In December 2018, experts from the Russian Academy of National Economy and Public Administration (RANEPA) published “Monitoring of the Economic Situation” with updated data on gross fees (taking into account the preliminary results of the 2016 agricultural census).
The largest discrepancies between the actual and declared figures were found when calculating the volume of potatoes (for example, when comparing the data of two reports for 2017, the difference was 35,9%).
Based on this, the RANEPA scientists concluded that the volume of Russian potato production is much less than previously expected (21 thousand tons), and this amount cannot be called excessive.
According to the authors of "Monitoring the economic situation", the country is potentially facing a shortage or an increase in imports.
In fact, about the same thing at the beginning of January 2018, representatives of the Accounts Chamber stated that they proved that the level of Russia's self-sufficiency in potatoes at the end of the harvest in 2017 turned out to be lower than the indicator established by the Food Security Doctrine, Russia provided itself with potatoes by 90,7% with a minimum 95%
Then this statement caused a lot of noise in the media, although no one felt the shortage of potatoes. As it does not feel now.
At first glance, 21,7 million tons is objectively not enough. Of these, 13-15 million tons are spent on food. Plus seeds (about 1 million tonnes), processing (1 million tonnes), storage losses (1,5 million tonnes), exports (150180 thousand tonnes), cattle feed ... Based on these data, I really want to urge potato growers to grow more ... But these are sly numbers.
“We do not know how much potatoes are grown in Russia,” comments Vladimir Denisov, general director of one of the largest potato and vegetable production companies in the Volga Federal District - the Samara enterprise “Scorpio” - and did not know before. But the exact figure does not matter.
And without it, it is clear that there is no shortage of product on the market.
The organization of storage in many farms is at a high level, there are freezers, large quantities of potatoes are stored until the beginning of summer. The best confirmation of this is the huge potato residues on the balance sheets of many Russian enterprises by June 2018, which were not realized due to the massive import of early potatoes from Egypt. Another thing is more important: the market has reached its limit, it is saturated, and in the coming years neither growth nor decline is expected ”.
From Denisov’s point of view, there is nothing wrong with this stability: professionals in the potato business who have the necessary technical base and bear the cost of only “consumables” can safely continue to do their work.
Potato production will not bring much profit, but it will help to stay in positive territory. “There is simply nowhere for prices to fall further,” says the head of Scorpion. “Manufacturers are already working on the brink of profitability.”
It will be more difficult for beginners, the cost of potatoes in such farms will be higher than average, which means there will be less chance to stay in the market.
Speaking about possible ways of development of Russian agriculture, experts traditionally offer two solutions. One of them is the intensification of exports. According to the federal project "Export of agricultural products", included in the updated program for the development of agriculture, the volume of export of agricultural products by the end of 2024 should be $ 45 billion. But even optimists do not expect records from potato growers in this direction.
Russian producers can actually supply table and seed potatoes mainly to neighboring countries, but it is very difficult to establish permanent channels even with neighboring countries, and often the decision to supply or non-deliveries of a product is more political than economic.
In addition, the need for potatoes in Azerbaijan, Uzbekistan, Kazakhstan is noted not every year, but mainly during periods of crop failure.
All these countries are actively developing potato growing and have achieved significant success in this. So, in Uzbekistan, the potato yield is at the level of 240-250 centners / ha, the gross harvest exceeds 1,5-2 million tons. In Kazakhstan, potato yields are about 300-400 c / ha, the annual harvest is over 3 million tons.
Azerbaijan also seeks self-sufficiency in potatoes. However, the development of exports in Russia is hindered by difficulties and a "non-international" nature.
According to Vitaly Leis, deputy general director for potato production at KRiMM, the main problem his company faces when organizing export deliveries is the lack of logistics.
Sending potatoes by road over long distances is too expensive, and deliveries of perishable goods in winter conditions by rail are not always possible due to the acute shortage of warm wagons.
It is no coincidence that many market experts say that export deliveries not of raw potatoes, but products of deep processing could become more promising. Moreover, in conditions of a low ruble exchange rate.
The development of processing is another way for the growth of the potato industry. But movement along it requires large investments, which are beyond the strength of most agricultural producers, and therefore is carried out at an extremely slow pace.
How long can the stagnation period in the potato market last? It is unlikely that any of the experts will be able to name the exact dates. Although the general trend is clear: the volume of potato production on personal farms will inevitably decline, and due to this, the industrial sector will develop. The transition process can take 10-15 years: in fact, so much time will be required for a generational change.
During this period, many small enterprises that failed to survive in conditions of low profitability and could not stand the competition will leave the market. The vacant niche will be quite significant. According to the executive director of the Potato Union Alexei Krasilnikov, commodity production of potatoes has the potential of double growth.
How much this volume will be in demand, time will tell. It is possible that interest in healthy nutrition will lead to a reduction in the number of potatoes in the diet of the average Russian. And perhaps vice versa: more frequent economic disasters will lead to an increase in the popularity of the beloved Russian product.
In any case, it is too early to translate future prospects into exact figures.