarus does not have oil and gas, but agriculture, industry, processing and services are developed. Therefore, of course, it is beneficial for us to promote domestic goods and services in our common Eurasian market, and we are not ashamed of it.

Despite the difficulties with the ROSSELKHOZNADZOR, we have learned to work within the union, increasing food exports many times over. Now we are working to ensure that the Eurasian Economic Commission will help the "five" countries (ed. note - Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan) to develop a common policy for exporting products outside the EAEU. To this end, a number of programs have been adopted, the main purpose of which is to support exporters, from the point of view of permitted measures that do not distort or affect trade: joint exhibitions, joint stands, joint scientific developments, branding, promotion of goods outside the union.

DN: Is there such a problem as leukemia in Belarus, or have you solved this problem?

AB: The problem of leukemia in Belarus was solved more than 10 years ago. Moreover, in a radical way: the entire leukemic population was destroyed, and completely cleared of this disease.

The main directions for the prevention of bovine leukemia in the republic are regular diagnostic tests, quarantine of imported animals, veterinary and sanitary examination of carcasses and internal organs during slaughter of animals.

DN: What are the requirements for raw milk in Belarus today?

AB: They are tougher than in the EU. For example, the allowable number of somatic cells for the “extra” variety is up to 300 thousand per 1 cubic cm. In the EU, up to 400 thousand are allowed. 100 mg.

In general, work to improve quality is ongoing and, if necessary, we are ready to respond to market demands and tighten certain indicators.

DN: You actively promote the export of MEAT products. How is this trend developing?

AB: We export 30% of all meat produced. Basically it is beef and poultry meat. We export about 135 thousand tons of beef per year. The Republic of Belarus occupies the 8th place in the world in the export of chilled beef, the 8th place in the world in the export of poultry meat - 145 thousand tons per year.

We export much less pork - about 4 thousand tons per year. This is due to the fact that in 2013 we had a problem with ASF in two districts, and a large number of pigs were destroyed. We have just restored the number of pigs to the level of 2013 and are starting to export pork.

The work and strategy of the ministry was aimed at developing not just the export of raw materials, for example, half carcasses or quarters, but entering the store shelf with finished products. And Belarus annually grows by about 30% -35% per year in the export of finished products: sausages, deli group, canned food, etc. In addition to the fact that Belarusian meat products are well known in the Russian Federation, we export meat to 12 countries of the world. These are all CIS countries, Vietnam, Hong Kong, etc. Now we are actively working on certification of our beef products for the Chinese market. In the future, we plan to open supplies of poultry meat to China. There has already been an inspection, experts have arrived, work is underway with documents. In addition, we are actively engaged in the certification of "halal" and "kosher" for the supply of beef and poultry meat to the Muslim market and the Israeli market.

DN: Is the market of Iran and the United Arab Emirates interesting for the export of Belarusian products?

AB: We are working with the Iranian Veterinary Inspectorate to obtain permission for products to enter the Iranian market.

The Ministry of Agriculture and Food of Belarus sees promising areas for the export of beef and butter. For information, Iran's annual import of beef is about 400 million US dollars, butter - 200 million US dollars.

We are also working to gain access to the UAE market and halal certification of meat and milk processing enterprises of the republic.

DN: In your opinion, how will this year end for the farmers of the Republic of Belarus?

AB: A very good year. Our main case is meat and milk in export and in production. All our crop potential is directed to the production of feed. This year Belarus has a very good harvest of grasses and grains. At the end of this year, we plan to harvest about 9.5 million tons of grain crops, including corn and rapeseed.

We also plan to increase the gross output of agricultural producers in all categories by 2.2% compared to last year, including in agricultural organizations by 4.3%.

The expected volume of milk production is 7.3 million tons, which is an increase of 2.8% compared to the level of 2016. Livestock and poultry products - 1.8 million tons, 2.8% more than in 2016.

These volumes will fully meet the demand in the domestic market and increase export deliveries. According to our estimates, exports of agricultural products and food in 2017 will increase by 6.5%.

DN: When 2020 ends and you reach the level of 9.2 million tons of milk, is there any further increase planned? What is the limit of milk produced in Belarus?

AB: It's a tough question. Today, we have the capacity to process 9 million tons of milk. This is not the limit. This volume will be achieved with a milk yield of about 7 thousand kg per cow. And if we step over the indicator of 7,000 and approach the average European indicator of at least 8,000 liters per cow, then the total production will increase even more. Therefore, we will move further towards the European average, and will consider the construction of new milk processing plants to ensure the processing of the entire volume produced.

DN: Do you plan to attract foreign investment?

AB: We plan to attract not only foreign investment. Powerful holdings operate within the country, having the means to invest in increasing their volumes.

This year, we signed an agreement to invest 1 billion US dollars in various sectors of the economy, including agriculture, with a Chinese corporation. Already today, in the Vitebsk region, an investment agreement has been signed with this company for the construction of a dairy complex for 40,000 dairy cows. In addition, the Ministry of Agriculture and Food is negotiating with a number of companies from the EU, China and the UAE on the organization of investment projects in the field of meat and dairy farming in the Republic of Belarus.

DN: Alexey, please tell us how you came to the Ministry of Agriculture and Food of the Republic of Belarus and to agriculture in general?

AB: I started my agricultural activities at Agrokombinat OJSC Dzerzhinsky, a large agricultural holding near MINSK, built on the basis of one of the largest poultry farms in Belarus. This is a vertically integrated agricultural holding, which includes a poultry farm, three agricultural enterprises, land of about 15 thousand hectares, its own feed mill and a premix production enterprise. I worked at this enterprise for 5 years: first as HEAD of the foreign economic activity department, then as deputy general DIRECTOR for trade and processing.

Then, for a little less than a year, I worked as deputy general director of the Meat and Dairy Company, then I was invited to work at the Ministry of Agriculture and Food as the head of the main department of foreign economic activity.

In our work, we try to achieve the maximum effect and make the Republic of Belarus a prosperous state that builds its foreign policy, as well as trade and economic relations with neighboring countries on the basis of mutual respect, good neighborliness and peace.

DN: Thank you very much for the conversation.