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Russia should hurry to gain food independence while import freeze stays - analyst

January 30, 2015, 18:20 UTC+3 Alexandrova Lyudmila
© Vitaly Nevar/TASS

MOSCOW, January 30. /TASS/. Russia’s food doctrine, adopted five years ago, has served as a growth engine for the agri-industrial complex, but, as experts have been saying, while the availability of foods for retail customers has improved, the food independence, on the contrary, has declined as import grew. These days restrictions on the import of western foods, imposed in retaliation for anti-Russian sanctions, open up an opportunity for considerably building up domestic production. However, this will require both money and the ability of the authorities at all levels to conduct a dialogue with the producers.

On January 30, 2010 the Russian president signed a decree to approve of Russia’s food security doctrine, authored by leading Russian scientists. The doctrine described Russia’s food security as "a condition of the national economy that ensures the country’s food independence, guarantees to each citizen the physical and economic availability of foodstuffs matching legal requirements and in amounts no smaller than rational consumption norms necessary for an active and healthy lifestyle."

The doctrine says that food security is one of the main guidelines for maintaining national security in the medium term and a factor for preserving its statehood and sovereignty and a major component of demographic policies.

"The adoption of the doctrine, the awareness of food security as a component of national security was an extremely important event and provided a powerful impetus to positive change," Russian Academy of Sciences member Elmira Krylatykh, head of the corporate governance chair at the Russian Presidential Academy of the National Economy and Public Administration (RANEPA) told TASS.

Quite impressive successes have been achieved in agriculture, the manufacturing industries and in the agri-industrial sphere in general. The availability of foods has grown over years, but regrettably the contribution of import to that was too significant.

"With the growth of import supply improved considerably, but independence dwindled," Krylatykh said.

In 2013, Russia imported 43 billion dollars of foods, and exported 16 billion, the analyst added. At the moment import stands at about 35%-45% of consumed foods, although statistics vary considerably from territory to territory. In the meantime the share of import that can be considered harmless for food security is 15%, 20% at the most.

"The decline of the level of food independence is extremely dangerous," Krylatykh said.

She argues that import growth is "a result of ill-considered policies and some kind of euphoria that developed during the era of super-profits from the export of oil and gas and aggressive marketing policies by European food exporters."

When Russia imposed counter-sanctions and restricted the import of food from the western countries, the business prospects for the food production segment of the Russian economy improved considerably, she believes.

"It is a good message, but if the development of domestic production slows down and investment shrinks, the country may find itself in a no easy situation. The food production potential is good, but while import remains frozen time should not be wasted."

Import-suppressed dairy products manufacturing is the main problem, Krylatykh said. A special program has been adopted to encourage the production of milk. Fundamental investment is needed to restore pedigree breeding and buy good fodder. In Russia an average cow gives 4,000 liters of milk a year, while in Europe, 8,000-9,000 liters. "That’s an industry where on the condition of proper investment we may achieve results in three-four years’ time. There must be new agri-industrial complexes and their proper combination with private farms."

Under the government’s anti-crisis plan the agri-industrial complex this year is to get 50 billion rubles, an amount that Krylatykh sees as greatly insufficient. "There must be loans, measures to ease the tax pressures on the small and medium businesses. There are very many 30-and 40-year-old managers and specialists who are greatly interested in agriculture-related businesses. Private farmers are having a really hard time, she said. They are still exposed to racketeering and arbitrary land confiscations and the number of private farms is shrinking."

To give farming a powerful boost relations between the regional and federal authorities, on the one hand, and the farm producers must be revised fundamentally. There should be a dialogue of producers and retailers with ministerial officials," Krylatykh is certain.

"At the moment no such dialogue is underway, in contrast to what was observed even in the Soviet era. In the meantime, this situation can be changed quite easily. If that is done, those responsible for making decisions will have a better understanding of the real state of affairs.

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