“There are good possibilities for farming in Russia – concessional financing and rather high purchase prices,” Tatiana Volozhinskaya head of the trade representation at the Russian embassy in Copenhagen told GlobalMeatNews.
Russia’s call comes while Danish pig farmers are grappling with “losses on top of high debt”, according to Seges, an advisory service owned by the Danish Agriculture and Food Council (Landbrug & Fødevarer).
Volozhinskaya said already there were “well established Danish pig farmers in Russia as well as new investors ready to start”.
Normally, Danish farmers – pig farming investors and dairy producers – “get together in groups of three to eight people”, she said adding: “As far as we know, there are about seven to eight groups of [Danish agricultural] investors. We know about two new groups of potential investors for now.”
However she denied that Russia was asking Danish farmers to “move production” there, abandoning their home country, and instead said: “We propose to diversify their business using better opportunities in Russia.”
Claus Fertin, director of the Danish Pig Research Centre, part of Seges, said: “If possibilities are good with a fair risk then there will be interest in investing in pig farming in Russia.” He said Danish farmers were already involved in farming and pig production around the globe.
When asked if politics might deter Danish farmers from investing in Russia, Claus said: “In general it is true – if there are significant risks in investments it will be negative to investments.” But “whether this will be the case in Russia I do not know”, he noted.
Volozhinskaya added: “Anti-Russian propaganda creates for ordinary people a wrong picture of realities in Russia.” She stressed: “Russia is open for the new investments and our government has done a lot to improve investments climate and guarantee investors’ rights in the country.”
Danish farmers fetch better prices in Russia and the Russians benefit from Danish know-how, she said: “We invite Danes for co-operation which means attraction of modern technologies and know-how to the country.” Moreover, “investors get tax reductions and concessional financing by state controlled Russian banks”.
Russia Baltic Pork Invest (RBPI) is perhaps a good example of Russian-Danish collaboration. Former Danish farmer Thomas Nørgaard, now the CEO of RBPI in Russian exclave Kaliningrad, said in a note that the company imports “high quality breeding pigs imported from Denmark”.
‘Energy saving technologies’
He noted that “the Danish pig farming industry was known for energy-saving technologies, environmentally friendly production and humane attitudes towards animals, resulting in tasty and healthy meat”.
Demand was growing with “Russian pork consumption … estimated to increase by approximately 30% in total from 2010 to 2020 and 35% per capita in the same period”, according to Mr Nørgaard. “No producer accounts for more than 10% of the total production volume,” easing competition, he said.
Russia consumes four million tonnes (t) of pork annually, Volozhinskaya added. The country was keen to increase domestic pork production after it banned food imports from the EU, US and others in August 2014 because of diplomatic splits sparked by the Ukraine crisis.
In 2013, Russia imported 800,000t of pork from the EU, including 60,000t from the US alone.