Experts: Russia's agenda in the global agro-industrial complex does not correspond to the global one

Our country has all the resources to obtain the status of a leading agrarian power

Russia has all the resources to become a leading agrarian power, although so far its share of the world market for agricultural products is about 2%. Dmitry Aveltsov, Acting Director of the Agricultural Analytics Center of the Ministry of Agriculture, spoke about this during the business dialogue “Ensuring sustainability: the contribution of Russian business to the development of global food systems” on the eve of the UN Food Systems Summit. The meeting was organized by the RSPP together with the Cherkizovo group. The upcoming Summit, which will be held in September in New York, will be an important step in the development of common international approaches to ensure the sustainable development of food markets, as well as addressing the global challenges associated with this. For the first time, the business community took part in the preparation of recommendations for the formation of a national position for the Summit.

According to Aveltsov, our country is already in the top four in terms of arable land with more than 100 million hectares, or almost 10% of the global figure. Russia also accounts for 20% of the world's fresh water reserves, it is in second place after Brazil in terms of the volume of dynamic water resources, Aveltsov listed. However, if we compare the current state of affairs in Russia with other leading countries in terms of arable land, it turns out that the value of agricultural products produced in China is almost $1 trillion, in India - $400 billion, in the United States  - $340 billion, while in us - about $ 85 billion, he cited the data. One reason for the low volumes is that Russiais located to the north of the listed countries, but Canada is located at a similar latitude with 38.9 million hectares of arable land, while due to the use of modern technologies and production culture, the average grain yield there is 40 centners per hectare, and in our country - 26 centners per hectare.

The next issue that Aveltsov drew attention to was the cost of exported goods. So, now Russia exports agricultural products for about $ 30 billion a year, while the United States - for $ 150 billion. According to him, the average cost of one kilogram of products delivered to foreign markets from Russia is $ 0.38, and from the USA - $ 0, 65. This indicator is extremely important, since the higher it is, the more value added in goods and the less logistics costs relative to the cost of the goods. At the same time, a kilogram of agricultural products from the Netherlands, Brazil and Chinacosts at least $1. “So far, products without deeper processing prevail in our export balance,” Aveltsov said. He also said that in the whole world over the year the average price of one ton of exported commodities increased from $228 to $385, that is, global prices increased by 60%.

Dmitry Aveltsov, Acting Director of the Center for Agroanalytics

We have a good margin in terms of crop production and processing. And we have a reserve at world prices, which are now growing and favorable for agricultural products. There is now a world window of opportunity that needs to be exploited.

In addition to promoting Russia's interests on the world market, the participants discussed the topic of sustainable production. According to Evgenia Serova, President of the Agro-Food Economics Analytical Center, Professor, Head of the Department of Agrarian Economics at the Higher School of Economics, stability in our understanding means growth of 3% per year, but in the global context, it is development today that leaves resources for tomorrow. “And our curse is that we have a lot of not only oil and gas, but also water - we do not feel the limitation of resources,” she stressed.

Speaking about the theses for a strategy to represent Russia's interests at the upcoming UN Summit, the participants of the meeting noted the problem that a traditionally limited group of countries forms the main agenda, which sounds beautiful, but is often far from real problems in global terms: people are still starving, resources are available not for all. And this situation is well reflected in the figures: in Europe, a person consumes an average of 83 kg of meat per year, in Russia - 76 kg, and on average around the world - 43 kg, the head of the National Meat Association Sergey Yushin cited the data.

Now a number of manufacturers from developed countries are actively lobbying for allegedly cleaner production, for example, with minimal use of antibiotics, reducing the carbon footprint. However, this will lead to a significant increase in the cost of agricultural products, and any unreasonable environmental restrictions are additional costs. According to Sergei Lakhtyukhov, director general of the National Union of Poultry Breeders, it is possible to produce products without antibiotics, but whether consumers are ready to pay several thousand rubles per kilogram of such poultry is a big question. “When people talk about the carbon footprint, comparing the indicators of the EU and Russia, the question arises: what problems does Russia have with this? Is there such an agenda in Russia as a carbon footprint? It is not there, but we are playing it, ”Yushin believes.

In general, according to the meeting participants, the agenda promoted by the UN on food programs is often far from Russian realities, but agricultural producers have to participate in it in order to be part of the global community now and in the future. For example, Lakhtyukhov said that the UN FAO is proposing a set of measures to stimulate the rejection of animal protein in favor of vegetable protein. Such proposals are unlikely to be relevant in Russia, experts say.

Now, according to Lakhtyukhov, the Russian agro-industrial complex is developing not so much in an extensive way, but through increasing efficiency. We need to introduce advanced genetics, animal health control and technologies that would reduce the overall need for land resources, he believes. However, only highly profitable agriculture can think about something "high". But how to achieve sustainable profitability if the very policy of the state contradicts these tasks, Yushin argues. “With what money to perform feats?” he asks.

Despite disagreements with world politics, Russia cannot go against it, since the work of our agro-industrial complex is now focused on exports, said Yury Kovalev, director general of the National Union of Pig Breeders. “It is very important not to run ahead of the locomotive and not go against it,” he emphasized. At the same time, Russia needs innovative technologies in all industries, and this requires money, therefore, it is necessary to be present on export markets.

At the same time, revenues have already fallen by 10% compared to 2013, while costs have increased by 18%, compared the general director of the National Union of Milk Producers (Soyuzmoloko) Artem Belov. “Profitability in business is falling, and the state wants everything at once. We ourselves make ourselves uncompetitive <...> when we impose restrictions on exports, and we can become a general's widow who flogged herself in order to live worse. By our actions, we are also creating instability in the global market, which undermines our credibility,” he added. At the same time, according to Belov, it is still worth thinking about the carbon footprint, so as not to end up in the same position as the Russian fuel and energy complex with a carbon tax in the EU.

“We say that our agenda does not correspond to the world one, but how are we going to dictate our agenda? After all, this is ensuring the presence of our food and business in foreign markets,” Dmitry Krasnov, head of the Agroexport center subordinate to the Ministry of Agriculture, asked. According to him, it is precisely access to foreign markets that often solves the issue of financing agro-industrial complex projects: without an international stable program and markets, it will not exist.

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In foreign markets, the rules of the game are set by companies that develop different standards for each country, said Konstantin Korneev, executive director of Rincon Management. However, they need to be streamlined, and Russia, as an international player, should take part in their formation. In addition, he drew attention to how our country treats domestic products: literally every day there is news in the media about the high content of antibiotics, growth hormones in meat and mice in sausage. In his opinion, it is worth starting to respect your agricultural products and promoting this position.