Alexey Krasilnikov, executive director of the Potato Union
Gross harvest, yield and marketability
According to the Ministry of Agriculture of the Russian Federation, by November 13, 2020, potatoes in agricultural enterprises and peasant (farm) farms were harvested from an area of 268,2 thousand hectares or 95,5% of the sown area, 6,6 million tons were dug up with a yield of 244 c / ha. The final results of harvesting in the country have not yet been summed up, but I can assume that the harvest is unlikely to exceed 7 million tons, against 7,6 million tons last year.
This is a natural result, given that the planting area this season was reduced by 20 thousand hectares, and the yield indicators in most of the regions decreased due to difficult weather conditions during the growing season.
At the same time, it is rather difficult to talk about which specific territories were particularly affected and from which particular cataclysms, since at different points of the same region (for example, the Krasnoyarsk Territory or the Moscow Region), fundamentally multidirectional weather conditions could be observed throughout the season.
Recall that in the Urals and Western Siberia this summer there was a severe drought, a number of regions announced the introduction of an emergency regime in some areas, but after summing up the harvesting results, they assessed the ending season as good: the obvious shortage in some farms in the region was compensated by the success of others.
The quality of the obtained crop, taking into account the listed problems of the growing season, can be generally considered satisfactory. I think that harvested potatoes will generally survive the storage period normally.
Although at the beginning of autumn, factors were noted that aroused concerns among agrarians: for example, a number of producers in Central Russia and the Volga region recorded that this season, mid-season and late varieties of potatoes could not form a peel for a long time, which is why they had to move the harvest time.
Separately, it is worth touching on the marketability of the potato crop in 2020. Despite the fact that agricultural enterprises of the country this year struggled with the consequences of different weather events, the result of labor turned out to be similar, at least in one thing: potatoes grew smaller than usual (a significant proportion of the crop - tubers less than 55 mm in diameter). Because of this, agricultural enterprises supplying products to retail chains under contracts faced threats of canceling contracts and paying fines, and chains with a shortage of potatoes, since there was simply no product with the usual parameters on the market. The Potato Union managed to mitigate the situation and, during negotiations, reached an agreement with retail chains to revise the selection criteria for products: the requirements for the sizing were reduced (for different regions, their own limits were established, depending on the situation "on the ground"). Recently, Sergei Belyakov, Chairman of the Presidium of the Association of Retail Companies (AKORT), noted that this story can be viewed as a clear example of the fact that chains and producers, including with the assistance of the Potato Union, are able to come to a compromise and find mutually beneficial solutions.
Upward movement
A decrease in harvest volumes, as a rule, leads to an increase in market prices. It is not surprising that in the current season, potatoes are confidently adding in value with each new week. At the moment, in all regions of the country, prices for table potatoes are on average 50-60% higher than last year.
Regions | average price | Annual growth,% |
---|---|---|
Belgorod | 15 | 66.67 |
Bryansk | 16 | 100 |
Volgogradskaya | 15 | 50 |
Voronezhskaya | 16 | 77.78 |
Krasnodar | 15 | 50 |
Leningrad | 16 | 60 |
Moscow | 16 | 60 |
Novosibirsk | 15 | 50 |
The Republic of Tatarstan | 15 | 50 |
Rostov | 15 | 50 |
Samara | 15 | 66.67 |
Saratov | 15 | 50 |
Stavropol region | 15 | 66.67 |
Tula | 15 | 50 |
Tyumen | 16 | 77.78 |
The rise in prices confirms that there is a certain shortage of products on the market (both marketable potatoes and varieties for processing). Although, there is certainly nothing critical in this, and consumer costs with an average annual consumption of 60-80 kg will increase by no more than 300-500 rubles per season.
It is difficult to predict how events will develop in the future. I believe that there are no prerequisites for sharp ups yet, but a gradual increase, taking into account the growth of various costs, will traditionally continue until June-July next year.
Import with a focus on seeds
The end of the calendar year is the optimal time to purchase seed for the next harvest. Especially if this material is to be delivered from abroad.
This fall, we note an increase in the activity of Russian farmers in the acquisition of source material (microplants, minitubers) - this trend is confirmed by almost all European selection and seed companies operating in our market. Interestingly, a significant part of such supplies, of various originators, is organized from Scotland laboratories, which have proven a very high level of qualifications in this segment.
And a few more words about this program. The Potato Union proposed to the Ministry of Agriculture and the Ministry of Education and Science to form an Inter-Coordination Council for the implementation of the FNTP subprogram and to entrust this organization with responsibilities for interaction between agricultural producers and science. According to the observations of the Union's experts, today it is very difficult to understand how exactly the interaction of seed companies and research / breeding centers (which are entrusted with the implementation of the program's tasks) is carried out, as well as what areas are spent on the federal and regional budgets. In particular, we have repeatedly focused the attention of government officials and science on the fact that the country lacks domestic potato varieties suitable for processing, but we have not received information on how work is being done in this direction.
Hunting for working hands
In April 2020, after migrants left Russia, the agrarian sector faced an acute labor shortage. According to the Ministry of Agriculture of the Russian Federation, the industry lacked about 23 thousand workers. Most likely, the real numbers are much higher.
Traditionally, there are requests for seed potatoes of high reproductions of European production. I note that at the end of October, negotiations were held between the chairman of the Potato Union Sergei Lupekhin and the deputy head of the Rosselkhoznadzor Yulia Shvabauskene, during which it was reported that against the background of the restrictive measures with COVID-19, the import of seed potatoes from the EU countries in the current season will be allowed without conducting pre-shipment control by inspectors of the department at the places of production. Batches of potatoes are allowed on the basis of applications from importing companies in the ARGUS-FITO system, and their phytosanitary safety must be confirmed by guarantees of the national organizations for quarantine and plant protection of the European Union - in the context of specific lots. In the current situation, the introduction of such a simplified procedure is a reasonable and necessary solution.
We expect that in the near future all market representatives will be able to make sure that the scheme is working successfully: we have a request for the supply of potatoes from Finland, this country has provided the ordered lots (small volume: about 400 tons), we are waiting for the decision of the Rosselkhoznadzor Central Office ... We believe that the import of seeds from the European Union in the current season will amount to 8-9 thousand tons.
But the topic of importing table potatoes, I think, will not be the most relevant for this season. In the context of the devaluation of the ruble, products from Egypt, Israel, Morocco will not be able to seriously compete with domestic ones. Most likely, these countries will be more oriented towards the EU markets (especially since there are very contradictory information about the volume of potato harvest in Europe).
Export prospects
Last season, Ukraine unexpectedly became one of the largest buyers of Russian table potatoes. This year, representatives of the potato growing industry of this country have repeatedly stated that they expect a good harvest and will not give way to imported products. But now we are receiving information that the prices for potatoes and vegetables of the borsch set have gone up sharply in Ukraine, and this is a signal of a not entirely favorable situation for the domestic market.
A clear deficit of potatoes on the domestic market is also observed in Moldova.
Nevertheless, with a high degree of probability I can assume that Russia will not be able to continue deliveries of potatoes to these countries in the same volumes this season as in the previous year. Although a small stream - directly or through Belarus - will certainly remain.
Now about Belarus. According to official figures, the Republic received a good potato crop. At the same time, we know from sources in the potato industry that there is a certain shortage of seeds and raw materials in the country (in the sector of varieties for industrial processing).
Designating the directions for possible interaction in the supply of potatoes between Russia and the neighboring countries, I cannot but remind you that various quarantine checks organized by each state according to its own rules are a serious limitation on this path. Unfortunately, the phytosanitary situation in the world is becoming more and more tense from year to year, and each country is trying to protect its territory from quarantine objects. At the same time, the business suffers losses. As one of the members of the Potato Union notes, due to all kinds of delays and bureaucratic delays at the borders, his company loses about 1,5 thousand tons of potatoes per year.
A possible step towards streamlining the requirements could be the adoption of the Agreement on Cooperation in the field of plant quarantine, the draft of which was developed back in 2016. Now in our country a law on its ratification is being prepared.
It is assumed that in addition to Russia, the agreement will be signed by Azerbaijan, Armenia, Belarus, Ukraine, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. More information on the text of the document can be found on the regulation.gov.ru website.
Interaction with science
In November, the Ministry of Education and Science of Russia summed up the results of the next selection of programs for the creation and development of seed-breeding centers. At a meeting of the Interdepartmental Council, a list of 15 organizations was approved, on the basis of which selection and seed production centers in 9 priority areas will be created. By the decision of the council, the development of the Potatoes direction will be entrusted to the Federal Research Center Kazan Scientific Center of the Russian Academy of Sciences.
The important selection criteria were the existing scientific groundwork of the organization, the availability of scientific and technological infrastructure, high human potential (including the presence of young scientists in the team), experience of cooperation with enterprises in the real sector of the economy, and contribution to the implementation of the Food Security Doctrine.
From the point of view of the Potato Union, the opening of another research and production association in the country can only be welcomed. We hope that the new breeding and seed center will achieve great success and make a significant contribution to the implementation of the activities of the sectoral subprograms of the Federal Scientific and Technical Program for the Development of Agriculture for 2017-2025.
The Potato Union participated in the search for possible solutions, raised this topic at different sites, but the problem is still relevant to this day. Harvesting is complete, but many farms use manual labor in the pre-sale preparation of potatoes and vegetables.
Globally, there is a hunt for workers in the country: people are lured away from construction sites, they are trying to invite from other regions and from abroad (Uzbekistan is most willing to respond to requests). At the same time, the main means of attracting workers is to increase their wages. By the way, the increase in costs in this area is one of the reasons for the growth in the cost of potatoes and vegetables this season.
Far East
Throughout 2020, the authorities are paying increased attention to the provision of potatoes and vegetables to the regions of the Far East. At the moment, the situation there is characterized as stable.
According to the preliminary results of the season, a good harvest of potatoes was obtained in Primorye: the gross harvest is 25-30 thousand tons higher than last year's result. 30% of the collected amount is deposited. According to the authorities, this amount is more than enough to provide the entire population of the region during the winter.
Wholesale prices for potatoes in Russia, data of the Potato Union as of 06.11.2020/XNUMX/XNUMX, rubles / kg
In addition, crops are supplied to the Far East from the Ural and Siberian federal districts (suppliers are compensated for the cost of rail transportation). Although representatives of the host side propose to transfer subsidies to more relevant for local territories, road transportation of agricultural products.
Waiting for the new season
The 2020/21 season for potato and vegetable borsch growers is still developing more successfully than many previous ones. Of course, the yield level of 2010 is unlikely to be achieved, but the current price level is still inspiring. Usually, this always leads to an increase in the number of people wishing to engage in potato growing, so in 2021 we can expect an increase in the area for this crop, which is already confirmed by the high demand for high-quality seed material.
Note that this tendency will exactly correspond to the wishes of the Ministry of Agriculture of Russia: at one of the November meetings, the department recommended that crop producers increase production in all areas by 5%.
It is quite possible that in the new season the area allotted for the cultivation of domestic varieties of potatoes will noticeably grow, since 70% of the costs for the purchase of promising seed material of domestic selection will be compensated from the federal budget. I'm not sure that large manufacturers specializing in supplying products to retail chains will be ready to quickly reorient themselves, but for small farms this is interesting news.
And we hope the processing sector will continue to develop. Despite all the problems caused by the introduction of quarantine measures, the closure of restaurants, etc., this direction remains one of the most important for the market. We see that in recent years, many agricultural producers have appreciated the benefits of interaction with processing enterprises and are ready for further mutually beneficial cooperation.
Globally, the prospects for processing are easier to judge by related industries. Take, for example, grain or sunflower production. The state today directly tells producers working in these areas that it will not encourage the export of raw materials (grain, seeds) abroad, priority will be given to the export of deeply processed products. Of course, this has nothing to do with the potato industry yet: the volume of potato exports is not very large and does not have a significant impact on the domestic market. But the trend is worth paying attention to.