September 7, 2011


Russia recommends US$230 billion agri investment



Russia's farm ministry presented a draft plan to raise grain output and exports, as well as become an exporter of pork and poultry meat, with US$230 billion budget by 2020.


According to Reuters, the ministry's website stated that two thirds of the amount proposed by the state programme draft for 2013-20 agricultural development will be expected from federal and regional budgets.


The draft has yet to be agreed with other government ministries and approved by the government.


Under the draft, Russia, as last year's third-largest wheat exporter, will aim to increase grain output to 125 million tonnes in 2020 from 85-90 million tonnes expected this year.


The exportable surplus would rise to 41.5 million tonnes from 20-23 million expected in the current season. Russia has lifted a wheat export ban imposed after drought slashed last year's harvest.


For this purpose, the ministry plans to increase sown area to 50 million hectares from the current 44 million and average yields to 2.5 tonnes per hectare from two tonnes.


It also plans to build new grain storage capacity and deep sea export terminals on the Azov, Black and Baltic seas and on Russia's Pacific coast.


Currently, Russia has only two deepwater export ports, Novorossiisk and Tuapse. Significant volumes are moved via small river ports either directly to buyers, or reloaded on the open sea onto larger vessels.


"Exports should be increased to countries of the Asia-Pacific, Africa, Latin America and Europe," the draft said.


The draft said that being a major meat importer, Russia should double output to 14.1 million tonnes by 2020, mainly poultry and pork.


The draft expects that by 2020, exports of poultry meat may be 400,000 tonnes and of pork 200,000 tonnes.


It said, currently domestic production covered only 73% of consumption with the rest covered by imports.


The draft said Russia should increase poultry output to 5.8 million tonnes in 2020 from 2.8 million tonnes in 2010, pork output to 4.53 million tonnes from 2.3 million and beef output to 3.15 million tonnes from 1.7 million tonnes.


The draft envisages switching to import tariffs from tariff quotas after domestic products reach "sufficient competitiveness", without specifying when this may happen.


Russia regulates meat imports with tariff quotas, under which suppliers may ship determined volumes at a discount import tariff.


Russia is rapidly developing poultry and pig- breeding and has said it should reach self-sufficiency in the next three years.

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