Syngenta is introducing the 5th Russian Agricultural Producers Development Index, developed in partnership with the Institute for Agricultural Market Studies (IKAR) and analysts from ifors (Ayfors) and VTsIOM (All-Russian Public Opinion Research Center), the company’s press service told The DairyNews.
This year, the growth of conservative sentiments regarding long-term investments is recorded as determining factors, but in the medium term, the expectations of farmers remain positive. Separate concern of agricultural producers is caused by the epidemic COVID-19. About 57% of respondents believe that a pandemic will adversely affect the industry as a whole. Only 2% of respondents reported a positive impact.
In general, the results of the 5th Index showed that the dynamics of the development of the agricultural sector is in a stabilization phase. In particular, respondents rated the 2019/2020 season at 3,61 out of 5 points, while the 2018/2019 season received a rating of 3,67. The most successful period for the entire duration of the study remains 2016. In the 2019/20 season, 16% of farms managed to expand the sown area, since 2017 this figure has decreased by 11 percentage points. The main share of interviewed agricultural firms left the sown area at the same level.
In 2018, 67% of households hoped to increase their income; this year, 63% turned out to be such. At the same time, it is worth noting that the percentage of respondents who expect significant revenue growth has decreased by almost 2 times (18% in 2020 and 35% in 2018), and those who expect to maintain income at the same level remained almost unchanged (28% in 2020 compared to 23% in 2018). In 2020, agro-industrial enterprises plan to increase profitability primarily due to the high yield and low cost of the product (71%), improving the quality of products sold (42%) and high prices for crop production (37%).
The attractiveness of loans for farmers is gradually decreasing. If in 2018 76% of respondents said that they use loans, in 2019 this figure was 73%, and in 2020 - 71%. The share of respondents who have increased their investments in fixed assets this season is 66%, which is 9 percentage points higher than the data for 2018. The percentage of those planning to increase investment in working capital has increased even more - 64% in 2020 compared to 44% in 2018. As for the introduction of new methods and technologies, in the current season agricultural firms, first of all, plan to introduce new approaches to seed production - 56%, in the protection of crops - 55% and fertilizers - 50%.
“Despite the uncertainty that has been observed in the industry recently, in our practice we have fixed a constant high interest in new technological solutions that allow agricultural producers to guarantee yields and increase the efficiency of crop production in general. The cost of seeds and remedies is certainly an important factor, but efficiency and increased productivity ultimately become decisive for farmers. Russian farmers have learned to calculate risks and have duly appreciated the benefits of applying comprehensive measures to increase yield and product quality, ”says Jonathan Brown, director of Syngenta in Russia, who commented on the results of the study.
“Now the agricultural market is in a state of high uncertainty, and in this situation, most farmers choose stabilization strategies, which are clearly demonstrated by the results of the study. In the global market, after a short-term panic and the rush of demand for certain types of food resources caused by it, there has been a fall in business activity and prices due to the deepening global economic crisis. The depreciation of the ruble, on the one hand, is beneficial to domestic farmers, but, on the other hand, makes it difficult for them to access many advanced world technologies. The contradictory consequences of the crisis will be felt for several years, ”said Dmitry Rylko, Director General of the Institute for Agricultural Market Studies (IKAR).