The State will have to Be More Pro-Active in Stimulating Investment Processes in Agriculture

26 december 2017 | RIA Novosti

"2017 made it clear that the country's logistics infrastructure simply cannot handle super big harvests both in terms of deliveries and in terms of storage of grains," Analytical Center expert Elena Razumova told a RIA Novosti correspondent.

Elena Razumova
Elena Razumova
Department for Expert Analytics

According to the expert, agricultural companies have for many years been talking about how the dependence on foreign-sourced means of production in Russia's agriculture is a major cause for concern.

Ms. Razumova also said it was possible that falling returns in the key agricultural sectors such as grain, oil, and sugar production might also become a problem. "In order to prop up the sector the state will have to be more pro-active in stimulating investment processes, which boost the efficiency of agriculture," the expert noted.

In addition, despite the measures that have been put in place to grow exports, the bulk of the Russian agricultural companies are still focused primarily on the domestic market that is hardly growing, Ms. Razumova noted. "It goes without saying that supporting domestic demand is a much bigger task that agricultural products are just one facet of," the expert is convinced.

Agricultural output is on the rise in Russia and there are no reasons for it to curtail, experts note. Next year the government plans to keep the funding of the agricultural sector at the same level as this year or RUB 241.986 billion. If grain exports keep pace with it, the country's sure to have at least one record.

For the time being the Ministry of Agriculture prognosticates a grain harvest of 110.6 million tonnes in 2018, a most appreciable figure. On the other hand, if Russia has a series of big harvests several years in a row it may end up facing decline in grain prices, which, in turn, may reduce the profitability of Russian agricultural companies.

Source: RIA Novosti

Photo: from open sources