Russian Government Invests US$11 Billion to Implement Agricultural Import Substitution Program

Russia’s Deputy Agriculture Minister, Dmitry Yuriev announced the final draft of a plan by the Russian government to invest US$11 billion to establish and implement an import substitution program for its agricultural industries.

One third of the total investment will be allocated to the development of the country’s meat industry. An investment of this scale will allow the country to increase its production of meat from 8.5 million tons in 2014 to 10 million tons by 2020 while reducing imports by 68% to between 400,000 and 500,000 tons.

Those involved in the Russian meat sector believe that the program will significantly affect the industry. Under the program, Russian pork imports are planned to decline from 620,000 tons in 2014 to 185,000 tons in 2017, and in the same time period, poultry imports are forecast to decline from 549,000 tons to 158,000 tons.

The head of the country’s National Meat Union, Mushegh Mamikonian, states that meat consumption patterns will shift as well. In 2015, poultry will account for 45% of total meat consumption, pork, 35%, and beef, 20%. By 2020, under the new program, the share of pork will remain consistent, but poultry will account for 50% of total meat consumption, and beef will decline to account for only 15% of total meat consumption.

The amount of state funding allocated to the pork industry should equal US$3.8 billion allowing the country to construct new pork production facilities with an expected capacity of 1 million tons of pork per year. However, because of the closure of older, less efficient farms more affected by African swine fever, the net yearly increase in production will likely equal 500,000 tons per year.

By 2020 Russia’s goal is to reach 85% self-sufficiency in meat production across all types of meat, but to achieve this, the country will need to develop export supplies, according to the head of the executive committee of the Russian National Meat Association, Sergey Yushin. Talks are currently being conducted with the EU, Canada, and China, however negotiations are not expected to be concluded for three to four years.