November 2, 2010
Drought offers Russia a chance to revamp farming
The damage caused to Russian agriculture by the country's worst drought on record could prove a catalyst for revamping farm policy, US officials have said, highlighting that current problems have ramped up meat production.
The impact of the drought had been worsened by the financial crisis which preceded it, which landed farmers with large amounts of debt, without a safety net of government crop insurance, or allowed the ownership of land against which loans could be secured.
"Decreased incomes and direct losses in 2010 aggravated farmers' financial status, and many of them will not be able to recover without serious government support," the USDA said.
The briefing also flagged a lack of reliable, unbiased statistical data on crops, with an official estimate of grain stocks at 26 million tonnes particularly doubted as being too high.
Furthermore, in rural infrastructure such as roads, reliable power, and storage facilities, Russia was lagging far behind Western nations, a weakness which will make recovery after the drought-year difficult and slow, the USDA said.
However, while 2010 had been a disaster for Russian farming, it offered a chance to make the changes needed to set the country on course for meeting targets for ramping up grain exports and becoming self-sufficient in meat.
"This crisis may provide an opportunity to make serious changes in the domestic agricultural policy if Russia wants to meet its food security targets," the USDA said.
"The government seems to understand the necessity, not only to support farmers in the difficult year, but to improve the support system and increase the efficiency and productivity of farming," they said.
While official data on the extent of this year's crop downgrade are not yet available, some forecasters have pegged it below 60 million tonnes, implying a fall of 40% year on year.
Separately on Monday, a Moscow-based analyst group had estimated grains output at 59.5 million tonnes.
Besides wiping the country from the list of major grain exporters, the drought has also caused many farmers to increase the slaughtering of animals, rather than risk attempting to keep them through the winter - a factor evident in a 7.3% rise in Russian meat production in the first eight months of the year.
The country's cattle herd, held largely in the hands of small farmers, had suffered particularly, with pig and poultry sectors suffering less thanks to a greater concentration of output in the hands of larger, more efficient producers.
Analysts on Monday (Nov 1) said that Russian cattle numbers were 3% lower in September than a year before, while pig numbers fell for the first time in 20 months.
The reduction would reduce to four million tonnes Russia's grain import needs over 2010-11, compared with a previous estimate of six million tonnes.
