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As compared to most of the other industries, agriculture in Russia is growing at a relatively fast pace. Last year, agricultural exports rose to a record high. Yet further development of the sector largely depends on innovation and competitive position in global markets.
In 2016, agriculture proved to be one of Russia's fastest-growing industries, as it expanded by a whopping 4.8% against the overall GDP drop of 0.2%. In 2015, the agricultural output increased by 2.6%, while the GDP declined by 2.8%.
Government support, import substitution and growing exports were the main drivers behind this expansion.
One way or another, the industry still faces a number of challenges, like the need for upgrade, innovation, and a framework to support small producers.
To help agriculture expand at the current pace, the Government will need to address the issue of technical overhaul. Due to low margins in the sector, farmers have difficulties attracting investments without support from the Government.
The improvement in the agricultural employment requires support to farmers and development of rural infrastructure.
At the same time, innovation and efficiency improvement in agriculture pose new challenges, as the industry becomes increasingly dependent on talent, while redundancy in the sector may contribute to higher unemployment and population outflows. According to the Federal State Statistics Service, unemployment in rural areas is twice as high as in cities and towns. Hence, we need to come up with a comprehensive approach that would include the creation of processing facilities close to the agricultural production sites, along with employee development and retraining programmes.