Deputy Head of the Department for Expert Analytics of the Analytical Center Elena Razumova talked about the situation in Russia’s agricultural sector in a live interview for RBC-TV. According to the National Report on the Implementation in 2015 of the State Program for the Development of the Agricultural Sector, the growth in agriculture may slow down this year, with output expanding by no more than 1% as opposed to 3% it gained in 2015.
Russia reaches self-sufficiency in production of poultry and pork
"One of the problems in agriculture is the shrinking domestic market: because of the difficult economic situation, consumption is slumping, people are spending less," the expert said. "Another problem is restricted access to foreign markets. On some key positions, for example poultry and pork, we have already reached self-sufficiency in terms of output but we have not been able to find other markets to sell to so there is no room for growth." The situation with beef is more complicated because it is more expensive for the end consumer and it takes longer to breed cattle, Ms. Razumova explained.
"With regards to essential groceries such as poultry and pork we have reached the full import substitution threshold in the short term." In the long term we are capable of hitting import substitution targets for vegetables and milk. However, with some groceries, we simply can not produce substitutes, for example nuts," Ms. Razumova said. As far as the situation with, say, apples, is concerned, in that field long term investments are needed to make sure all apple trees begin to produce apples and it is going to take about 4 years, according to Ms. Razumova. The state plans to allocate subsidies, but it is unclear whether business is going to invest in this sector because of the risks that any long term investments are exposed to due to the embargo, the expert noted.
She believes that after Russia imposed an embargo, Russian consumers suffered because of the closure of markets. But there are some positives about the current situation. "We have freed up a lot of markets for milk, meat, vegetables, and fruits. For example, we are already seeing an increase in the output of cucumbers and tomatoes. However it is going to take some time before we see the full result," Ms. Razumova pointed out.