Seeds of Discord

Seeds of Discord

Photo: https://ksonline.ru/

The harvest campaign is coming to an end in Siberia. The weather conditions were unfavorable. Farmers faced serious problems while reaping the harvest and, therefore, the results are worse than last year's in some places.

The end of the harvest season has been announced in Krasnoyarsk territory. It ranked first in the Siberian Federal District both in total gross output and yield per hectare in recent years. The region remains the leader this fall, although the harvest is lower than last year. A total of 2.4 million tonnes of grain was trashed. In 2020, it was almost 2.8 million tonnes. The average yield is 30.7 q/ha. Although there are farms in the area, where 50-60 quintals per hectare are harvested. As a rule, they are represented in Krasnoyarsk’s “breadbaskets” Uzhursky, Sharypovsky, Nazarovsky, and Yemelyanovsky districts. These are the central and western groups of districts of the Krasnoyarsk territory.

“The speed of harvesting slowed down due to prolonged rains for a few weeks. Then wet snow fell as well. We had to mobilize all resources,” explained Leonid Shorokhov, Minister of Agriculture and Trade of the Krasnoyarsk territory.

The vagaries of the weather were also observed in the Republic of Khakasia. The harvest cannot be completed there because of the snow that suddenly fell in two areas. Although it quickly melted, it made the schedule tighter. So far, only 75% of the cultivated areas in the republic have been harvested.

The situation in the Irkutsk region is not completely clear. About 80% of the fields are harvested there. So far, 728,000 tonnes of grain have been trashed which is more than last year's level. Higher indicators are expected in the Republic of Tuva. However, the area under crops is only 55,000 hectares there as livestock farming is more developed in the republic.

At the same time, farms are showing more and more active interest in such a crop as rapeseed. The same Krasnoyarsk territory sows it more than any other region in Russia for the third year in a row, leaving behind even such areas as the Krasnodar territory, Bashkiria, and Tatarstan. Rapeseed harvesting volume is a bit less than grain harvesting. So far, two-thirds of the area has been harvested, which amounted to 271,000 tonnes. This is already more than last year. The Krasnoyarsk territory gives about 10% of the total yield of rapeseed in Russia. In recent years, rapeseed has been in high demand in South-East Asia, particularly in China, where it is used to make oil. For example, Belarus willingly purchases it for use in the production of fuel and lubricants.

Now, there are several lingering questions: what to do with the grain harvest, what will be exported, what will remain in Russia, and, most importantly, how it will affect product prices?

The Mill-2021 annual business conference organized by the Russian Union of Milling and Grain Enterprises took place at the end of September. The event’s agenda and the issues addressed by experts speak about the fact that this industry has been long in a systemic crisis. The success of the domestic combine harvesters does not improve the situation in any way. Milling companies’ representatives believe that the government got carried away with the task of turning Russia into a world grain power so much that they have completely forgotten about the processing. According to the Russian Union of Milling and Grain Enterprises, the loss of the producers per tonne of wheat flour amounted to 2,280 ($32.07) rubles, and the loss per tonne of rye flour was 3,630 rubles ($51.05) by the end of the summer as flour prices are much lower than grain prices that are boosted by exports. However, the foreign market is more and more closed for Russian flour.

“Enterprises of the industry have the production capacity to export more than 3 million tonnes of flour and cereals a year.

However, there is no state support. As before, the total export of flour, which did not exceed 200,000 tonnes per year in previous years, was even more reduced in the 2020-2021 grain year. The Ministry of Agriculture apparently lost interest in the development of flour exports, as evidenced by the absence of such a goal in the strategy for the development of food and processing industry of the Russian Federation for the period until 2030,” a representative of the Russian Union of Milling and Grain Enterprises told wek.ru.

Notably, several experts believe that the situation with the high yield is far from being ideal. Quantity does not turn into quality. First-class wheat is practically not produced in Russia and the production volume of second-class wheat is at the level of statistical error.

“Now the industry must present a united front to have a market price for their products following the real costs of production. Today, bakeries in most regions are unprofitable. They live not at the expense of bread production, but at the expense of secondary products such as semi-finished and confectionery products. Bread brings only a loss. You will not see such a situation anywhere in the world!” said President of the Russian Union of Bakers Alexei Lyalin.

Many believe now that it is needed to separate the food and processing industries in a separate ministry. At present, they are somewhat unloved guests in the Russian Ministry of Agriculture.

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