How the agro-industrial complex was tempered. Representatives of unions and associations voiced key industry problems

Effective development of agriculture without the active participation of the state is impossible. Only with the help of state support and interaction with relevant departments can we cope with the challenges that the industry faces. Representatives of key unions and associations told the Agricultural Technology and Technologies magazine about what kind of help companies need to solve current and long-standing problems, as well as about the results of last year and expectations.

General DIRECTOR of the National Union of Pig Breeders Yuri Kovalev

In 2023, domestic pig farming continued to develop successfully, as in the previous 15 years. Total pork production was about 6 million tons in live weight, which is 5% more than in 2022. At the same time, it is important to note the stabilization of the situation after 2022, when severe devaluation and disruption of logistics supplies of foreign veterinary drugs and feed additives (the price of which sometimes doubled) negatively affected the industry. All these issues have been resolved.

The fourth quarter of 2023, when a number of significant events took place, became the most important for the industry. Thus, fifteen-year restrictions on exports to CHINA were lifted , a protocol on the possibility of supplies was signed, and Russian enterprises were certified.

Since 2020, we have achieved 100% pork self-sufficiency, we have virtually no imports, and the domestic market in currency terms is one of the cheapest, so the future direction of the industry is export-oriented.

In 2023, we exported almost 275 thousand tons of pork worth $600 million, but further growth was impossible as we reached maximum EXPORT volumes in existing markets. About 40% was sent to the countries of the former USSR, of which the lion's share was Belarus, another 40% to the countries of Southeast Asia, especially Vietnam . Therefore, China is a big step forward. But we must understand that this market is very difficult. The fact is that the Celestial Empire imports about 2.5 million tons per year, and all the key players are present on its market. It will be good if over time we manage to borrow 5-10%, which will mean exporting another 150-200 thousand tons to the existing volumes. We are faced with the task of becoming one of the top five global pork exporters (currently we are only one of the top five producers).

Among other positive aspects, I would like to note the effective interaction with the Ministry of Agriculture and ROSSELKHOZNADZOR. Of course, not all of our proposals find support, but on fundamental issues, such as regulation of the domestic grain market and the adoption of a law on animal by-products, we see it.

From the plans, it can be highlighted that in 2024 the identification of animals will be completed and a national system of breeding resources will begin to form.

Among the problems I would like to mention is the personnel issue, although this is a headache not only for pig farmers. In order to retain personnel from moving to other areas, wages at industry enterprises were significantly increased in 2023.

General Director of the National Union of MILK Producers Artyom Belov

The year 2023 began not easy for the dairy industry - with a decrease in demand, an increase in the volume of stocks of dairy products, a decrease in the price of raw milk , but the end of the year was relatively comfortable - demand and profitability in milk production and processing were restored. Thus, the increase in commercial milk production last year was about 4%, which is 850-900 thousand tons.

An important positive step was the state’s decision to subsidize 100% of logistics for a number of items. As a result, for example, the production of milk powder increased almost 3 times, and whey - more than 2.5 times. This approach quite seriously allowed us to increase export volumes and enter the markets not only of the post-Soviet space, but also of Africa, the Middle East and Asia. The growth rate of exports in physical terms was about 18%, 80% of which was in the post-Soviet space, and about 20% in non-CIS countries.

If we talk about food security, today RUSSIA and Belarus cover their needs by 100% (without Belarus about 85-86%). Moreover, for traditional and fermented milk products (yogurt ,cottage cheese ) our level of security is 100%. But even more important is the dynamics of production growth.

There are, of course, certain issues related to logistics restrictions and increased implementation time for investment projects, but in general investors look positively at further development. Investment activity, which has been lower than usual over the past couple of years, is beginning to recover. All this allows us to hope that 2024 will be just as favorable.

General Director of the National Union of Beef Producers Roman Kostyuk

In 2023, the negative trends of the previous year continued - a reduction in the number of specialized cattle for feedlots. To a large extent, this was caused by the offer of processors to reorient themselves to cheap block beef from Brazil, as a result of which price competition can now be seen. Total imports are approximately 300 thousand tons, of which a third is duty-free import from Brazil (about 90 thousand tons).

With our domestic MEAT consumption at 2 million tons per year, such a volume cannot have a significant impact on the market. But purely psychologically, this has a negative impact on investment decisions. If the government opens up imports so easily, does it make sense to invest in projects that will break even in eight years?

There are also questions regarding government support. Incentive support for the industry from the government is advisory and optional. Regions are required to have three mandatory programs, but beef cattle breeding is not included there; it is chosen on the initiative of the regions themselves, and therefore, local departments have to be convinced of the feasibility of developing this area.

But this is not the only problem. After all, even if the program for the development of beef cattle breeding has food security as its guideline, this is unlikely to change the situation. The goal should be to improve the welfare of farmers through the development of small-scale production.

Executive Director of the Union of Russian Potato and Vegetable Market Participants (Potato Union) Alexey Krasilnikov

According to the Ministry of Agriculture, in 2023, 8 million 571 thousand tons of potatoes were produced in the commodity sector. One could be happy about this if the reduction in the purchase price did not have such a negative impact on the industry: the average wholesale price, depending on the region, fell by 20-30%, and amounted to 9-10 rubles / kg.

Among other trends, it is worth mentioning the decrease in potato production in private household plots. Despite the lack of official data, we see that it decreases annually by 500-600 thousand tons, and recently this figure has reached 1 million tons.

At the same time, in 2023, projects for processing potatoes for various purposes were announced and are in various stages of implementation in the Moscow, Leningrad, Kaliningrad, Tula, Oryol and Lipetsk regions and Volga regions. If our forecasts come true, then processing in the medium term will increase from 1.5 million tons (in 2021) to 2.5 million tons. It is

also impossible not to note the improvement in the quality of the seed fund, the increase in the level of technology (including the development of land reclamation), which made it possible to obtain a higher yield while maintaining the volume of areas under potatoes in 2023. It is equally important that last year a federal project began work aimed at developing the production of potatoes and vegetables in open and protected soil. Within its framework, about 4.5 billion rubles were allocated to support the industry, excluding funds from regional budgets. And all these funds are “labeled”, and therefore cannot be directed to any other needs. Despite the fact that the first results of the program will only be visible in the spring of 2024, there is feedback from manufacturers that this measure is already working.

We also note that against the backdrop of individual measures by the government and the Ministry of Agriculture regarding restrictions on imports and localization of seed material, preliminary applications from supplier companies are indicated at the level of 2.8 thousand tons, against the annual average of 11 thousand tons.

Among the innovations of 2024, it is also worth noting the launch programs to compensate for the costs of building potato and vegetable storage facilities.

At the same time, it is felt that in certain areas state support is narrowing. For example, if previously, within the framework of the federal scientific and technical program (FSTP), money for production needs was allocated in advance, then from 2024 the rules have changed: program participants must first develop varieties, build selection and seed centers at their own expense, and only then the state will make compensation expenses incurred.

As for the harvest prospects , we believe that the sown area should remain at the level of the current season, gross production in the commodity sector will also, we hope, remain at the level of 7-8 million tons. This volume is necessary to load the processing capacities, which are currently at construction and launch stages.

General Director of the Association "Greenhouses of Russia" Natalia Rogova

Despite the introduction of sanctions, protected soil in Russia continues to develop. Thus, in 2023, the area of ​​winter industrial greenhouses was increased and amounted to almost 3,300 hectares. More than 1.6 million tons of vegetables were grown in them, which is 1.1% higher than in 2022. Including the harvest of cucumbers amounted to about 861 thousand tons, and tomatoes - 679 thousand tons. Self-sufficiency reached about 77%.

The leaders in the production of greenhouse vegetables at the end of 2023 were: Lipetsk and Moscow regions, Krasnodar and Stavropol territories, Kaluga, Volgograd, Belgorod, and Novosibirsk regions, the Republic of Bashkortostan, as well as the Chechen Republic. They account for 49% of the total vegetable production in the country.

But there are also difficulties. Among the main ones are the high cost of energy resources (today their share in the structure of costs for the production of 1 ton of vegetables is more than 30%), seeds, fertilizers, etc., accordingly, there is an increase in production costs. As a result, the purchase price for tomatoes and cucumbers increased by 10-15%. Also in 2023, farms faced the problem of labor shortage due to the outflow of migrants.

Chairman of the Council of the National Seed Alliance Association Igor Lobach

2023 for our industry can be characterized as more positive than negative, although, of course, the situation was different for agricultural crops. For example, for sunflower seeds it was favorable, but for corn seeds there was a significant overproduction, coupled with an increase in cases of counterfeiting in a number of regions.

At the same time, most market participants note the lack of adequate statistics on seed production volumes. There is no understanding of who produces what and what kind of reproductions, and this makes it difficult to build relationships between producers and buyers.

The problem remains the reform of the selection and seed production system, which has not adapted to market conditions. Many producers still believe that their task is purely to breed a variety, and not to comprehensively promote it on the market.

In addition, I would include continuing problems with spatial isolation, the absence of a normal royalty payment system, and an unexpected attempt to increase VAT on treated seeds to 20% among the difficulties of 2023.

On the positive side, it is worth noting that we have taken quite a stable position in seeds of protected soil vegetable crops, and there is an understanding of how to achieve food security criteria. We, as an association, for our part have already prepared a road map in this direction.

I would also like to note the operational work of the Ministry of Agriculture of the Russian Federation. We put the solution to the problem of increasing VAT for discussion in February 2023, serious progress was already made at the end of July, and the final decision was made at the end of October. In 20 years of working in the industry, I have never seen such a rapid pace of work. But everything related to interaction with the ministries of the economic bloc, including the law on seed production, is extremely difficult.

Executive Director of the National Feed Union Sergei Mikhnyuk

2023 was quite productive for us. Among the positive aspects, it is worth noting that the market has managed to adapt to the new round of logistics and price challenges in 2022.

It is also worth noting the active work of government agencies. For example, in the summer of 2023, our appeal to Rosselkhoznadzor was positively considered within a week. As a result, more than 50 items were added to the list of European feed additives permitted for import. An increase in their list by 13% significantly expanded the potential capabilities of importers.

But there were also difficulties. Thus, in 2023, the appearance of feed additives on the Russian market, the nature of which is not clear, has become more frequent. We are talking, first of all, about feed additives of the “commodities” category made in China. Questions were also raised by the low supply price and the inability to buy these lots on the open market.

Another difficulty can be called the inaction of the supervisory authorities of a number of European countries, which allowed the shipment of regulated products towards Russia. If we talk about deliveries from the eastern direction, then the main problem here was the speed of movement of consignments between the manufacturer’s warehouse and the importer’s warehouse.

Chairman of the Board of the Union of Organic Farming Sergei Korshunov

2023 was difficult both from an economic and climatic point of view, but the participants of our union passed it relatively successfully. The number of producers of organic products increased by 18% compared to 2022 and reached 17, and many producers of biological plant protection products and seeds received confirmation for the use of their products in organic farming.

It must be said that last year regional support measures showed effectiveness. We are talking about subsidizing 100% of the costs of certification of organic products and 50% of the costs of producing biological means of plant protection and nutrition in the Voronezh region, as well as hectare-by-hectare support in the Republic of Udmurtia. In these same regions, for the first time in Russia, organic products were included in government procurement for children's, school and preschool nutrition.

But the main thing is that in 2023, the state strategy for the development of organic production until 2030 was adopted and an action plan for its implementation was developed. In the same year, as part of the Nevsky Ecological Congress, we, together with Roskachestvo, held an organic products fair, in which more than 50 organic producers took part.

The year 2024 also started positively: in Ugra, it was simplified to receive subsidies, and producers and processors of organic wild plants had the opportunity to take out a preferential loan. Also, thanks to the support of the Department for Socio-Economic Development of Rural Affairs, subsidies for training in organic agriculture at the Tomsk Institute of Personnel Retraining and Agribusiness (TIPKiA) have been extended. But there are regions where support measures have been adopted, but in fact organic producers do not receive them. For example, in the Krasnodar region.

However, there are also problems. Globally, this is a decline in household incomes. If we talk about the factors hampering the development of the industry, then these are the lack of federal support measures, a change in sales markets for exporters and a low level of awareness of Russian consumers about organics. Most of them simply do not distinguish organic products from farm products, and the prefixes “eco”, “bio” and “organic” are the same for them.

Executive Director of the National Association of Turkey Producers Anatoly Velmatov

In 2023, Russian turkey farmers, despite a number of extremely negative factors, produced 418 thousand tons of products (414.6 thousand tons in 2022). Companies had to survive under sanctions pressure, restrictions on the supply of breeding material from abroad, an outbreak of avian influenza and rising costs of production components.

However, despite the difficulties, the industry showed growth. Moreover, due to the increase in consumption of highly processed products, the demand of processors for turkey meat has increased significantly - they began to use it instead of beef to expand the range of halal products.

In addition, the active interaction of the association with state and regional authorities made it possible to achieve supplies of turkey meat for law enforcement agencies in 2023. There has also been a positive trend of including turkey in the diet of children, school and social nutrition. In addition, it was possible to increase the limiting value of the cost per unit of power (bird-place) for second-order reproducers.

Throughout last year, industry enterprises operated at full capacity, and stocks in warehouses in recent months were practically zero. At the same time, product prices showed the smallest increase in the entire meat group and made it possible to contain the increase in the cost of beef, pork and lamb.

In 2024, the association predicts the volume of turkey meat production at 435-440 thousand tons, which is 5% higher than the volume of 2023. There are plans to implement large investment projects aimed at further increasing production and breeding material in 2024-2025 (will be implemented by Damate Group of Companies in the Penza and Rostov regions, Donskaya Turkey in the Voronezh Region, PC Yuzhny in Ingushetia, Virt Group of Companies "in the Altai Territory and others). However, the implementation of these projects will largely depend on the level of the loan rate and measures of state and regional support.

Executive Director of the Oil and Fat Union of Russia Mikhail Maltsev

Last year, the volume of vegetable oil production increased by 15% and reached 9.3 million tons, becoming a record. Almost 7 million tons of sunflower oil were produced, more than 1.4 million tons of rapeseed oil, and about 1 million tons of soybean oil. In addition, meal production increased by 14% compared to 2022, amounting to more than 12.3 million tons.

Last year was also a record year for export volumes. In 2023, Russia exported fat and oil products by 33% more than in 2022, and the total volume of products sent to foreign markets reached 11.1 million tons. The export volume of vegetable oils amounted to 6.54 million tons: of which a record 4.3 million tons belong to sunflower oil. The export of meal was recorded at 3.9 million tons, which is 0.9 million tons more than in 2022.

The closing of the “grain deal” was especially positive for the industry. Dumping by Ukraine on the sunflower oil and meal market put a lot of pressure on prices in the Black Sea region.

In general, speaking about problems, one cannot fail to note the difficult situation in foreign markets. Since our industry is export-oriented, almost half of the products produced are sent abroad, where today there is a fall in world prices for vegetable oils, and where Russian exporters have to overcome logistics barriers. Having reached peak values ​​in April 2022 (sunflower oil - $2100 per ton, palm oil - $1700 per ton), world prices began to fall rapidly, and throughout the past year we observed a decrease in prices for 4 main types of vegetable oils. As a result of the “grain deal,” the cost of sunflower oil dropped especially significantly—by more than 2 times. Last spring it was even cheaper than palm oil, which has never happened before. It was only in the summer that prices began to rise, and after the “grain deal” was closed, a fair spread between sunflower and palm oil began to be restored. But, despite all the negative factors, oilseeds still remain the leaders in margin among other crops in crop production. So, in our opinion, the area under oilseeds will expand.

Also in 2023, the process of industry consolidation began; significant mergers took place in the market (“Rusagro” and “NMZhK”, “Tkachev Agrocomplex” and “Yug Rusi”). In addition, it is important to note the acquisition of business from the American agro-industrial company Bunge - a butter factory in the Voronezh region by the ExOil Group holding. The consolidation and strengthening of industry market players will have an even stronger impact on the market situation.

Chairman of the Board of the ASHOD Association Alexander Altynov

The situation we are in, I think, will last in 2024 and 2025. At the Agros-2024 exhibition, it was announced that the production of Russian agricultural machinery over the year increased by 8%, but it is unclear how this figure could have appeared: production volumes of most factories were falling all year, and the growth of Rostselmash, even with a low base, could hardly cover this .

The industry needs new incentive tools, but the 1432 program is already 11 years old, and during this time, although it supported sales, it did not solve any significant systemic problems.

Today, manufacturers are faced with the task of technical sovereignty, but is it needed for all areas? For example, a self-propelled beet harvester is a machine that international companies spend 10-15 years developing. But it's not even a matter of time. For real sovereignty, we need to resolve the issue with machine tools and understand whether we want to have technical sovereignty in machine tool industry, or will we continue to purchase them from China? Next, we will have to resolve the issue of alloys, since metallurgical companies may not be interested in producing them in such insignificant volumes as are needed by the domestic agricultural machinery industry.

Of course, factories are being built, but the process of creating machines is not fast, and the situation right now does not help - farmers need to work on something. Against this background, the state is concerned with the issue of Chinese agricultural machinery, which is rapidly filling the vacated niches. And here we must understand that farmers do not have any special alternatives. Domestic factories, in the best case, will begin to produce volumes in 2025, and China can already begin supplying models with 300-400 hp.

However, there is one significant point that adds opportunities for Russian manufacturers that have not yet been fully exploited: few Chinese manufacturers have done anything significant in terms of after-sales service, but given the fact that the equipment is still new, this issue is not so pressing.

Director of the PROGRESS Union of Industrialists Dmitry Frolov

Despite the challenges of the time, the PROGRESS Union of Industrialists notes that in 2023 our members introduced new models of equipment into mass production, launched production facilities, assumed additional obligations for warranty service, and actively carried out rationalization work and improved the quality of technology.

For the industry, the year passed under the slogan “Let’s bypass sanctions through alternative supplies from the east” and “Work fruitfully in conditions of increasing costs of working capital.” The main challenge in 2023 was a sharp decline in the financial capabilities of agricultural producers due to rising production costs and falling wheat prices last year. Agriculture in our country has experienced perhaps the most difficult times since the beginning of the millennium.

Press service of the Rosspetsmash association

By 2023, Russian manufacturers of agricultural machinery had already resolved the issue of switching to domestic components and components from friendly countries, but the market was significantly affected by the situation with declining incomes of farmers. Low prices for agricultural products, as well as export duties on grain, led to the fact that agricultural producers often purchased agricultural equipment “on a residual basis.”

In addition, in the first half of 2023, funding for Program 1432 was sharply reduced from 8 to 2 billion rubles. This immediately affected the domestic market: there was a 20-30% reduction in the production of trailed and mounted equipment, and agricultural tractors by 7%. Moreover, given the difficult financial situation, farmers could not count on the usual discounts of 10-15%.

A timely and effective decision on additional financing of Program 1432 as part of the plan of the Ministry of Industry and Trade and the Ministry of Agriculture for their acquisition made it possible to change the negative dynamics in the production segment of agricultural tractors. In the summer, shipments of Russian tractors began to increase slightly. And in the fall they were already growing at double-digit rates, which smoothed out the negative dynamics of the first half of last year.

But a serious increase in the production of Russian combines in 2023 was due to the low base of 2022. Then, due to the process of reorientation to new components, the production of these machines had to be suspended for some time.

It is important to note that in its statistics, the Rosspetsmash association classifies as Russian agricultural machinery only those machines whose production involves a cycle of technological operations that meets the requirements of government decree No. 719. This means that agricultural machines that are assembled in Russia in the “screwdriver assembly” mode , are counted in these statistics as foreign.

If we talk about state support measures, then last year once again demonstrated that Program 1432 is a fundamental mechanism for the successful process of modernization of the agro-industrial complex. A decrease in its funding almost immediately leads to a reduction in the ability of farmers to purchase new agricultural equipment. After all, discounts on cars can be used simultaneously with preferential leasing or preferential loans. This combination of support measures helps reduce the financial burden on farmers.

In general, from 2013 to 2022, investments by Russian factories in production development, along with the implementation of Program 1432, allowed us to achieve impressive results. During this period, the production of agricultural tractors in Russia in quantitative terms increased by more than 20 times, sprayers by more than 5 times, plows and harrows by more than 2 times, and grain harvesters by more than 60%.

If in 2013 one of the active participants in this program, the St. Petersburg Tractor Plant, produced hundreds of tractors, then in 2022 it has already produced about 4,300 machines.