News Extension
Russia is committed to more arable farming
Russia plans to significantly expand its arable acreage. The sown area will be increased by 200.000 hectares this year to more than 80 million hectares. Agriculture Minister Alexander Tkachev announced this during a meeting with Russian President Vladimir Putin.
The expansion of the acreage comes on top of the previous pluses. The focus is mainly on grains, but vegetables are also receiving increasing attention in Russia. In order to be able to cope with this growth in acreage, considerable investments and financing are currently being made.
Bank cooperates
The Minister of Agriculture indicated that about 114 billion rubles (currently €1 is 76 rubles) in loans has already been provided by the Russian agricultural bank. The bank received compliments from the Russian minister for financing many farmers.
The problems with providing fertilizers and fuels to Russian farmers are being addressed by the Russian Ministry of Agriculture. According to the minister, the farms in the country are well supplied and the costs for fertilizers have fallen because it was possible to negotiate well with the traders.
Fertilizer investments
Russia is also investing in fertilizers; for example, it was recently announced that money is being invested in the modernization of the mineral fertilizer plant and that money is being spent on expanding the factory's range. The plant also plans to triple production of granulated ammonium sulfate.
In addition to government support and a demanding internal market, farmers receive more benefits. An example of this is the oil price. On average, 1 liter of diesel in Russia costs 56 cents (at the pump). That is a big difference with the European oil prices, which are boosted by excise duties and taxes. The low oil price in Russia is benefiting the cost price of the Russian agricultural sector.
Low land price
Land prices in Russia are also significantly below levels elsewhere in the world. The weak ruble is a necessity for importers, but a virtue for exporters. The strong growth in Russian exports is partly due to the weak Russian currency, which has been extremely hard in recent days decreased in value.
The preliminary forecast of the Ministry of Agriculture is that 110 to 115 million tons of grain will be produced this year. Last year the harvest rose to a record of more than 135 million tons of grain.
Photo: Tatyana Mi / Shutterstock.com
Anne-Jan Doorn
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.