Russian Government allocates billions to support meat exporters

By Aidan Fortune

- Last updated on GMT

Russian Government allocates billions to support meat exporters
Russia is ready to allocate RUB406 billion (US$6.5bn) to agriculture producers in the form of soft loans in the next five years to support meat exports, Russian deputy agriculture minister Sergey Levin has said. Speaking during a press conference in Moscow, Levin noted that the aim was to increase the overall value of meat exports.

In 2018, Russia exported 289,000 tonnes (t) of meat, a rise of 19% on the previous year, according to estimates from the Russian Institute for Agricultural Market Studies IKAR. In value terms, exports jumped by more than 30%, reaching $416m.

Target markets for Russian meat are China, south-east Asia, Africa and the Middle East, Levin said. On the other hand, the complicated epizootic situation in the country continued to be a problem that needed to be addressed, before any increase in exports could be possible, Levin stressed. 

Lyubov Savkina, commercial director for Russian consultancy EMEAT, told GlobalMeatNews​ that, with the recently promised money, the Russian Government planned to build several distribution centres with an overall capacity of 410,000t. These centres could collect and handle meat products destined for exports from Russian companies.

Savkina said this would be a great help to exporters, but admitted that the Government needed to eradicate African Swine Fever (ASF) and avian influenza first, in order to make any increase in meat exports possible.

New commitments

However, the problem for meat producers is that, if they take the export-oriented investment loans promised by the Russian Government, they would have no choice but to increase export supplies.

The major problem with export-oriented investment loans is almost a mandatory investor’s commitment to reach the export targets set in volume or value​,” Albert Davleyev, president of the Russian consulting agency Agrifood Strategies told GlobalMeatNews. ​“Considering a lot of variables and risks, such as the unstable financial situation, currency fluctuations, trade disputes and political risks, many export-oriented strategies would become vulnerable and might deter serious investors from such commitments​.”

On the other hand, although ASF has almost become endemic in Russia, the number of outbreaks and their scale has been steadily decreasing in recent years, thanks to effective veterinary measures, Davleyev said. For instance, last year, the Russian veterinary watchdog Rosselkhoznadzor registered only 105 ASF outbreaks in the country, almost two times lower than the previous year, Rosselkhoznadzor estimated.

It requires a huge effort from Rosselkhoznadzor to prove to Russia’s trading partners that the exports from ASF-free areas don’t pose unjustified threats. Russia’s territory is so huge that it really makes no sense to ban imports from the whole country, not only in terms of ASF, but also for avian influenza, FMD, Newcastle and other animal and poultry diseases​,” Davleyev said.  

As a result, what Russian meat exporters need even more than money is regionalisation and compartmentalisation programs at a federal level, Davleyev stressed.

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