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- Supply stakes: Russia wants to become one of the ten largest exporters of agro-industrial complexes
Supply stakes: Russia wants to become one of the ten largest exporters of agro-industrial complexes
The increase in exports of Russian agro-industrial complex (AIC) products to $55 bln by 2030 will allow the Russian Federation to enter the top ten largest food exporters. This was stated by Deputy Minister of Agriculture of the Russian Federation Sergey Levin at the strategic session "Russian Agroexport 2024-2025". To achieve this goal, he said, it is necessary to restructure production and business processes, as well as to increase the efficiency of export activities, primarily to increase the sale of goods with higher added value. How realistic these plans are and whether something can hinder them - in the material of "Izvestia".
Different directions
Since the implementation of the federal project "Export of agro-industrial complex products" supplies of food products abroad have more than doubled compared to the figure of 2017, in 2023 they reached $43.5 billion. Today, domestic agro-industrial complex products are exported to 160 countries, reported "Izvestia" in the press service of the Ministry of Agriculture.
"By tonnage, Russia is the third supplier of food in the world. This year's volume is 9% higher than the figure for the same period last year. Our country ranks first in supplies of wheat, barley, peas, oilseed flax and frozen fish, as well as leading positions in cereals and grain legumes in general, sunflower and rapeseed oils," the ministry said.
This became possible due to the state support measures, which cover the entire cycle of production and export: from analytical materials for the study of foreign markets to the promotion of products abroad. Plus, the foreign apparatus of agricultural zattashe, created by presidential decree in 2020, makes its contribution.
In addition, the Ministry of Agriculture, together with the Russian Export Center, holds offsite business events and business missions for agribusiness enterprises.
"TheRussian President has set an ambitious task - to increase exports of agro-industrial complex products at least 1.5 times by 2030 relative to 2021," the Ministry of Agriculture reminded.
Currently, a new federal project for the period up to 2030 has been developed, it should ensure the growth of production, competitiveness and recognizability of Russian products in foreign markets.
Harvest forecasts
The goal to increase exports of Russian agro-industrial complex (AIC) products to $55 billion by 2030 assumes an average annual growth rate of 3.44%, based on exports in 2023 of $43.5 billion, explained Anton Trenin, an expert of ACRA's Corporate Ratings Group.
- This rate is significantly lower than the average 14.3% for the previous seven years (2016-2023). "However, in the first 10 months of 2024, Russia exported $35.2 billion worth of food products and agricultural raw materials, which is 2.4% less than in the same period of 2023 ($36 billion)," he told Izvestia. - Forecasts for next year's harvest point to its decline, which could have a negative impact on future export shipments, as grain crops, particularly wheat, are the main commodities in the export structure. Thus, the required growth rate of 3.44% in 2024-2025 may not be achieved.
As a result, the growth rate will have to exceed 3.44% in the subsequent years. This will require active measures on the part of the government and business, as well as significant attention to marketing and promotion of Russian products in international markets.
- At the same time, an increase in exports of Russian agro-industrial products to $55 billion by 2030 will hardly allow Russia to enter the top ten largest food exporters. This is due to the fact that the countries in the top ten are already selling agro-industrial products worth more than $55 billion each. Moreover, the exports of the leading countries are constantly increasing. Taking into account the current export volumes and growth rates of other countries, the chances of entering the top 10 remain questionable," Anton Trenin noted.
Investments in the sphere
Vladimir Prokhorov, a member of the general council of Delovaya Rossiya (Business Russia), noted that the government has a special fondness for the Russian agro-industrial complex. A program of preferential lending to agricultural producers was created to develop the sector.
- In 2024 alone, about 300 billion rubles were allocated to subsidize such loans. An insurance function with state support has been created. Within the framework of the national project "Safe Quality Roads" it is planned to expand the road network in the regions," the expert told Izvestia. - Last year Russia took the first place in the world in wheat and barley exports, and this positive dynamics has been observed not for the first year. The country has a strong and promising agrarian potential, in which investments are flowing.
Atthe same time, starting from 2025, foreign investors are expected to return to the market, including those from unfriendly countries, who are attracted by Russia's growing GDP, despite the sanctions imposed on us, he said. Thus, the forecasts voiced by Sergey Levin do not seem so unattainable.
- However, it should be taken into account that the agro-industrial complex directly depends on weather conditions. If they are unfavorable, the volume of production and, accordingly, exports may decrease. At the same time, there is healthy competition in the market, but it is not protected from dumping. Sanctions processes can also reduce the growth rate of the Russian agricultural sector by imposing embargoes both on our products and on the agricultural machinery and components we need. We must understand that any favorable forecast is an opportunity and a goal for the state, but not a 100% guarantee, - said Vladimir Prokhorov.
Change of indicators
In the latest available rating of food exporters for 2022, Indonesia is in the 10th place with exports of $55.2 billion, Natalia Shagaida, Director of the Center for Agro-food Policy of IPEI RANHIGS, reminded Izvestia.
- Russia ranked 17th with a share of just over 2% - $41.6 bln. But countries are developing, so everything is not so obvious. For example, the growth of exports to Russia in 2022 relative to 2020 amounted to 36% in value, which can be considered a success, while in India, which was in 11th place, - 43%, - said the expert. - The main thing is not the place in the rating, but the fact that Russian agriculture has fulfilled its role in terms of increasing food self-sufficiency. It is important that the products were available and that the guidelines of the Doctrine on consumption for a nutritious diet were met. It is important that agriculture is carried out by methods that do not violate the requirements of the environment, and that rural residents who are engaged in agriculture have growing incomes.
Optimization of processes
There is a positive dynamic in the agricultural sector now, says Artur Leer, Vice President of the Association of Exporters and Importers. Along with the already existing growth, there is a high demand for products from friendly countries. According to the interlocutor, it is important to optimize internal mechanisms, providing support for entrepreneurs. The role of infrastructure also plays a significant role here.
- The importance of increasing value-added sales is particularly noteworthy," the expert added. - This requires an increase in domestic production capacity, which, in turn, will lead to an increase in exports.
Despite the positive trends, there are also difficulties in the agricultural sector, Leer noted. For example, domestic seed production was underdeveloped before the sanctions were imposed, and most of the seeds came from abroad. The leading positions of transnational companies are explained by high costs for research and training of specialists.
- However, seed enterprises are beginning to develop actively, and already this year we are switching to domestic seeds - in some positions the share of Russian seeds is 40-50%. This is an important step forward, and in the next 5-7 years this process will continue. Time will show how this will affect yields.
Import substitution in agriculture is a complex process covering all key areas: seed production, poultry farming and others, he emphasized.
- Sometimes difficulties arise not only in the field of exports, but also on the scale of countries. If we can offer more competitive prices for products, such as pork, and ensure stable supply volumes, it will open up new prospects," Arthur Leer concluded.
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