Is the Russian infrastructure doing well?

Infrastructure and efficiency : How Russia wants to regain trust at Green Week

The 15 men on stage really don't look like farmers. With their white suits and naval caps, they are more reminiscent of a group of sailors than agricultural entrepreneurs. The men sing Russian folk songs. They should ensure a good mood among the visitors in Hall 2.2. And somehow the image of seafarers fits in with the self-image of Russian agriculture these days.

The country took to the Green Week to open up new sales markets far from its own economy. Russia as a reinvigorated agrarian nation - that is the message. Just recently, President Putin announced that he wanted to double agricultural exports to around 40 billion euros by 2024. With more than 5000 square meters, the Russians have the largest stand at Green Week - for the second time since 2015. In the following years 2016 and 2017, the country was not even represented at the fair. But on the very first day of visitors this year, the staging went badly wrong.

The veterinary office closed the Russian hall for two hours

The Russian hall was closed for two hours. The veterinary office of Charlottenburg-Wilmersdorf discovered 20 welded sausages during a routine examination. The import of pork into Germany is prohibited to protect against animal diseases. And it got even worse: According to the Green Week, customs certificates were missing for another 280 kilograms of goods. That was a very unfortunate start: The Russian was once again the bad guy.

The Russian Ministry of Agriculture wants to achieve exactly the opposite with its appearance at Green Week. Companies that present the delicacies of the country and local music groups that perform traditional songs should give the visitor a positive image of the country and agriculture. But how credible is that?

Russian farmers present their products

The stand of the vegetable manufacturer Rost is rather sparsely furnished. Tomatoes and cucumbers are laid out on a small table in the aisle, otherwise the approximately ten square meter area is empty. Natalya Fedoseewa is behind the table, she takes care of marketing. “We operate four modern greenhouses in the east of the country,” she explains.

They are drawn in on a map of Russia in the background. Founded in 2013, the specialist in tomato and cucumber crops today employs over 1200 people. What can be observed on a small scale at Rost can be applied to the whole country.

Russian agriculture has developed enormously in recent years. "We benefited greatly from government subsidies," says Fedoseeva, "the import restrictions were also important to us." President Vladimir Putin imposed the latter in August 2014 in response to the economic sanctions imposed by the West following the annexation of Crimea.

German farmers in particular have been hit hard by the import restrictions on food. The exports of meat and milk collapsed. In Russia, the shelves were initially empty for a short time. After the collapse of the Soviet Union, the country was dependent on the import of food.

But Russian agriculture has caught up in many areas with substantial financial support from the government. Pork production in particular has risen sharply, says Linde Götz. She works at the Leibnitz Institute in Halle and has been observing the development of Russian agriculture for many years. Whereas in 2014 the degree of self-sufficiency was 83 percent, the country can now supply itself completely with its own pork. The import has almost come to a standstill.

In the case of poultry meat, too, domestic production can now cover consumption in the country, she notes. However, the situation is very different with the production of beef, which has been stagnating for years. The degree of self-sufficiency has even decreased slightly recently. “The production of beef is still closely linked to milk production,” explains Götz. "In 2018, 84 percent of the meat came from dairy cows, while only 16 percent came from specialized beef cattle." Exports are still at a very low level for all types of meat.

The largest milk producer in the country is a German

The country has been struggling with a supply gap in the dairy sector for years. The amount of milk produced has remained constant, while imports, for example from Germany, have ceased to exist. Within the industry, however, there is a trend towards large agricultural companies, so-called agroholdings, explains Götz.

The most successful agroholding in the dairy sector is run by a German. Stefan Dürr keeps almost 100,000 cows across Russia and produces almost 2,250 tons of milk every day. His company is represented at Green Week with the Ekoniva brand.

The ban on imports caused food prices to rise

Tatjana Gubina works for a competitor of Stefan Dürr, she looks after the booth of the dairy Galaktika from Saint Petersburg. Gubina has short blonde-dyed hair and is wearing a lilac-colored blouse. To her right are Tetra Paks with Russian inscription. She has seldom been able to win new customers at the trade fair in recent years. After all, the cost of getting there would be covered by the Russian Export Center.

This state institute supports Russian companies in expanding into world markets. Gubina also reports on the negative consequences of protectionist policies in the agricultural sector. “The prices for sausage, milk and other foods have been rising in Russia for years,” she says. Experts also complain about the lower quality of some products. Because milk fat is scarce, dairies use vegetable oils to make cheese, for example.

There are enough of them. After all, Russian agriculture has greatly expanded the cultivation of oilseeds in recent years. Rapeseed, soy and sunflower oil are also marketed across national borders. The most important export good, however, is by far the wheat, says Linde Götz from the Leibniz Institute. “At the beginning of the 2000s, the country was still a net importer. There is now no nation on earth that exports more wheat, ”says the scientist.

The potential of unused space is enormous. Important target countries for Russian wheat are on the Arabian Peninsula, Asia and North Africa. The Russian Federation is in direct competition with the European Union and the USA.

But there is still a lot to be done to keep Russian agriculture competitive in the future even without protective import restrictions. Apart from wheat, it cannot keep up with the prices demanded on the world market in many areas. Sergei Levin, Russia's Deputy Minister of Agriculture, wants to improve the country's infrastructure and increase production efficiency. Exports are also to be further promoted. To this end, Lewin wants to set up a network of agricultural representatives in 57 Russian embassies. This was reported by the Deputy Agriculture Minister at an event organized by the German Agribusiness Alliance as part of the Green Week.

The German Agribusiness Alliance is an amalgamation of German companies and associations from the agricultural sector. He coordinates cooperation with Russian partners on a private and political level. The event at Green Week also revealed the opportunities and problems that arise for German companies as a result of the growth in Russian agriculture. The import embargo for food is likely to remain in place in the medium term. That is why German companies want to supply the necessary technology, the seeds and efficient animal breeds.

German seed producers are disadvantaged

In some cases it is already working. The agricultural machinery group Claas has been operating a plant in Krasnodar since 2005. German seed manufacturers have also opened production facilities in Russia. Because they can only breed part of their portfolio there, the companies still have to import a lot. The bureaucratic hurdles for imports are far too high, they complain. In addition, their seeds would be unfairly disadvantaged if they were recognized by the Russian authorities. "What we want is planning security," said Peter Hofmann from KWS Saat.

It is not without a certain irony that the appearance of the Russians at Green Week was disrupted by the discovery of illegally imported food, of all things. In any case, it is certain that many products that visitors to Hall 2.2. are allowed to try, will probably not end up in German supermarkets anytime soon. The size of the stand obscures the importance of Russian agriculture in world markets. The country does not appear in the top ten of the most important agricultural exporters. And yet: The largest country in the world in terms of area has caught up.

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