In 2018, by comparison with 2014, production of vegetables and greens in closed facilities increased by 1.5 times – while deliveries from abroad of those same products decreased by 1.4 times, according to the research study “Greenhouse Business of Russia-2018”, carried out by the Growth Technologies company. Government support for investment projects, infrastructure assistance from regional authorities, and reduction in import pressure on the commodity markets has made construction and launch of major vegetable greenhouses a very commercially compelling business for new projects.
Nevertheless, shortages of domestic production in off-season vegetables and herbs persist in the country. According to an assessment by Growth Technologies, as of November 2018, an additional 880 to 900 thousand tonnes of greenhouse vegetables are needed to ensure import substitution at current demand levels. But the distribution of the deficit across regions has occurred unequally. “While greenhouses are being actively constructed, the largest deficit currently remains in the Central Federal District, which has the highest population density and many large cities” noted Growth Technologies’ General Director Tamara Reshetnikova to Agroinvestor.
The second region by market deficits of greenhouse vegetables is Siberia and the Far East. “In these districts, there are essentially no major producers – and those engaged in greenhouse vegetable cultivation have old greenhouses. They are gradually closing, and the result is that the total greenhouse area in the region is actually decreasing: in 2018 it will continue to decrease” said Reshetnikokva. Therefore, the eastern part of Russia is highly promising for new construction.
According to data obtained from Rosstat, at the end of 2017 the currently-utilised area of winter greenhouses in Russian agricultural organisations stood at 2.27 thousand hectares. Of these, 676 hectares were in the Volga region, 520 hectares in the Central Federal District, 354 hectares in the Southern Federal District, 346 hectares in the North Caucasus, and 126 hectares in the Northwest Federal District. In Siberia and the Far East is just 7.6% of total winter greenhouse area – 105 hectares and 68 hectares, respectively. In comparison with 2016, currently-utilised greenhouse area has decreased by 16 hectares.
In discussions of deficit structure in greenhouse vegetables, the greatest part is in tomatoes and in other vegetables: peppers, aubergines, zucchini, etc., Reshetnikova notes. “As for cucumbers, their market is actually already saturated in the central regions. But there is still a place for small producers engaged in supplying local markets” she added.
Per Rosstat data, greenhouse vegetable production in the last year in agricultural organisations totalled 922 thousand tonnes, a 13% increase relative to 2016. In 2018, the harvest is expected to exceed 1 million tonnes, the Ministry of Agriculture predicts. According to the “Greenhouses of Russia” association, the indicator may be even higher, reaching as high as 1.1 million tonnes. A similar forecast was also provided by Growth Technologies: according to its estimates, roughly 300 hectares of new greenhouse complexes in total will be launched.
Further growth, and reduction in the deficit of domestic greenhouse vegetables in many cases will depend on future levels of government support, Reshetnikova warns. “Currently, the question of reducing reimbursements for direct capital costs by two times, which will negatively affect the industry’s attractiveness for investment. In turn, it is possible that regional authorities in Siberia and the Far East will initiate an appeal, so that their regions retain the more advantageous capital expenditures reimbursement rate of 20%, as there the situation is considerably different relative to that of the European part of Russia” said Reshetnikova.
According to the Ministry of Agriculture, as of 21st November the gross harvest of greenhouse vegetable crops in the country stood at 876 thousand tonnes, 28% higher than the same period in 2017. Cucumber harvests increased by 18% to 526 thousand tonnes; tomatoes – by 48% to 336 thousand tonnes; other vegetable crops – by 25% to 13.5 thousand tonnes. Leading regions in greenhouse vegetable production by last year’s totals were the Krasnodar territory, Bashkiriya and the Stavropol territory.