Business Opportunities in Agriculture: 150 Field Interviews (Book)

Russia Agribusiness Report

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The Russia Agribusiness Report features Business Monitor International's market assessment and independent 5-year forecasts covering the supply and demand outlook for the livestock, dairy, grains, rice, sugar, edible oils, coffee and cocoa sectors. ( Russia Agribusiness Report - Business Market Reports )

Business Monitor International's Agribusiness service also provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context, such as the background macroeconomic outlook and the downstream supply chain.

Key Benefits
Use BMI's independent 5-Year industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.

Apply BMI's medium term commodity price forecasts to assist with budgetary planning and the identification of investment opportunities and potential risks

Exploit latest competitive intelligence on your competitors and peers in Asia, Europe, Latin America, the Middle East and Africa through our company rankings and analysis.

Executive Summary

Despite having 7% of the world's arable land while accounting for only just over 2% of the world's population, Russia is a net food importer. In BMI 's new Russia Agribusiness Report for Q309, we examine why this is the case and what challenges Russian agriculture will face as the country attempts to reassert itself as an agricultural power. The global recession is creating particular problems and the report examines the government's role in trying to bolster and protect domestic agricultural production at this difficult time. However, we also consider the successes. Grain production has been making great strides and while the recession may lead to short-term crop reductions we forecast that by 2013 Russia will be one of the world's top wheat exporters.

Though the Soviet Union was self-sufficient in food production until well into the 1980s, the danger signs of the coming collapse were clear to see. Yields were a fraction of those in the US as the majority of farming was done on woefully inefficient state and collective farms. A small amount of private household farms were permitted, and, in the 1980s, despite accounting for only 3% of agricultural land, they produced around 25% of the total agricultural output.

With the fall of the Soviet Union in 1991, the system of subsidies for farmers and guaranteed prices and markets for their produce began to collapse. Thrust into vagaries of the market system, many farmers were unable to stay afloat and output dropped precipitously, turning Russia into a large net food importer.

Since the end of the 1990s, however, things have begun to turn around. As unprofitable operators have been forced out of business, those that have survived have become more efficient, and large corporate farms have emerged. Russia's Federal State Statistics Service show that the percentage of agricultural output in value terms produced by larger concerns (agricultural organisations) rose from 41.2% in 2005 to 43.4% in 2007 and the percentage for household farms fell from 53.2% in 2005 to 49.6% in 2007.

We expect grain production to expand rapidly thanks largely to support by the government which has been implementing plans to increase the use of higher yielding seeds, allow the greater use of fertiliser and encourage investment in machinery. An estimated RUB12bn (US$468mn) was poured into the industry between 2005 and 2007 improving crop yields and attracting the attention of foreign investment.

The Moscow Times, quoting Reuters, reported in March 2009 that Russian grain processor Pava is looking for potential foreign investors to help triple the amount of farmland under its control. A company director was quoted as saying that the firm hopes for a tenfold increase in grain production by restoring fallow land in Siberia.

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Business Opportunities in Agriculture: 150 Field Interviews (Book)

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