The guest of our column today is Alexander KUPRYAKOV, Acting Deputy Chairman of the Government of the Khabarovsk Territory - Minister of Agricultural Production and Rural Development of the Khabarovsk Territory
Omsky Biocluster: Good afternoon, Mr. KUPRYAKOV!
Alexander KUPRYAKOV: Good afternoon!
Omsky Biocluster continues the ‘Regions of Russia’ heading. Tell the readers of our cluster about the profile of the Khabarovsk agro-industry: which segment is the main one?
Crop and animal production can equally be called the main sectors of the agro-industry of the Khabarovsk Territory. Fodder and grain crops, soybeans, potatoes, and melons and gourds predominate in plant farming. Animal husbandry is represented, perhaps, by traditional sectors: dairy and beef cattle breeding, poultry farming. By the way, domestic reindeer breeding is developing in the northern regions of the Khabarovsk Territory.
And to be more precise?
According to the results for 2017, the gross volume of agricultural products produced in the Khabarovsk Territory amounted to 25.1B RUR ($ 381.98M), including 17.3B RUR ($ 263.28M) crop production, 7.8B RUR ($ 118.7M) livestock production. In real terms, farms of the region in 2017 produced 16.8K tons of grain fodder, 44.2K tons of soybeans, 247.6K tons of potatoes, 60.3K tons of vegetables, live weight of meat 17.5K tons, milk 29.9K tons, 290.6M eggs. We also increase the sown area, their size in 2018 amounted to 81.3K hectares, which is higher than 2017 by 9.9% or 7.3K ha.
How far do the farms of the Khabarovsk Territory manage to provide the residents of the region with local food?
Today, the region still imports most of the food, if you look at the whole food balance. Meat, milk and related products - here the level of security is 11%, this is low, there are 35% for vegetables, we have increased the security for eggs (78%) and potatoes (93%) quite well. But I want to draw attention to the dynamics for the six months of this year: we have an increase in livestock and poultry meat 85%, milk 92%, egg 107%.
We do not move erratically, it is a systematic, controlled process. The Regional Government and farmers, as part of a public-private partnership, are consistently implementing the Concept of Food Security of the Khabarovsk Territory for the period up to 2020. What results should we achieve? We must grow an additional 10.0K tons of vegetables in greenhouses year-round, which will reduce imports of these products by 15% and increase the self-sufficiency of the region with greenhouse vegetables from 13% to 24%. We will increase self-sufficiency in meat (up to 31%) and milk (up to 15%).
Actually, we form our policy in the field of state support in such a way as to stimulate the economy to modernize existing industries, to build new facilities. At the same time, they must be high-tech, ensure maximum efficiency of the business model. In 2018, state support for the regional agro-industry is provided in 34 directions, 18 of which (52.9%) are co-financed from the federal budget. The total amount of funds to support agriculture is 236.8M RUR ($ 3.6M).
What role does the small and medium business play in the agricultural sector?
The main share of agricultural products is produced by large agricultural organizations: milk — 90.0%, meat — 87.0%, and egg — 99.9%. Farmers produce less: milk - 13.0%, meat - 10.0%. The farmsteads of rural residents are mainly produced for their own needs. But we have agricultural weekend trade fairs. Peasant farmers and gardeners at the fairs offer a wide range of meat, dairy, vegetable products and other food products. In addition, September 8, the annual Harvest Festival Exhibition-Fair was held for the second time in Khabarovsk, at which a record was set for sales of farm products. Thus, Khabarovsk residents and guests of the city purchased 27,000 eggs, 2.5 tons of potatoes, over 2 tons of meat, 2,000 units of dairy products, 1 ton of pumpkin and about the same amount of honey per day. This is five times higher than what is sold at traditional weekend fairs.
Mr. Kupryakov, such a large-scale growth probably requires raw materials…
Are you talking about the size of land and the amount of water, about energy? This is certainly important, but the regional government considers rationality for the use of resources to be one of the core criteria for the effectiveness of a business model. If we develop resources only by increasing the acreage, as I mentioned earlier, the construction of new energy facilities, this is completely inadequate. Our efforts should be directed towards maximum manufacturability and energy efficiency.
For 2018, the total area of agricultural land in the region is 397K ha, which is 22K ha more compared with 2017 due to transfer from the category of reserve lands. Arable land in the structure of agricultural land is 76K ha, hayfields - 96K ha, pastures - 39K ha, fallow lands - 17K ha. But you will pay attention to the dynamics of the introduction of new lands and the dynamics of production - such growth is ensured, first of all, by rational use of natural resources and rational management of resources.
Let's talk about the agricultural products export. Is this today another trend for the regions?
This is not just a trend, it is an urgent need. The modern economy is a multidirectional phenomenon. The business organizes commodity flows based on final profits. And for the region, the export of products is an extension of international cooperation; this is also the regional brand, including the opportunity to tell about our capabilities.
I think that Khabarovsk farmers have large reserves in export. We export cereals and soy beans to Japan and China today. In 2014 - 2017, the export of cereals amounted to 79.4K tons for a total of $ 15.1M, the export of soy beans for the same period amounted to 38.0K tons for a total of $ 11.0M. But we are obliged to change the format to non-primary exports, to products with high added value.
The transition to a non-primary economy requires a transformation of production capacity, not only the modernization of existing, but also the construction of new ones. These are new technologies, these are investments. Please tell us what significant projects in the agricultural sector did you manage to implement in the Khabarovsk Territory in 2017, what facilities are being built today?
Let me start with the poultry industry. Khabarovsk Breeding Poultry Plant JSC in June 2017 put into operation a hatchery with a capacity of 320K eggs of a one-time egg laying. About 67M RUR ($ 1.01M) were allocated for the project, including 20M RUR ($ 0.3M) from the Regional Agricultural Fund. The new hatchery allowed to increase up to 15 one-time egg laying (up to 5M eggs per year), which is four times more than the capacity of the previously existing hatchery, and also made it possible to reduce the cost of production.
October 2017, Komsomolskaya Poultry Farm JSC completed the modernization of the building for housing laying hens for 70K heads in Komsomolsk-on-Amur. The company is a resident of the Territory of Advanced Socio-Economic Development (type of special economic zone) Komsomolsk, the Agro-Industrial Site. The design capacity of the enterprise is 100M eggs per year, the amount of investment for the modernization of the complex amounted to more than 50M RUR ($ 0.75M). The reconstruction allowed to increase the poultry population by the end of 2017 to 450K heads, egg production in 2018 is planned to increase by 15 - 20 %.
The pig industry is also developing. SKIFAGRO-DV LLC is building a pig farm for 70K heads, the planned design capacity of 5.3K tons of steam pork and 0.6K tons of offal per year. The project cost is 2.2B RUR ($ 33.02M); in fact, 900M RUR ($ 13.51M) have already been invested. The project was recognized as a priority for the provision of regional state support. Commissioning of the first stage of the project is scheduled for the end of December 2018. As a result, we predict already in 2020 an increase in meat production in the region by 2 times compared with the 2017 figure. On September 28, 2018, the first batch of four-month-old piglets was brought to the farm. In total: 296 heads of the hybrid breed F1 from Vishnevsky LLC (Orenburg region), another 1,400 pigs will be delivered in October. At the end of Q1 2019, it is planned to import 1,200 heads of pigs from Canada.
Investing in greenhouses. This direction is actively developing throughout the country. Farmer Butkov has already completed the construction of the fourth stage of the greenhouse complex with the production volume of up to 600 tons of vegetable products per year worth 180M RUR ($ 2.69M). The products are supplied to the cities of the Khabarovsk Territory and to the neighboring regions - Amur region, the Primorsky Territory, Kamchatka. State support amounted to 7.6M RUR ($ 113.58K).
And I have listed only Russian investors.
What investment projects in the agro-industry are being implemented in the region with the attraction of foreign investors?
The directions are the same, but investors need optimal conditions for investment, and we need to understand them, relate to Russian legislation, our budget opportunities, and work punctually with foreign investors.
JGC Evergreen LLC, the Russian-Japanese investors, came to the same greenhouse, the second phase of the greenhouse complex for growing greenhouse vegetables was commissioned in 2017. The company is a resident of the Territory of Advanced Socio-Economic Development ‘Khabarovsk’, Avangard Site. Project cost: 2B RUR ($ 29.89M). The total area of the greenhouse complex will be 10.3 ha, the volume of production - 6K tons of vegetable products per year.
Tomatoes, cucumbers, radishes, lettuce, arugula are grown in greenhouses, trying to grow sweet peppers. The company's products with the New Day logo are supplied to large retail and restaurants of the city, the company is developing its own trading network. Now we are considering documents for the provision of a state support project in the amount of 232.6M RUR ($3.48M).
Chinese investors are implementing several projects.
Zvezda LLC will invest 7.6B RUR ($ 113.58K) in a project for the production of corn for grain - 72.0K tons, soybeans - 8.7K tons, the construction of a vegetable storehouse for 15.0K tons, products intended for shipment to export. The project is recognized as a priority and large-scale for the region.
Khabarovsk Agricultural Company LLC chose a previously unused site for soybean production - 6.0K tons and grain crops - 20.3K tons, the cost of the first phase of the project is more than 1B RUR ($ 14.94K).
As Omsky Biocluster, we are certainly interested in the development of agro-clusters in other Russian regions. The agro-industrial cluster of Komsomolsk-on-Amur was established in the Khabarovsk Territory. How did the cluster appear?
Komsomolsk-on-Amur is an eastern outpost of the Khabarovsk Territory, a large industrial agglomeration with a population of 369.5K people. The distances in the Far East are significant, and, therefore, there are features in logistics.
In order to create a sustainable basis for the development of the Komsomolsk agglomeration agroindustry and ensure food security, the Khabarovsk Territory Government approved the Concept of Creating an Agro-Industrial Cluster within the territories of Komsomolsk-on-Amur, Amursky, Komsomolsky, Polina Osipenko Settlement, Solnechny municipalities. This is a basic document for the development of the cluster, which is now being consistently implemented by the joint efforts of the Territory Government, municipalities and the business community.
What are the goals for agrocluster? What is its main profile?
The cluster profile is meat and dairy cattle breeding, greenhouse vegetables. That is, the products that should be fresh daily come to the menu of residents of the Komsomolsk agglomeration. By 2025, after seven years, we should reach an annual milk production within the cluster of 65K tons, beef meat 3.7K tons, pork meat 6.7K tons, poultry meat 11.5K tons, fresh vegetables from greenhouses 6K tons. Today, the Agro-Industrial cluster of the Komsomolsk agglomeration produces eggs and greenhouse vegetables, the cluster enterprises here are seriously modernizing production facilities with access to a new technological level, and the Territory Government provides them with state support.
Together with municipalities and businesses, we now form a further production chain for meat and milk, and we interact with potential investors.
What are the goals facing the agro-industry of the Khabarovsk Territory until 2020?
We must significantly increase the share in providing the region with its own food, while expanding the export of our agricultural products. And here I see no contradictions. Once again I want to say that today commodity flows are always multidirectional, the consumer want to see products not only local manufacturers, but also neighbors, sometimes something exotic. But when local companies produce the bulk of food, it is a guarantee that consumers will not be deprived of ‘daily basket’ products, and these products will be fresh and affordable.
Speaking in numbers, we set the tasks to reach by 2020 year 113.2K tons of potatoes, 21.5K tons of grain and leguminous crops, 7.5K tons of greenhouse vegetables, 33.8K tons of milk, 301.1M eggs, production of livestock and poultry for slaughter 21.5K tons.
I believe that with an efficient organization of the agro-industry management, a competent format of state support measures, the goals set by the regional government are absolutely real.
Mr. KUPRYAKOV, thanks for the interview! Allow me to wish the Agro-Industrial Cluster of Komsomolsk-on-Amur sustainable development, and all the farmers of the Khabarovsk Territory - new and interesting investment projects!
Omsky Biocluster Press Secretary Ravshana Balloyeva