The VegKult Forum: discussion of the major challenges for vegetable farming in Russia

7 April 2017

The 3rd International Horticulture Forum welcomed over 1,500 participants.

The following issues were discussed during the forum: governmental support for the horticulture sector; processing aspects and infrastructure for the sales of vegetables and potatoes; the work of genetic and vegetable breeding centres.

The most significant event was a plenary meeting on the subject of “Vegetable farming in Russia: post-sanctions period”. The spokesmen discussed 5 major challenges to the development of vegetable farming in Russia: re-export of vegetables, import of vegetables of questionable quality, energy expenses, market capacity and marketing margin.

Andrey Vorobiev, the Governor of the Moscow Region, emphasised the fact that the amount of investments in his region in protected and open-air horticulture exceeds several billion roubles.

He said that certain decisions which improved the development of horticulture and general agriculture had been taken during the last years. “Our goal is not to have all those efforts wasted,” he said. 

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The imposed sanctions motivated the investors and offered a perfect opportunity to capture the market niche which appeared today. During the last 2 years imports decreased from 2.5 million tons to 1.1 million tons. We think that our vegetable farming industry should better use the opportunity to increase the volume of production, said Dzhambulat Khatuov, the first deputy Minister of Agriculture of the Russian Federation.

In his opinion, the primary goal for the next few years is to saturate the Russian market with domestic products and to make them competitive in markets abroad.

Denis Butsaev, the Deputy Chairman of the Moscow Region Government, the Minister of Investments and Innovations in the Moscow Region, described the major tasks the industry faces today.

“The same fair and equal conditions should be applicable for all the market players. Today there are some import channels which are used to avoid custom fees and taxation. This market situation is bad for domestic manufacturers, including those in the Moscow Region. The government is to improve competitiveness of domestic products and to make the industry sustainable,” said Denis Butsaev.

Statistical data from Belarus show that last year Russia imported 81,600 tons of potatoes from Belarus. At the same time the data of Rosselkhoznadzor show that 212,500 tons of potatoes were imported to Russia from Belarus. Experts think that during transportation vegetables and fruit from Belarus were partially replaced with the goods subject to sanctions.

At the plenary meeting price policy in retail chains was also discussed. Following the monitoring results, the average selling price for cucumbers with the Moscow Region manufacturers is 91 roubles, while the price for the same cucumbers in retail chains is up to 215 roubles.

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Sergey Dankvert, the Chief of Federal Veterinary and Phytosanitary Monitoring Service, said that it is the task for the Ministry of Agriculture of the Russian Federation to establish the system of functioning for the vegetable sales market.

The three major requirements to the agricultural products: quality, safety and production conditions. In terms of quality our import market is absolutely out of control and that’s the task to be assigned to the Ministry of Agriculture, he emphasised.

Sergey Lisovskiy, the First Deputy Chairman of the Council of the Federation Committee for Agrarian and Food Policy and Environmental Management said that any subsidies from the government would be useless without the proactive participation of the Manufacturers Alliance.

“Wholesale Distribution Centres are the only opportunity to offer the goods to the end consumers leaving behind the marketing chains,” Lisovskiy said.

Sjaak Van Der Tak, the Mayor of the Westland Municipality, shared the new trade ideology with the participants of the forum.

“Today agriculture industry is based on environmentally safe production, resource management, recording of indicators. Harvesting, packaging and delivery have the same importance as the conditions of production. We are ready for cooperation with Russia in the field of technologies to let us produce high quality products,” Sjaak Van Der Tak said.

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Among the results of the forum there are six investment agreements signed between the Ministry of Food and Agriculture of Moscow Region and investors from Moscow Region. The total amount of the contracts is over 13.6 bln roubles.

The largest project planned by “Agroculture Group” is construction of Stage 3 of the greenhouse facility in Kashira (30 hectares) for whole-year protected vegetable farming. The productivity of the greenhouse will be over 24.000 tons per year. The amount of investments is 7.2 bln roubles.

SPK Demetra will introduce the following project in Serebryannye Prudy: establishing a plant and seed breeding centre to produce high yielder winter wheat. The amount of investments is 411 mln roubles.

In Stupino district a mushroom farming facility will be established. The amount of investments is 1.9 bln roubles.

Greenhouse Complex Monino is going to invest into the construction of automated greenhouse facilities with a separate power generation unit in Kolomna district. The amount of investments is 2.0 bln roubles.

RusAgroHolding is going to build a greenhouse facility for farming champignons in the Moscow Region. The amount of investments is 1.9 bln roubles.

New vegetable storehouse will be built in Shatura District with the capacity of 16.000 tons The project investor is Agroforward. The amount of investments is 200 mln roubles.

An agreement with Sberbank Insurance Broker has also been signed. The subject of the agreement is cooperation to improve communication, to establish effective information environment to provide insurance with the best product-related and price-related characteristics, to develop and introduce effective forms of cooperation in the process of insurance.

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During the two days of the Forum 4 round-table meetings with over 30 spokespersons representing agricultural industry, investment and banking community, state authorities were held. There was a special session called The Banking Hour where the agricultural manufacturers were told about different mechanisms to obtain credit funds for developing and updating their business.

For reference:

Special Partner of the Forum: Greenhouse Technologies and OJSC Lukhovitsy Vegetables; The Banking Hour Partners: Rosselkhozbank and Sberbank of Russia; Official Linguistic Support Partner: Translink;  the Forum is also supported by: Prombiotech Engineering Centre and GK Soyuzsnab.

The event site will also host an exhibition where the following companies will participate: Dmitrovo Vegetables, Radumlya, Food City, 4 Seasons, Teplitsy Rossii Association, Philips, Svetogor, InFrost, Sedek, Agrouslugi, Ruzskie Ovoschi, Maral Invest, Agroculture Group, TK Mushroom Farm, Iglus, Agrotechmarket, TK Iceberg, Turovsky Greenhouse Complex, SPK Demetra and Investment Foundation of Kolomna District.

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