Farming News - Union official blames low tech farming not the droughts for Russian grain losses.
News
Union official blames low tech farming not the droughts for Russian grain losses.
image expired
06/12/2010
This year alone, Russia has lost an estimated 35-40m tonnes of grain compared to usual production volumes. Arkadiy Zlochevskiy, President of the Russian Grain Union cited the Russian industry's lack of technical development as the major cause behind the shortfall, and not the droughts. He maintains this low level of technical development is responsible for about 60% of the general production losses.
The Union President went on to note that, even under drought conditions, enterprises which used more modern technologies, and particularly minimal cultivations, reported yields of around twice the regional average.
According to Zlochevskiy, the market place is the most powerful medium for implementing new technologies, which result in an increase in general production. In order to support grain production volumes, he explains, profit margins should not fall below 40%. The President noted that Russia has faced losses this season, which will form the basis for next year's crop forecast.
Other negative trends included a decrease of 15-16% in production volume of winter sowing areas. Although Russian authorities plan to award partial compensation, losses in spring areas continue to increase. Mr Zlochevskiy predicted that a planned increase in spring areas may prove unsuccessful. He attributed this to a lack of fertiliser stocks and low agricultural machinery purchases compared to last year.
The key to solving the grain industry's problems lies in the acceptance and implementation of two programs, which the Russian Grain Union are pushing the Government to employ: subsidies for agricultural producers and a profitability retention program.
In order to realise the proposed subsidies, the Union have offered to replace a 'grain interventions mechanism' with a minimum guaranteed price, and to organize distribution operations and market protection.
The Russian Grain Union claim that several aspects will need to be factored into the profitability retention program budget; compensation for agricultural producers, in the case of the natural monopolies tariffs increase, and fuel materials. They want to see a more flexible tariff-customs policy, including the introduction of floating rates for mineral fertilizer exports.
However, Mr Zlocheviskiy did acknowledge a problem with fertiliser provision