The Russian Far East and Arctic Development Corporation (FEDC) took part in a key event for the professional livestock sector at Agroinvestor. The XIV industry business conference “Russian Meat & Feed Industry - 2022” occupies a special place in the business calendar of the Russian agro-industrial complex. This year, leading analysts, industry experts, and government officials have gathered to discuss development opportunities for the Russian agricultural sector in the face of new economic realities. During the investment session, emphasis was placed on the prospects for the meat and animal feed industry.

When talking about how to maintain and increase business efficiency in the face of macroeconomic instability, Executive Director of Rincon Management Konstantin Korneev noted that businesses need to change their style. To increase efficiency, agricultural producers need to pay more attention to the existing property complex of enterprises and the organization of the production process, biosecurity issues, as well as the purchasing power of consumers and shift the focus to basic food products. A representative of an agribusiness consulting company included dairy farming, crop production, poultry farming, and meat processing in the list of industries where the potential increase in the value of investments is most likely.

According to Managing Director of Rosselkhozbank JSC Ilya Shumov, the number of M&A (mergers & acquisitions) transactions has been increasing in recent years. Representatives of the Russian agro-industrial complex are more likely to buy or sell a business, or a portion of it, or to merge companies. Large holdings remain, while small companies who cannot compete, and foreign players leave. At the end of 2021, the amount of M&A transactions amounted to $1 billion, which is three times higher than in 2020. Investors are attracted by the growing marginality seen in the last two years, especially in crop production. The acquisition of crop production assets, in addition, helps to get rid of dependence on feed suppliers. High interest is also observed in greenhouse farms, animal husbandry, and meat processing.

General Director of the National Union of Beef Producers Roman Kostyuk considers beef cattle breeding one of the most promising areas to increase the investment attractiveness of the livestock industry, but this requires industry cooperation between enterprises and large holdings. And in order to reduce beef imports, it’s important to have a domestic infrastructure for selling livestock, namely, an information platform and a digital platform for buying and selling animals. He said that an agreement will be signed in Bishkek on May 26, according to which Uzbekistan, Kyrgyzstan, Kazakhstan, Armenia, and Russia will launch a single digital exchange for trading in farm animals.

Deputy Director General of the Russian Poultry Union Elena Stepanova spoke about the redistribution of demand for food and other risks to the country’s food security under the sanctions regime. The organization has calculated all the risks: the physical and economic availability of material resources, the financial support risks for production and the aggravation of the epidemiological situation. It is working to minimize them and maintain the potential created in the industry, focusing on the doctrine of food security of the Russian Federation. The speaker noted that the poultry industry in Russia has serious potential for development - breeding and genetic centers have been created according to international biosafety standards, poultry farms are reconstructing and modernizing first and second order incubators for breeding poultry. And the representative of Rosptitsesoyuz sees the basis for creating an alternative to imported products in the integration of markets and the expansion of trade with friendly countries nearby.

The session’s participants were introduced to the agricultural investment potential and entrepreneurial support mechanisms of the regions of the Far Eastern Federal District by Abdurazak Razakov, head of the FEDC’s sectoral expertise department. When speaking about business opportunities, he focused on the markets for agricultural products and the potential for putting agricultural land into circulation.

“A key factor for business is the availability of markets for its products. The Far East remains dependent on the delivery of agricultural products fr om the western portion of the country and imports. The implementation of new investment projects allows us not only to provide businesses with guaranteed demand on the domestic market, but also provides the population with local products. Also, don’t forget that about 80 million people live in the three border provinces of China, and Far Eastern products are in great demand there,” the representative of the FEDC noted.

The second significant factor, per the speaker, is the availability of agricultural land suitable for use. The FEDC is actively forming a land bank so that investors can implement agro-industrial complex projects and increase the volume of agricultural production.

“Based on the results of the inventory of land, we plan to put into circulation an additional 1.6 million hectares by 2030. We will also offer investors assistance in organizing land reclamation activities on formed land masses, including using the mechanism of the Far Eastern concession. For instance, in the Primorsky Region, 10 ownerless reclamation systems have been preliminarily selected for restoration and modernization. This will make it possible to put into circulation about 10,000 hectares. A digital catalog of land plots has also been created, wh ere vacant lands are indicated within the boundaries of ASEZs that have been created in each Far Eastern region (with the exception of the Magadan Region). Agricultural land will also appear on this platform in the near future. Satellite images will show all the characteristics of the sites available for selection and distribution,” Abdurazak Razakov summed up, adding that the FEDC is ready to interact with investors 24 hours a day.

The discussion of these and many other issues was held in a “live” format. The participants of the business conference, which was held with the support of leading industry unions and associations, received up-to-date information, and exchanged experience with their colleagues and partners.