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An Interview with Russian Minister of Agriculture Dmitry Patrushev

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In recent years, agriculture has become an object of pride for the Russian government: the industry is growing confidently, and exports of agricultural products have now surpassed exports of arms. Dmitry Patrushev, who assumed the post of Russian Minister of Agriculture seven months ago, has not exactly hid his ambitions – and believes that the agricultural industry has even more to show off and prove to the world. How to increase food exports twofold; on agricultural diplomacy; why do American farmers continue to suffer – all these and more were discussed with RIA Novosti in the Minister’s first interview at his new post. For RIA Novosti – Dmitry Kiselev and Anton Mesheryakov continued the conversation.

-Dmitry Nikolaevich, in the Soviet Union, if someone was sent to work in agriculture, they were considered almost chained to it. You have been Minister already a year and a half now – was it not worrying to take up the position? How do you feel about it today?

-Chained? I don’t quite agree with this. Times have changed, and the situation has vastly improved. Agriculture, and the broader industry associated with it, is a major driver of the Russian economy today. And it’s a rapidly developing, forward-thinking industry: there is definitely much to prove and to demonstrate. We have serious ambitions; we are an agrarian nation; and the land that we hold – well, it all speaks to the extent of the potential in our agricultural complex.

With regards to my own conclusions – let’s return to that later.

-Name some of the major events in your industry in 2018. Because it’s one thing to say it’s a major driver with great potential, but how can you prove it?

-Well I myself am not the only one to mention it, but also statistics – we have to understand that the tasks currently before us could not have been given to a lagging, antiquated industry. One notable event was an order from the President, which in May of this year requested an increase essentially by two times in agricultural exports. And now we are able not just to provide for our own needs, but also to provide a wide range of countries with exported agricultural and food goods.

Over the last year, we have increased production of cattle by 2.5%: we have now successfully reversed a four-year negative trend in this area, and milk production is growing. We have made serious harvests over the past year. Last year, in 2017, we harvested an approximate total of 135 million tonnes of grain; and this year, over 110 million tonnes. While this at first seems like less, if we make comparisons to average annual values over the past five years at approximately 98 tonnes, we of course have still surpassed them. So the industry is not far behind.

I think that the agricultural industry overall, the events of the last few months notwithstanding, will grow in size by about 1% by the end of 2018. Last year, agricultural exports totalled about $21 billion. This year, we genuinely expect to approach the $26 billion figure. So the numbers really speak for themselves.

-So it’s almost twice as large as arms exports?

-Weapons are a market in which we traditionally are strong. Historically it has long been this way; we are a major producer and supplier of arms, while it’s only recently that we’ve started to win in the agricultural markets. We are making first, and, I think, confident steps – moving forward. And, in my view, quite effectively.

-While even American farmers suffer…

-Yes, they don’t have quite the leadership we do…

-In 2019, financing for government support programmes in the agricultural industry is planned at 300 billion rubles. In your view, could Russian agriculture develop without such a level of government assistance?

-You’re absolutely right: next year the allocated level of government support stands at over 300 billion rubles in comparison to 259 billion rubles this year. Incredible people live in Russia! They are strong, prepared to overcome any difficulty. But as practice shows, with the plans and support in place, we can reasonably expect that the desired action steps will be achieved.

It also should be clearly understood that agriculture enjoys government support almost everywhere in the world – and primarily financial. Of course the overall numeric size of subsidy is important, but the way in which the budget is distributed is just as significant: which segments of the industry need the most support, and which can support themselves to profitability.

Therefore, before financing is formally allocated, it’s important to clearly identify the desired route by which the agricultural industry should develop in the future – this is the key responsibility of our Ministry.

-So how should we determine the route by which our agricultural train will travel?

-Well, first, it’s our export projects that will be most important as we increase production, which we will then offer on foreign markets.

Another important topic is the federal science and technology programme in agriculture. Today, our agricultural producers suffer from a lack of domestically-developed seeds. A programme for development of selective breeding for potatoes has already been taken up at the government level – we will again develop our own seeds. In the Soviet Union it was the case that we had our own variants of potatoes, but in contemporary Russia this is no longer true, and we are now reviving this area of work. We expect that soon, our varieties will constitute about 50% of the potato market in Russia.

In the near future, we will submit a programme for sugar beets to the government – I hope it will be approved next year. And several other programmes in various areas, a total of 14: in terms of genetics, seed material, and others in which we have lagged behind.

Also in development is a programme for sustainable development of villages. This was a task handed down by the President of the Russian Federation himself – and very positive that it was brought up at such an high level. It includes construction of new residences in the villages; schools, hospitals, roads, and sports facilities. You cannot limit development to cities. The majority of people live in the countryside; you cannot just forget them. And together with the expert community we will carry this out.

-At the Congress of United Russia, which took place at the beginning of December, a proposal was made – and then supported by Aleksei Gordeev, to officially designate this programme of development for village territories into a national project. Would you support such a proposal?

-I would support it. But a decision on recognition of this programme or that programme with the status of national project is not one that I can make – it is for the President of the country. If the President makes such a decision, not only I, but likely the entire agrarian community would view it very positively.

-Returning again to agribusiness, what specifically what needs to be done to double exports; what and to whom should we plan to sell?

-This would be oil and fat products and, naturally, grain. Meat and dairy products, fish and fish products also – a rather large range of goods. But it is important to note that as we develop exports, we do not want to deprive our own population of high-quality products. It is of course impossible for us to export everything. At the same time, we should raise production capacities – this is a key step. And in so doing it is important to understand clearly that without building a logistical supply chain for exports, we will not be able to make any significant increase.

The next item: without promotion of our products, we will not achieve a positive result either. We plan to send ‘agricultural attaches’ to countries that will be potential markets for sales of our products – people who can explain why our products are superior to analogues from other countries. Essentially, they will be agricultural diplomats. And I want to note specifically that we recently made an agreement with MGIMO – a group that will prepare precisely these specialists. Without them, we will not be able to achieve this goal. It is also important for us to resolve a number of difficulties with phytosanitary conditions under which our purchasing partners are prepared to purchase Russian agricultural products. Beyond that, we have other specific questions with regard to veterinary safety, with which we will also continue to work.

-Speaking specifically about markets – today, one of the most important markets for us, in terms both of current exports and future development, is China. For many years discussions have occurred around the possibility of meat exports: pork, beef. What thus far has prevented China from importing our meat?

-We have to start with the fact that China is a country to which practically all export-oriented countries want to sell their products. And we are no exception. We have wanted for quite some time already – seven years now – to open grain supplies to China. And we did it. This is how it is for other products as well. In the near future, deliveries of frozen poultry meat and dairy products to China will begin. There remains a bit more to do – to agree on veterinary certificates, for example. We will do it.

Separately I should note that for China, our confectionery products have been of considerable interest. Export volumes over the past 10 months have increased significantly relative to 2017: we have already supplied over $85 million dollars’ worth. Some was even supplied through the now well-known company Alibaba. Our chocolate is available in practically every Chinese retail network of every region of the country. It is a real achievement for us.

On the subjects of beef and pork – while we are working on it, the process is not so simple. But in light of some of the problems they are having with their American partners, there’s a chance that we may be able to speed up the process and supply our production.

-On the export route to China, are there worries about the African swine flu with beef and pork?

-African swine flu is found both in Russia and in China. By the way, they consult us on the spread of agricultural disease – in principle, it’s something we both grapple with.

-Can we guarantee that our meat is clean?

-We are carrying out a process of regionalisation. We have problems with African swine flu in some regions; in others, there have never been any issues. Those are the regions from which we’ll supply meat to China.

The Chinese are complex as consumers; they have to be convinced at length that our products are better. They choose carefully, and, of course, protect their interests. They now want us to increase their supply of soybeans. But they have their own interests – to bring more pork and beef to the Chinese market.

-Without substituting soy?

-Well, of course we’ll supply them with the desired volume of soybeans.

-Another market perhaps less important, but nevertheless ‘hot’ for us is Turkey. For example, last year Ankara introduced a series of restrictions on imports of Russian agricultural products. Are there any remaining limitations for us?

-Turkey, of course, is a partner for us – but working with them is not the easiest of processes. Nevertheless, goods turnover currently stands at $3 billion per year. And I should note that we recently agreed on supplies of beef to Turkey. It’s a significant breakthrough.

-Still, it looks like grain will remain Russia’s primary export product in the years ahead. According to forecasts, by 2036 we will have harvests of 150 million tonnes per year. How realistic are those projections?

-You don’t believe them?

-I want to believe, but very carefully!

-We are also cautious, nevertheless, they’re appropriate. Don’t forget – today Russia is already the world’s largest exporter of wheat – we already export our grain to many different countries.

Right now we are working on a strategy for development in grain production. It has already been approved by a panel of experts and by our partners in other ministries and departments and will soon be released for review by the government. The final version will include clear procedures by which we will increase grain output. We will bring new land into use, which – and I say this very confidently – will allow us to provide an harvest of 150 million tonnes by 2036.

-Fish processing companies seem to fear that nearly all raw materials now go out as export. Will increases in exports of fish and fish products impact consumption on the domestic market?

-Fish consumption here is developing quite rapidly. It’s well known that this year there was a record salmon fishing season in the Far East – larger than ever previously in recorded history.

-Prices are even lower on caviar…

-Yes, they’re down. The fishing industry is also one of the main sectors through which we can raise exports.

But first, in this case, we want to be sure our own population is adequately served with fish products. We won’t make any decisions that disadvantage our own population – there should be no doubts. We will support the fishing industry, we will let the added value associated with reprocessing of fish products remain on our territory, and export already fully-prepared goods.

-Some experts have discussed the negative impact of the food embargo on competition within the country. Is this really accurate?

-Well, you need to understand that the Russian embargo is a response to limitations raised by other countries. We have never been the first to do these sorts of things, and, actually, I don’t think we will. But in discussing the pluses and minuses of these events, the pluses for our producers are distinct and significant.

And our Western partners are crying at the same time that they are losing enormous amounts of money. But we ourselves have experienced no such problems – our manufacturers all say that they are satisfied; the format of interaction that exists has allowed them to develop successfully already. Therefore, if sanctions on our country continue, we will continue to work in these conditions and develop our agriculture.

Generally, in my view, we have already made significant developments in the development of our industry – there’s no going back. And it’s evident that our goals have been achieved: domestic agriculture in Russia has almost re-appeared as if from a black hole, and has now become one of the most advanced and competitive industries. Most importantly, our products are of high quality. I recently met with an Hungarian partner who mentioned that he wouldn’t eat any other yogurts except for Russian products – he tried them and immediately felt that their taste and quality were absolutely beyond compare.

-There is a doctrine on food safety in Russia. Target indicators provided therein have already been achieved. Do you think it’s time to re-evaluate them and develop new ones?

-The doctrine on food safety that you’re mentioning was put in place in 2010. Naturally, time has passed, and all the prerequisites necessary to re-evaluate it have already been completed. This work is ongoing; the new doctrine has already been prepared and sent to the government.

What in it differs from the older version? Today, we have achieved import substitution in a wide array of categories. So our key indicators have changed, now we measure foreign production and its consumption, and we’ve already discussed what we’re prepared to export.

Beyond that, we’re introducing two indicators – the economic and physical accessibility of food. To put it more simply, this is a question about how much of a given product one can buy given a minimal income level among the population. One plus – the accessibility of stores in which one can purchase necessary goods.

-You represent our country on a range of intergovernmental commissions. In your view, are relationships with Russia as a trading partner changing relative to years past?

-As the head of the Russian side of a range of intergovernmental commissions, I can clearly and confidently say that interaction is occurring throughout the economy: in energy, transportation, infrastructure, and, of course, agriculture. But joint ventures are also being organised – both here and in foreign countries. Despite all the embargoes, sanctions and barriers, investments come to and from our country. At the same time, Russia, at least by my observations, is an active player in the international market – and there can be no doubt that this will continue.

-Dmitry Nikolaevich, the New Year is already, as they say, on the nose, and many will make the choice of wine for their table. How is domestic winemaking now developing in Russia? Is it safe to say that the coming year will be met with more domestic wine and champagne on Russian tables?

Winemaking today is a fashionable industry, and many new players have entered this area of the agricultural industry. Most importantly, our wines, and our sparkling wines, are becoming more competitive. They are actively purchased abroad – throughout the CIS, but nevertheless, it is an achievement. Our wines also take favourable results in competitions.

In addressing domestic consumption of Russian wines in the country, then actually in just a short time – since the beginning of this year – sales of wines grew by 3%, and sales of sparkling wine by half a percent. I sincerely hope that Russians will have Russian champagne and domestic wines on their New Year’s tables.

I wish all Russians a very happy upcoming New Year, I wish you happiness and good luck, and hope that our industry remains – just as it is now – a locomotive for the economy, notwithstanding sanctions and other difficulties. Weather conditions may not always be exactly as ordered – but nevertheless, we continue developing and moving forward.

Source: RIA Novosti

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