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Russian agriculture output explosion means big machinery opportunities

increases in Russian agriculture production, nationwide demand top quality machinery and agricultural equipment has never been higher. 7.8% of Russia’s agricultural machinery is sourced directly from foreign firms, according to a report from Agroinfo – but this market share could rise substantially with Russia’s food output.

To gauge where the opportunities lie for equipment manufacturers, let’s delve into Russia’s production overhaul in detail.


Russian agricultural output soars



In the face of ongoing food sanctions, Russia has taken a typically bullish stance. Vladimir Putin’s government has turned towards domestic agriculture, its eye firmly fixed on achieving self-sufficiency. 

Russia aims to increase agriculture production by 24.8% by 2020. By then, Minister of Agriculture Alexander Tkachev hopes Russia becomes self-sufficient in food production.

Seemingly, Russia’s farmers heard Tkachev’s clarion call and reacted accordingly. Russia’s agricultural sector has shifted into overdrive, with record-breaking production levels being recorded.

 The country has reaffirmed its position as the world’s leading exporter of wheat, shipping approximately 23.5 million tons worldwide in 2016. According to Russian news outlet RT, agricultural exports totalled $15 billion in 2016 – the first time in history such exports had matched Russian arm sales.

Grain might be leading the charge, but other key agriproducts are seeing volumes shoot up too – especially meat. Rosstat figures say January-July 2016 witnessed a 13.3% rise in meat output, compared with the same period in 2015. 

Production of beef, which had been declining in 2015, grew 3.6% reaching 364.2 thousand tons through 2016’s first half. Pork, a mainstay of Russia menus, rose 15.4% to 1.38 million tons. Poultry production rose to a total of 2.37 million tons, growing by 5.7%, across the review period.

Dairy is also a big focus for Russia’s agro-sector too. The Putin administration has set a self-sufficiency target of 90%. Currently, Russian dairy farmers are meeting between 72-75% of demand.

Why this rapid rise in agricultural activity? The answer lies in geopolitics and government investment. Firstly, the delicate political situation with the West, and the range of food bans and counter-bans imposed, meant Russia had to focus on boosting agriculture. Otherwise, its 140 million plus population could not eat. 

Subsequently, the Russian government has set aside $9 billion to develop the agriculture sector before 2020’s looming self-sufficiency deadline. This sum includes state subsidies for Russian agricultural producers, in order for farmers to be able to invest in cutting-edge technology to bump up output levels.


Agricultural machinery needed in Russia – can you supply it?



Ekotechnica, German holding company for Russia’s leading dealers of foreign-branded tractors EkoNiva, confirms this increased demand for agro-machinery. 2016 saw the brand’s sales increase by two thirds, reaching around $95 million across January-September.

International suppliers of agricultural machinery are well placed to expand into Russia. Hot product areas in demand by Russia’s agricultural community include:

• Greenhouses & plant growing equipment
• Heavy equipment such as tractors, combine harvesters and other farming machinery variants
• Harvesting equipment
• Food processing, animal breeding & vegetable growing facility equipment
• Agricultural consulting

Agro-holdings, huge farming conglomerates controlling millions of hectares of land, alongside mid-to-small range enterprises all need supplying. Importers of specialised equipment are also on the lookout for products that can last under intense usage in rugged Russian conditions. 

Think your company can provide Russia with the agricultural equipment it needs? 2020 is getting closer each day – and with it comes Russia’s target of self-sufficiency. Production levels are already on the rise, but more machinery is needed to keep output numbers consistently stable. Don’t miss out on such a potentially lucrative market.

 

Related Events

Event24 Sep

WorldFood Moscow..

24-27 September, 2019
RUSSIA

MOSCOW, RUSSIA
Venue: CROCUS EXHIBITION CENTRE

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