The role of import substitution in ensuring food security

The formation and development of import substitution of food products in Russia due to the objective and is the most important factor in achieving food security.

One of the distinguishing features of the Russian food sector is, on the one hand, a greater potential due to geographical and natural factors, on the other – «underdeveloped» in terms of processing technologies and price competitiveness. These factors led to growth in the share of imported foodstuffs in the structure of total imports of goods (Table 1). For example, in 2013 the volume of imports of foodstuffs and agricultural raw materials as a whole in Russia totaled 43,1 billion. USD, and in the dynamics of the last decade has increased by almost 6 times.

Table 1 – Imports of certain food products in Russia, thous. USD

Name of product	2004	2010	2011	2012	2013	2014
Cocoa beans	125598,9	211717,6	219 468,2	202492,6	186401,0	213151,3
Potatoes, fresh or chilled	-	-	-	233028,8	233489,2	381853,5
Coffee	45 769,8	333032,7	516 949,7	517925,2	517818,5	571560,6
Pasta	-	-	-	135092,7	135159,5	144364
Sunflower oil	125712,4	119596,1	125935,4	23618,2	23652,1	11029,2
Butter	-	-	-	54 272,6	562639,7	601293,5
Milk and cream not concentrated nor containing	-	-	-	273288,1	277550,5	291538,5
Milk and cream, concentrated	187 107,1	650581,7	499434,4	764038,1	788972,1	627437,9
dry milk	-	-	-	625763,9	649300,3	520186,5
Like fresh poultry meat	683843,4	939148,1	749628,5	839337,5	847977,7	798295,3
like fresh meat	1445246,1	4703031,1	5284109,4	5455729,4	-	-
Alcoholic	1171190,2	2264135,4	2764348,2	3408683,4	3407412,8	3065700,1

Name of product 2004 2010 2011 2012 2013 2014 beverages and soft drinks Fish, fresh frozen 568871,8 1689981,7 1891110,2 1952582,2 - - Sugar white 250819,3 212710,8 206308,1 47633,7 47796,5 178856,1 Cigarettes and cigars 53615,5 127 799,01 103576,2 117301,7 117301,7 119265,9 Citrus 348488,2 1280399,82 1571553,94 1677044,2 1677989,6 1485966,8 Tea 292617,5 563181,74 626660,78 683967,4 657075,9 645482,3 Chocolate and other foods containing cocoa 254004,3 634820,5 802158,11 777720,2 778987,7 629394,8 Fresh apples - - - 787 942,2 789 444,3 617816,7 Source: official statistics of the interagency statistical information system (EMISS) [Electronic resource]. – Access mode::

In the Vologda region the share of food imports in 2013 amounted to 7% of the total volume of imported goods (in 2009 – 3,1%; Table 2).

Table 2 – The volume of imports and exports of food Vologda region

Name of product 2009 2010 2011 2012 2013 Food imports Imports, total, mln. USD, including 428,4 362,6 792,0 651,3 674,0 - food products and raw materials for their production 13,3 25,6 38,8 38,7 47,5 Import all,%, including 100 100 100 100 100 - food products and raw materials for their production 3,1 7,0 4,9 5,9 7,0 Food exports Exports, total, mln. USD, including 2522,0 3941,4 4860,0 4456,9 4103,1 - food products and raw materials for their production 8,3 11,8 11,3 13,3 18,8 Exports, total,%, including 100 100 100 100 100 - food products and raw materials for their production 0,3 0,3 0,2 0,3 0,4 Source: official statistics of the interagency statistical information system (EMISS) [Electronic resource]. – Access mode::

Thus the need for formation and development of the system of import of food products is objectively determined and is a crucial factor for achieving food security.

Special urgency the problem in question has acquired due to the introduction by the President of the Russian Federation Decree of August 6, 2014 №560 «On the application of certain special economic measures in order to ensure the security of the Russian Federation». The list of prohibited for import to Russia of agricultural products, raw materials and foodstuffs originating in the United

States, European Union, Canada, Australia and the Kingdom of Norway for a period of one year, banned in Russia came the meat and its derivatives from cattle, pork birds, fish, crustaceans, molluscs and other invertebrates. In addition, it includes milk, dairy products, vegetables, edible roots and tubers, fruits and nuts. Yet the prohibition also included cheese, cottage cheese and milk-based products of vegetable fats [3, 5].

One of the criteria for compiling this list is to have the resources to import. In this regard, the Government of the Russian Federation on the basis of the analysis of the markets of agricultural products, raw materials and food, including based on the lack of domestic production or insufficient number of Russian analogs on August 20, amended the list of prohibited for import to Russia of agricultural products, raw materials and food. So it was excluded some headings: fingerlings, seed, lactose-free dairy products, vitamin-mineral complexes, etc. The heading also were excluded to reduce damage to Russian manufacturers of the ban.

In order to ensure the substitution of imports from countries which have got under the Russian retaliatory sanctions, Rosselkhoznadzor has opened access to the Russian market for many suppliers from Latin America and the BRICS. Close domestic demand for dairy products in the country in the short term will Belarusian producers.

Despite the introduction of the food embargo, the question remains open about the possibilities of the Russian agro-industrial complex promptly reimburse the amount of the banned import of agricultural products, raw materials and food (pork, vegetables, fruits, etc.).

It is assumed that the agro-industrial complex of Russia should move to the accelerated import substitution regime, as currently the country's agro-industrial complex can not provide all of the domestic food market their own production, as government support for the industry are extremely inadequate and worn out fixed assets and an acute shortage of qualified personnel. At the same time, Russia's WTO accession "discovered" the domestic market for more powerful competitors. Accordingly, the risk of bankruptcy of the agricultural organizations and the industry in which public support is provided in small volumes or not provided at all.

It should be noted that some regions of Russia is ready to expand the volume of agricultural production to replace food imports. Which regions include the Kirov region, the Orenburg Region, Volgograd Region, Krasnodar and others. According to their governing bodies, the area received a "strong incentive to use their potential and together with manufacturers from other Russian regions provide a complete food import substitution in the country [5].

The Government of the Rostov region is organizing for large retail chains purchase special session, which is presented further potential local suppliers. The governor of Krasnodar region Alexander Tkachev announced the preparation of a new boundary integrated program of development of agribusiness, which will increase the volume of state support and, in particular, tasked to bring in the next few years, the area of the greenhouses from the current 100 hectares to 500 hectares, increase the area of the gardens, to introduce a system of drip irrigation, 4-5 to build logistics centers. Stavropol promptly submitted to the federal Ministry of Agriculture programs, six «regional agricultural breakthrough». In the area of agricultural production region predicts 30% increase in agricultural production over the next two years – compared to the current pace of economic development in general, stated the speaker is really impressive [5].

Note that this is the southern agricultural regions may have the most to take advantage of the opportunities in the field of food import.

The Vologda region government has also intensified work on import substitution and have begun to promote the project branded «Genuine Vologda Product». «A year ago we launched a program of import substitution. The region has the possibility of self-sufficient in eggs, milk and potatoes. We are 46% can provide themselves with vegetables and 40% meat products», – said the regional governor Oleg Kuvshinnikov [2].

For this purpose increased state support for the agricultural sector. «If in the past year from the regional budget has been allocated 1 billion rubles, in the current year agrarians will receive 1,5 billion rubles regional subsidies» [3].

According to the federal program in the Vologda region is implemented as regional programs aimed at ensuring food security in the region. New direction – development strategy increasing the volume of the finished meat, dairy and vegetable products of high quality. The regional government intends to consider and support projects of agricultural and food industry organizations aimed at import substitution and ensuring food security in the region.

It should be noted that the food market of the Vologda region the share of imported food and raw materials for their production is about 35% (as in Russia as a whole). The main imported products are: meat and meat raw materials for industrial processing, fish, canned vegetables, cheese, coffee, tea, cocoa, fruits, nuts, branded spirits, confectionery (Table 3). In the region of 100% imported sugar, vegetable oil and cereals, about 90% of the fish and sweets, more than 80% of cheese and flour, 50% of meat for the production of sausages.

Table 3 – Imports of certain types of food products in the Vologda region, tons

Name of product 2009 2010 2011 2012 2013 Frozen pork 260 96 - - - Fresh fruits, dried 2596 3572 606 251 393 Fresh vegetables, including 72 140 80 211 321 - potatoes 60 140 80 100 186 Flour and cereal products, including 5384 7970 5945 3653 4339 - flour 2739 2798 2421 - 3594 Sugar white 255 1743 12500 5763 11662 Confectionery 0,9 0,6 - - - Stewed fruit, juices 23 21 - 8 42 Source: Official statistics authority of the Territorial Service of State Statistics of the Vologda region [Electronic resource]. – Access mode:

In general, it is expected that the entry of agricultural products from the regions to the domestic market will also contribute to the cooperation agreement concluded with the Ministry of Industry and Trade of Russia.

If you do not consider a ban on the import of foodstuffs in a political context, in general, it meets Russia's state policy on the development of their own agricultural production. The Russian Government has begun development programs on import substitution of food to ensure food security. In our opinion, it is advisable to develop a similar program at the regional level.

As part of the development of a «road map» plan provides for import substitution of import substitution, calculated for several years and provides, inter alia, more efficient use of farmland, strengthen control over production and the creation of an automated system of alert in relation to the sanitary products. As a result of all these measures, the Government intends to increase the share of domestic meat market to 92,3%, vegetables – to 89,9%, dairy products – up 83,4%. Note that the index of the volume of meat production was higher than in April approved the State program of agricultural development and regulation of agricultural products, raw materials and food for 2013-2020 (hereinafter – the State program; 88,9%), but the plans for milk It was more modest (previously expected 90,2%). It is also tasked, under the doctrine of food security, reduce Russia's dependence on the import of milk and 30%, meat – 30%, potatoes – to zero, grapes – up to 50%».

In addition to the legislative and institutional support, in the field of agriculture is planned to increase funding. «Despite the difficult and very tight budget, we were still able to find and additional funds that will be spent on the development of agro-industrial complex» – D.A. Medvedev [5, 6]. The april edition of the State program involves the allocation to agriculture 165.7 billion. Rub. in 2015, but only until 2020 – 1,525 trillion rub. After the embargo, Russian Ministry of Agriculture proposes to increase the cash infusion to 252,7 billion rub. in 2015, a total of 2020 – up to 1,797 trillion rub. [6].

Thus, the need for the formation and development of import substitution of food products in Russia is objectively determined and is a crucial factor in achieving food security. Thus, the question remains open about the possibilities of the Russian agro-industrial complex promptly reimburse the amount of the banned import of agricultural products, raw materials and food (pork, vegetables, fruits, etc.).

The sources used:

• 1.    Anischenko, A.N. Evaluation of food security in the region                   /

  A.N. Anischenko // Problems of development of the territories. - 2013. - №4 (66). - P. 30-39.

• 2.    The course - on import substitution [Electronic resource]. - Access mode: http://premier.region35.ru/gazeta/np881/s16.html

• 3.    Real import substitution from Vologda [Electronic resource]. - Access mode: http://expert.ru/northwest/2015/11/nastoyaschee-vologodskoe-importozameschenie/

• 4.    Approval of the Action Plan ("roadmap") to facilitate import substitution in agriculture for 2014-2015 [Electronic resource]. - Access mode: http://government.ru/docs/15135/

• 5.    Russian farmers are ready to provide full food import substitution [Electronic resource]. - Access mode: http://fishretail.ru/news/rossiyskie-agrarii-gotovi-obespechit-polnoe-prodovolstvennoe-328763

• 6.    Russia: Government approved a plan to import food [Electronic resource]. -Access mode: http://ukrprod.dp.ua/2014/10/12/rossiya-pravitelstvo-utverdilo-plan-importozameshheniya-prodovolstviya.html

  "Экономика и социум" №5(18) 2015