June 13, 2012

Russian pig farming requires more funding according to minister

According to Russia's Minister of Agriculture, Nikolay Fedorov, the current pig farming support programme is inadequate and the country should invest more in the industry in the coming years.

"Russia's WTO accession will require investment in the pig industry to the amount of RUB140 billion (US$4.66 billion) over the next two to three years. If we don't do that …by 2020 the industry will become uncompetitive and domestic pork producers will be supplant by Western business", Nikolai Fedorov said at the Collegium of the Ministry of Agriculture.

"This is a serious threat that we must anticipate and take appropriate actions," the minister added.

"Despite the fact that the industry is reviving after its collapse in the early 2000s, only 20 pig enterprises in the country are able to truly compete with foreign producers in terms of cost of their production. Today, almost 40% of pork in the country, and some say that even more, is produced in private farms without the use of modern technologies," said the minister.

Qualitative reconstruction of the industry is possible only through large-scale investments, the creation of new businesses and updating existing businesses, the minister pointed out. In his opinion, it is also necessary to take a number of measures to protect domestic producers in terms of Russia's membership in the WTO.

In addition, the Ministry of Agriculture in cooperation with the National Union of Breeders, is developing proposals to stimulate the construction of processing complexes and deep processing of pork with a total capacity of up to two million head per year.

The industry expects the growth of imports of pork and fears for the fate of agricultural holdings as well as private farms with Russia's joining the WTO. This was recently announced by the general director of the National Union of Pig Breeders Yury Kovalev. He has called for either renegotiation of the WTO terms of entry for Russia or the use of enhanced protective measures against imports of pigs.