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Meeting on agriculture development

October 9, 2018, Mineralnye Vody

Vladimir Putin held a meeting on measures to fulfil the potential of Russia's agricultural industry.

Agriculture Minister Dmitry Patrushev presented the main report at the meeting.

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues,

We are meeting in the Stavropol Territory, which is one of Russia’s main agricultural regions.

Today I propose examining the results of the agricultural industry in general and discuss current tasks and strategic goals to develop this key industry in Russia. We do this quite regularly and, I would even say, often – and not only in Moscow but really in different Russian regions.

In recent years, agriculture has shown positive dynamics. Over the past five years agricultural production grew more than 20 percent. This is a breakthrough, without exaggeration, a real advance.

Russian producers almost fully meet the demand for the main categories of food products and are actively expanding into foreign markets. Last year exports of foodstuffs and agricultural commodities increased 21 percent and surpassed $20 billion. Until very recently this seemed impossible. Let me remind you: our arms sales, which have always been a source of pride, amount to $15 billion. Agricultural producers surpassed this export volume by $5 billion.

During the first seven months of this year, agricultural exports grew by another third, up to $13 billion. Let me note that 20 years ago Russia had to buy grain abroad and now it is the largest supplier of wheat, the largest in the world, and is the second largest supplier of grain in general.

Exports of sugar, oil, pork and poultry are growing too. During the first seven months of this year grain exports from Russia increased 1.7 times, poultry exports grew by 31 percent, pork by 20 percent, oil by five percent and sugar by four percent.

The transition to an export-oriented growth model is further confirmation of major changes in the domestic agricultural industry. It shows that our agriculture has reached a new level of sustainability and is becoming less vulnerable to market fluctuations, and that internal consumption is becoming less dependent on imports.

Here are some facts: in 2017 the indicators of self-sufficiency were as follows: 170.8 percent for grain; 153.1 percent for vegetable oil; 105.2 percent for sugar, 93 percent for meat and meat products; 87 percent for potatoes; 85.9 percent for vegetables; and 82 percent for milk and dairy products.

As you can see from the figures I quoted, we are not yet fully self-sufficient in some areas, primarily vegetables and fruit, dairy products and beef.

Consistent work is needed to enable Russian producers expand their presence in the domestic market and move into foreign markets. Domestic products should be competitive in quality and price and should enjoy stable and growing demand both inside the country and abroad.

To achieve this it is essential to consolidate the Russian agro-industrial base, its personnel and production capacities, as well as provide farms with modern equipment, increase labour productivity and promote domestic research in selection, genetics and biotechnology in order to make high quality and environmentally clean and safe products.

This is taking place now. We are seeing this. Mr Medvedev and I have just visited one farm. It is not so big, probably in the middle, but it is increasingly using good modern technology.

To enable Russian farmers to take advantage of export opportunities, it is necessary to continue building modern infrastructure and logistics, to remove bottlenecks on railways and increase the capacities of sea ports, elevators and storage terminals. As we will discuss in more detail today, there are no doubt still many outstanding problems in these areas. I am sure you will talk about them today.

And, of course, it is necessary to remove trade barriers and ensure the implementation of sanitary and veterinary requirements for a broader access to external markets. I mean, above all, such promising directions as China, India and the countries of Southeast Asia, Africa and the Persian Gulf.

Let me remind you that the May Executive Order set the goal of raising agro-industrial exports to $45 billion per year in 2024. This is a fairly difficult task. Given the current volume of $20 billion, to reach $45 billion by 2024 is a serious challenge. It is necessary to expand the supply line and increase the share of high added-value goods.

I want to stress that it is not a matter of any rush for the sake of gross figures or the desire to export as much as possible. No, that is not what it is about. Higher export volumes must result from a better quality of domestic products and their global competitiveness.

That is what measures in agricultural, trade, industrial, scientific and educational policy should be aimed at. There is one more question that we also discussed with producers today. It is very important and is becoming more and more topical: staff training. Since the sector is becoming increasingly high-tech, it, of course, needs people meeting these requirements.

Also, we need to improve the mechanisms of state support for agricultural producers. A separate and essential thing is to encourage small and medium-sized entrepreneurship in rural areas, to support business initiative.

Today, farmers account for around 13 percent of agricultural production in Russia. That share has increased by more than a third over the past five years against the backdrop of general growth in the sector.

Broader involvement in agricultural cooperation and wider cooperation with big business should act as a major incentive for the development of farms and personal subsidiary plots. This will enable farmers to build into production and logistical chains, acquire new technologies and resources, and develop modern processing industries more successfully.

And, of course, it is very important to support entrepreneurs at the very beginning of their work, at the initial launch of the business. I know that the Ministry of Agriculture, together with leading financial institutions in the area of agriculture and entrepreneurship, is working on a complex system aimed at supporting farmers and promoting agricultural cooperation.

This system will include mechanisms for providing finance to start-up farmers and already established enterprises in the form of grants, as well as subsidies to expand the activity of cooperatives and the creation of competence centres providing consultative aid to farmers.

I suggest that today we discuss how to use the funds allocated for these purposes most efficiently and what additional measures might be needed to support small businesses in rural areas.


October 9, 2018, Mineralnye Vody