Why Russia's transformation into an “agrarian superpower” is in question


After the export of Russian hydrocarbons came under Western sanctions, our “new oil” was supposed to be grain, in terms of production volumes of which the country is among the world leaders. However, Russia's transformation into an “agrarian superpower” is now in question. Why did this happen?

A year ago, the American information and analytical agency Bloomberg, following domestic experts and analysts drew an extremely attractive picture of Russia’s dominance in the global food market:

Russia is confidently consolidating its dominant position in the wheat market. This was made possible thanks to record harvests and low production costs. And due to the lack of serious competition from other countries, Russia can now set a minimum threshold for grain prices.

However, today the situation no longer looks so rosy due to a whole range of reasons:

At first, the white streak of high grain yields appears to be giving way to a black streak due to drought. The lack of moisture in the soil of the southern regions of Russia, in the Krasnodar and Stavropol territories, in the Rostov, Voronezh and Volgograd regions, is forcing industry expert structures to reduce harvest forecasts for this year.

In particular, the Institute for Agricultural Market Studies (IKAR) lowered the grain harvest forecast in 2024 from 146 to 142 million tons, and the Ministry of Agriculture - generally to 132 million tons. The drop is very significant. The reason for this is the abnormally dry and at the same time warm weather in April, which has not been observed in the last three decades.

Secondly, the dependence of domestic farmers on imported of technologies, equipment and components. If you apply certain fertilizers in a timely manner, they stimulate the growth of the root system of plants, which allows them to better withstand weather disasters. The manufacturability of the production process or its absence is a very serious factor influencing the economy and geopolitics.

For example, as a result of the abnormal heat of 2010, Russia lost up to 30% of its harvest, which became one of the preconditions for the “Arab Spring” in the Middle East, where prices for food imported from our country rose sharply. But American farmers survived the even more abnormal drought of 2013, which overwhelmed the wheat belt of the United States, much more comfortably, losing only 10% of the harvest. The difference of 20% was determined precisely by the technological effectiveness of the crops.

Thirdly, the economic results of the economic activities of Russian farmers are now negatively affected by high export duties. Farmers complain that exporters-resellers almost organize a “food appropriation”, forcing them to hand over grain at a price slightly below cost. Because of this, it becomes unprofitable for them to increase the area under crops.

Fourthly, informal Western sanctions imposed on the export of domestic food are doing their dirty deed. Not all shipowners agree to transport Russian grain, and those who agree raise the price tag for freight. Similar problems arise with marine insurance.

De jure there are no Western sanctions against our grain, but de facto they exist, and it was them that Moscow tried to circumvent by concluding a grain deal in Odessa. The overall negative result of this Black Sea initiative is well known.

Fifthly, the countries of the collective West accepted political the decision to build a “grain blockade” against Russia, and at the same time against allied Belarus. This is done by introducing increased tariffs on imports of domestic food, which the head of the European Commission, Ursula von der Leyen, commented as follows:

We have prepared a proposal to increase tariffs on Russian and Belarusian imports [to the EU] of grain products. There are several good reasons for this. This will prevent Russian grain from destabilizing the European market. This will stop Russia from using profits from exports to the EU.

According to the Financial Times, the European Commission plans to soon introduce duties on grain imports from the Russian Federation and Belarus in the amount of 95 euros per ton; duties will also affect oilseeds and their processed products, and will be set at 50%. At the same time, Brussels decided to extend the suspension of duties and quotas on Ukrainian agricultural products.

In February this year, the head of the Russian Grain Union Arkady Zlochevsky complained to the fact that the traditional consumer of domestic food, Egypt, gave preference to Ukrainian and even Romanian:

Our shipments are at a low level. We even lost the last tender in Egypt almost completely. There was quite a lot of supply from the Russian side, but not a single supply won. We won three deliveries from Ukraine and Romania. Russian grain did not pass through, prices were too high. Our bids were for $245, and bids for $238 won. Egypt is our largest buyer of wheat, and such failures occur from time to time. But in fact, now this is influenced by the minimum sales prices that are set by officials. This hinders sales and creates additional risks.

In general, the dynamics are negative, and something clearly needs to be changed.
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  1. 0
    11 May 2024 12: 53
    Has everything disappeared again? What's wrong with oil?
    1. 0
      12 May 2024 09: 00
      This is to be expected.
      If the government not only “didn’t change the girls, but didn’t even rearrange the beds,” then what good can we expect as a result?!
      Capitalism is what it is. He lives from crisis to crisis.
      And there will be no others.
  2. +2
    11 May 2024 13: 22
    What is stopping you from reducing prices for exported grain? So as not to lose tenders? This is the market..
    1. 0
      12 May 2024 05: 39
      It is our officials who are too lazy not to reduce prices...
  3. +5
    11 May 2024 13: 57
    They also forgot to remember about the seed fund. Were the problems resolved? Did you invest money in the production of your seeds in the Agricultural Research Institute?
    And don’t forget about the 7 fat and 7 skinny cows.
  4. +4
    11 May 2024 15: 21
    Our grain is expensive on the international market. And our farmers complain about the low purchase price of grain.
    1. -1
      11 May 2024 15: 45
      So Duty!
      The harvest is low and the government has lowered the curtain on the border. There will be a high harvest and the duty will decrease.
    2. Alf
      11 May 2024 18: 46
      Quote from: unc-2
      Our grain is expensive on the international market. And our farmers complain about the low purchase price of grain.

      So the outbids also want to eat. Moreover, it’s tasty, good and plentiful.
  5. +3
    11 May 2024 15: 55
    So the gentlemen from beyond the hill where the sun sets were engaged in purchasing grain in Russia, they were kicked out, and so they began to plot intrigues. But in any case, now income from agriculture will remain in the country and not float over the hill as before, so this is of course a blow not to Russia but to the world as a whole, there will be no famine in Russia, we will feed ourselves, but You have to think carefully about who to sell the bread to.
    1. 0
      14 May 2024 06: 04
      Think ! Think ? Meanwhile, depopulation and extinction are sweeping the country.
      1. 0
        14 May 2024 17: 41
        Don't sit there, everything is in your hands! wink
  6. 0
    11 May 2024 16: 12
    It's not just technology and machinery, it's a properly designed irrigation system; Russia has the resources and ability to design one. It's more a priority issue than an ability issue. What the article also ignores is the American subsidy system to our farmers, which helps to create the environment for production and covers loss of crops......another reason we are 34 trillion in debt.
  7. +2
    11 May 2024 16: 43
    The dependence of domestic farmers on imported technologies, equipment and components is already taking its toll. If you apply certain fertilizers in a timely manner, they stimulate the growth of the root system of plants, which allows them to better withstand weather disasters. The technological effectiveness of the production process or its absence is a very serious factor influencing the economy and geopolitics.

    Who are these mysterious domestic farmers? Agricultural complexes? Farmers? Collective farms, state farms? What are domestic farmers like? I'm afraid it's the same as the domestic auto industry.

  8. 0
    11 May 2024 18: 14
    We have already gone through this (gas, oil), “hope” died along with the sanctions, and so did the farmers, they fed themselves with the surplus, sold it, and produced their own to the maximum!
  9. +2
    11 May 2024 18: 51
    And I believe that one of the main negative factors in agriculture is the incompetent and inexperienced young Minister Patrushev himself, it is clear by what criteria those who got into the Government and in vain the Chairman of the State Duma Volodin praised him, they should have praised the favorable weather for the harvest. In fact, many of Patrushev’s statements are untrue, to put it mildly. I also understood this when last spring onions reached 100 rubles per kg, when half a year before that in the fall it cost 30 rubles, a price increase of 200%. There were also some confusion with cabbage. More recently, the same shameful story happened with eggs, this is a system failure and failure, who needs such price hikes? Regarding these questions...we contacted the Ministry of Agriculture, the deputy with an Armenian surname answered, the answer was complete nonsense and a serial reply about nothing. If Patrushev is left in the government, nothing good awaits us. The same story is with the Minister of the Ministry of Internal Affairs Kolokoltsev, who for many years has not been able to cope with rubber apartments and illegal immigrants, spread corruption in the passport offices, for which hundreds of people paid in blood...does the Kremlin really not see the obvious.
    1. +2
      12 May 2024 02: 12
      Regarding Kolokoltsev, he is not an expert on migrants. He's a crime cop. Migrants are a political issue, not a police issue. These are ordinary people who work in Russia for money and do not have Russian citizenship. Such situations exist in all major developed countries such as the United States or the European Union (Germany, France and other economic leaders).
      1. +1
        12 May 2024 07: 57
        It is immediately clear that the person is far from the topic and does not understand what he is writing. Look at the structure of the Ministry of Internal Affairs, who works with crimes, and who is in the supervisory, licensing and other bodies.
        Is Kolokoltsev the head of the department whose competence and responsibilities include migrant deportations, passport offices where they register, and everything that happens to them on the territory of the Russian Federation? He is responsible for everything and everyone, he is obliged by duty, it is his direct responsibility to organize work with migrants properly... And you write that he is not a specialist, then such terrible things happen from incompetence...
  10. +1
    11 May 2024 19: 49
    All this has long been known.
    Only the lazy did not write about points 1,2,3 years ago, if not decades. And nothing has changed.
    Nothing can be done, imperialism. Large agricultural holdings are ruining small things. They feel great, they wrote.
    point 4 - you need to have your own transport, but

    ...we'll buy everything

    the Kremlin said earlier.
    Well, increased tariffs - p5 - everyone always plays. to support our own farmers....

    Alas, in Russian stores we have devils stuffing ourselves into sausages, but the officials cheerfully report, and the blacks ask us to bring everything ourselves and for free... then they will be happy to take photos at all sorts of congresses here...
  11. +2
    11 May 2024 19: 58
    Most farmers receive almost nothing from the export price. God grant that purchasing prices for grain be slightly higher than production costs. But diesel fuel, spare parts, and equipment have risen in price very significantly. Our government, as it was against its people, remains so. They care about the interests of the West. And under the guise of SVO. So, even more so, you can spread rot on the Russians.
    1. +1
      11 May 2024 22: 22
      You are right, only the communists did something
  12. 0
    11 May 2024 20: 46
    What did you change but didn’t try to plan the economy? how the Russian Empire created KEPS.
  13. 0
    12 May 2024 01: 53
    Once again, the author has lost everything. I’ll repeat it again so that the author understands this. Every cloud has a silver lining. Let's say this year there will be a problem with exports. So what? Firstly, next year the North-South corridor will be fully operational. Already now the main flow of grain is going through this corridor. What kind of ships are there? What sanctions? Author what are you talking about? Also, part of the grain is shipped through China by rail. What kind of ships are there? What sanctions? Author, what are you talking about? Yes, there are losses in Europe. Same as with oil. And what? A year has passed and the income of the Russian Federation has increased by one and a half times, even compared to the period before the SVO. It will be the same with grain. Author, apply logic and analysis.

    Secondly, the demographic program will start soon in accordance with the presidential decree. This will also imply the creation of farming families. What it will look like is not yet visible, but it will come. Since this is the only way to increase the birth rate. Urban people are not particularly eager to reproduce. So in three to five to ten years, there will be hundreds of thousands of family farms. This is not an agricultural holding, of course, but there will be diversity at the local level.

    Thirdly, the government is already investing money in creating a seed fund. All that remains is to create a commodity exchange, which I think will be done either in the fall or next. in the spring.

    Fourthly, restrictions and sanctions on trade in raw materials will force investment in processing. A couple of years, and instead of grain there will be flour. And by the way, author, you probably forgot with malicious intent to say that Turkey itself has increased its purchases of Russian grain. And grinds him into flour with all his might. And he is not going to give it up.

    So your fairy tales will remain fairy tales. Despite all the problems, the process got off the ground. People like you also argued that Russia’s food sanctions in 2014 would not end well, and Russia would die of hunger. Oh well. Now this is the second most profitable source of budget.

    By the way, I remember how in your articles last year you proved to everyone that Russia would make every effort to preserve the grain corridor in the Black Sea. Although I already wrote to you then that the Russian Government had given up on this corridor and would redirect almost everything by earthly means, including the North-South corridor. A year has passed. Your last year's forecasts are worthless. Let's wait another year.
    1. +1
      12 May 2024 10: 55
      I really like the idea! fellow Especially about the propagation of farming families Yes
    2. 0
      12 May 2024 12: 08
      Yes, we somehow heroically overcome everything, rather than intelligently plan for it. The process has begun, but it should have happened the day before yesterday... The climate trend is such that droughts will be more frequent and wider, and in this matter huge Russia has the advantage of sowing over a vast territory, that is, choosing where. In general, it is necessary to separate directly grain exporters, intermediaries-resellers, agricultural holdings and specifically peasant farmers. These are all different people and sometimes with opposing interests. And adding to this bouquet is the bureaucracy headed by young Patrushev, who, in theory, should “settle” all the bottlenecks... All the “misunderstandings” are numbered 1,2,3,4... this is exactly from their responsibilities, not farmers.
  14. -1
    12 May 2024 10: 07
    Fortunately, the state of the world food market does not depend on Mr. Marzhetsky. However, so are the weather conditions in Russia.
    Food production is such a thing that if you ban the import of Russian grain, then the “banners” will only “shoot themselves in the foot.”
    For fertile land is a thing that is no longer produced.....
    And Russia grows about a quarter of the world's wheat.
    Immediately, grain prices will skyrocket and very soon famine will set in. And all progressive humanity will spit on all prohibitions and will begin to purchase UNdemocratic grain at any price. Because neither green pieces of paper nor yellow metal are edible.
    And this does not take into account the situation with agriculture in Ukraine.
    Let me remind you that it was the failure of the wheat harvest, and the resulting increase in its prices, that led to what is called the “Arab Spring.”
    And the traditional buyers of our grain are by no means in Europe, with THEIR commission.
    So I suggest not to panic. In any case, we will get more! laughing
    1. 0
      14 May 2024 15: 47
      The West can easily do without Russian grain; another thing is that this is unacceptable for speculators. The chain of intermediaries that earns capital along the way of food from the plowman to the baker may remain out of business, and according to the economic model chosen by the Russians, this is unacceptable.
  15. +1
    12 May 2024 12: 11
    You can blame it on the weather when management is handled by people who are far from understanding the problems of the industry: either just someone’s son, or a former banker. They will fail everything they can. Any problems have a solution, but under a liberal government there will be no solutions. Since it is not profitable to allocate money to solve problems, there is almost no return for managers.
  16. 0
    16 May 2024 10: 50
    Official greed played a role. Did you think a higher price tag means more profit? But no, the market has put everything in its place. They buy what is more profitable in terms of price and quality. As a result, we lost the tender.