March 28, 2012

Russia to develop milk processing in 2013-20

In order to develop milk processing in 2013-20, Russia plans to attract around RUB100 billion (US$3.4 billion) in investments, Agriculture Minister Yelena Skrynnik said Tuesday (Mar 27).

"Our target is the modernisation of the production base to cut costs and boost the quality of the final product. The volume of investments into the sector will amount to RUB100 billion (US$3.4 billion) from 2013 till 2020. About 64 enterprises will be constructed, including regional processing facilities, while 296 enterprises will be reconstructed," Skrynnik said.

As a result, the output of whole-milk products is expected to jump 20% by 2020, including a 30% increase in cheese production and a 40% increase in butter production.

The programme also provides for subsiding investment loans for the construction and modernisation of processing and logistics capacities to increase the overall quality, cut costs, and gain access to the retail trade.

Skrynnik said that Russian agriculture, for the first time in the last 20 years, boosted livestock numbers by 100,000 heads to 20.1 million in 2011. The share of breeding stock rose to 11.3% from 6.8%, while livestock for milk production increased by 20%.

The government's support of dairy production in 2008-11 amounted to RUB76 billion (US$2.6 billion), including over RUB22 billion (US$754 million) of direct investments and RUB54 billion (US$1.85 billion) worth of loan subsidies.
 

"In 2012, direct state support will amount to over RUB5 billion (US$171 million), with the volume of attracted loans amounting to RUB20 billion (US$685 million)," Skrynnik said.

Skrynnik also said the authorities plan to tighten sanctions for violations of milk and dairy product technical and sanitary regulations.

"The adjustments focus on protecting honest domestic producers and are under review," she said.

Russian farmers have complained of the widespread distribution of counterfeit products, in which dairy fat was replaced with vegetable fats.

According to an audit of retail chains, initiated by the Agricultural Ministry, over 50% of butter patterns, 60% of sweetened condensed milk, over 30% of sour cream and cottage cheese, and more than 70% of processed cheese do not meet production requirements. The Federal Antimonopoly Service has initiated over 10 cases in seven regions to halt further violations.