Development of Russia's agriculture as a factor promoting the solution of the world food problem

Source: calculated by the data of the Federal State Statistics Service. Available at: rosstatsite/main/enterprise/economy/#

opportunities for technical modernization of production. In 2011 the decision was made to supply agricultural machinery to domestic producers with a 50% discount. In addition, the state started to compensate for the costs of legalizing the peasants’ ownership of land plots.

The authorities have started to handle the problems of social development of the village more efficiently. 5.7 million square meters of housing was constructed in rural areas in 2008 – 2011, which improved the living conditions of 80 thousand families. Over 20 thousand km of gas distribution networks were laid, the construction of medical and obstetrical stations, schools and other social infrastructure objects is going on5.

At the regional level the decisions were made on the provision of specialized financial support to young professionals, who came to work in rural areas.

Of course, the implemented measures of state support to the domestic agro-industrial complex could not, for objective reasons, solve all the problems. But these measures helped maintain its financial stability, create a certain margin of safety. Therefore, some positive results have been achieved, such as the enhancement of production of the main types of agricultural products. For instance, the bulk yield of sugar beet and sunflower seeds in all types of farms in Russia has increased 3.3-fold and 2.5-fold, respectively, in comparison with the 2000 level (tab. 2) . The production of cattle and poultry for slaughter increased by 56%, grain production – by 36%, egg production – by 20%.

The progress in the agricultural sector enhanced the level of the country’s selfsufficiency concerning the main types of food and the achievement of the values of the indicators set by the Food Security Doctrine (tab. 3) . For example, in 2011 our country satisfied its needs for grain by more than 130%, for sugar – by 127%, milk – by 80%.

Some enterprises purchased new high-performance and resource-saving machinery and equipment, which resulted in costs reduction, improving the product quality and enhancing labour productivity. According to N.V. Fedorov, the Minister of Agriculture of Russia, for the last five years more than 700 facilities for pig-breeding, about 400 – for poultry production and 200 – for the production of cattle meat have been constructed and upgraded [1].

The state programme for agricultural development for the period up to 2020 was approved in July of the current year. It is aimed at the comprehensive development of all the branches of the agroindustrial complex with the view of Russia’s accession to the World Trade Organization. In order to adjust the agricultural sector to the new conditions of economic environment, Russian Government envisages a gradual transition from the provision of direct subsidies to agricultural producers to the promotion of their profitability. Starting from 2013, for example, it is intended to provide a subsidy for 1 litre of milk that conforms to the established standards of quality. In addition, there will be an increase in the volume of funds allocated for the activities comprising the so-called “green basket”, i.e. information and advisory services, crop

Table 2. Production of basic kinds of agricultural products in the Russian Federation in 1990 – 2011, million tons

Product 1990 2000 2007 2008 2009 2010 2011 2011 as compared to 2000, % Sugar beet 32.3 14.1 28.8 29.0 24.9 22.2 46.3 3.3-fold Sunflower seeds 3.4 3.9 5.7 7.3 6.4 5.3 9.6 2.5-fold Cattle and poultry for slaughter (in live weight) 15.6 7.0 8.7 9.3 9.9 10.5 10.9 155.7 Grain 116.7 65.4 81.5 108.2 97.1 60.9 94.2 144.0 Vegetables (grown in the open) 10.3 10.8 11.5 13.0 13.4 12.1 14.7 136.1 Eggs, billion pieces 47.5 34.1 38.2 38.1 39.4 40.6 41.0 120.2 Potato 30.8 29.5 27.2 28.8 31.1 21.1 32.6 110.5 Milk 55.7 32.3 32.0 32.4 32.6 31.9 31.7 98.1 Source: Federal State Statistic Service. Available at:

Table 3. Level of self-sufficiency of Russia by the main types of foodstuffs and agricultural products required for their production, %

Russia possesses considerable reserves for the enhancement of agricultural production due to a more complete, efficient usage of agricultural potential in the southern as well as northern regions. The experience of the Vologda Oblast indicates that even under these harsh natural and climatic conditions (location beyond the 60th parallel, low temperatures, short summers) the production of milk, meat and eggs can be profitable if the farmers master new equipment, machinery and technology. It is worth mentioning, that so far the technical and technological modernization of production is being carried out in some of the region’s enterprises.

According to the experience of the Breeding Collective Farm Named after the 50th Anniversary of the USSR (Gryazovetsky District), the loose cow housing method with milking in modern milking parlours allow for a 2.6-fold reduction of labour expenditures for the production of 1 quintal of milk, a 10% reduction of its production cost, and a 18% increase in profitability (tab. 4) . The use of robotic milking machines gives even more impressive results: labour productivity increases 4-fold.

The leading farms of the oblast are implementing such technologies as minimum tillage, grain rolling, and procurement of fodder in polythene bags. Agricultural enterprises purchase state-of-the-art machines and equipment, which, along with high-precision operating, allow for reducing the unit costs, labor intensity and works execution period. It is proved by the experience of the Integrated Agricultural Production Centre Collective Farm Peredovoy located in the Vologodsky District. The use of the “Rapid” complex, which simultaneously breaks the ground, adds fertilizers and sows grain, resulted in reducing the number of technological operations in the field from five to three, and also in reducing fuel consumption per 1 ha by 18% and labour costs by 27% (tab. 5).

The considerable volume of reconstruction and modernization works was carried out on the oblast’s poultry farms as well. As a result, the production of eggs increased by 18% in 2008 – 2011 (from 510.6 to 601.5 million pieces). In order to create technologically adjoint production clusters, the region’s Government together with the management company Dominion developed and launched the project “Development of the Vologda Oblast linen complex through inter-sectoral and interterritorial integration”, the main task of which is the profound modernization and technical re-equipment of all the enterprises of the production chain.

Thus, in the recent years, the agroindustrial complex has achieved some positive results. However, the macroeconomic situation remains difficult, which has a negative impact on the investment climate in the agro-industrial complex, the balance of exports and imports of agricultural products.

Table 4. Economic indicators of cow milking technologies at the Collective Farm Named after the 50th Anniversary of the USSR (Gryazovetsky District) in 2010

Indicator	In total	Including by technologies
		Tethered housing	Loose housing
			With milking in the milking parlour	With robotic milking
Labor costs for the production of one quintal of milk, p./ h.	1.23	1.83	0.70	0.45
Cost of milk production, rub. / kg	9.65	10.10	9.03	9.53
Profitability of milk production, %	56.0	49.0	67.0	59.0
Source: Collective Farm’s own data

Table 5. Labor and fuel costs for different grain seeding technologies at the Integrated Agricultural Production Centre Collective Farm Peredovoy (Vologodsky District)

Processing steps, machinery	Теchnology
	Traditional		Using “Rapid” complex
	Fuel per 1 ha, kg	Labour costs, p. / day	Fuel per 1 ha, kg	Labour costs, p. / day
1.Under-winter ploughing Tractor John Deere, plough “Lemken”	18.0	0.085	18.0	0.085
2.First cultivation
Tractor T-150, cultivator КBМ-7,2	7.3	0.05
Tractor T-150, cultivator КBМ-14,0	-	-	3.5	0.026
3.Fertilizing			8.05	0.07
Tractor MTZ with the disperser “Amazone”	0.46	0.013
4. Second cultivation
Tractor T-150, cultivator КBМ-7,2	7.3	0.05
5. Sowing
seeding-machine “Amazone”	3.0	0.05
Complex “Rapid”	-	-
Total:	36.06	0.248	29.55	0.181

Besides, it hampers the transition of Russian agriculture to the path of sustainable development. In this connection the country’s authorities, the subjects of agribusiness have much work to do for minimizing the emerging risks and enhancing participation in solving the global food problem.

In our opinion, the enhancement of agricultural producers’ profitability up to the level that allows an expanded reproduction should become the top priority of the state policy in the agrarian sphere. According to the estimates, the profitability of production on the average for the sector should be enhanced to 20 – 25%. Meanwhile, even with all the kinds of state support, this indicator in Russia doesn’t exceed 10% [3]. In this connection, in our opinion, support measures should be further developed, which will allow the optimal balance to be achieved between the prices for agricultural products, and resources used for their production. Only in this case, agricultural producers will be able to overcome the continuing technical and technological backwardness of agriculture of Russia as compared to the economically developed countries.

Another condition of dynamic development of Russia’s agroindustrial complex is the implementation of measures to regulate the sales of domestic agricultural products. Unfortunately, many farmers and farm enterprises in Russia (especially small businesses) have no access to the market due to the imperfection of its infrastructure, increasing monopolization of trade networks and weak development of cooperation. And some private traders-speculators in the absence of competition set ridiculously low prices for agricultural products, which makes their production unprofitable and brings frustration to agricultural workers. The solution of this problem, in our opinion, requires the authorities’ adoption of measures aimed at supporting the establishment and development of cooperatives.

As Ivano Barberini, President of the International Cooperative Alliance noted, only highly efficient cooperative structures will be able to enter a fairly narrow door of the global world market, they are the best enterprises with the provision of social guarantees. The justice of his words is also proved by the experience of American farmers, which shows that if the country were deprived of supply- sale cooperative societies, its agriculture would collapse in half a year. Thus, Russia has the short-term perspective of carrying out a considerable amount of activities on the development of cooperative movement.

The growth of agricultural production and the competitiveness of the industry cannot be achieved only by introducing new equipment and technologies and establishing intersectoral exchange parity in the agro-industrial complex. This requires, among other things, the qualified personnel, meeting the requirements of innovation development. Present-day Russia experiences a discrepancy between the knowledge and skills provided by agricultural education institutions, and the needs of the agroindustrial complex innovation development6. In this regard, we believe that the urgency of the personnel issues in agriculture could be reduced (naturally, with the support on the part of the RF Ministry of Agriculture) by increasing the number of students at agricultural education institutions, the number of managers and specialists of the sector, trained abroad and in the leading agricultural enterprises of the country.

In order to prevent the outflow of professionals from the agricultural sector we need to take decisive actions for the development of social, engineering, transport, household infrastructure of the village; we should also consider the issue of providing additional financial support to the workers of the sector.

In our opinion, the major efforts of the authorities should be directed to the solution of all these problems after defining appropriate measures and adequate funding. Only in this case it would be possible to ensure the country’s food security and increase the volumes of food export.