At a meeting with the Presidential Council for priority national projects and demographic policy in Tambov, First Deputy Prime Minister Viktor Zubkov suggested a variety of additional measures to support beef production, including the revival of an old support system for farmers.
He said: “In Soviet Union times there were special [public] farms where young animals were taken from farmers to be fattened to adulthood. Now it is primarily the young animals that go for slaughter. Currently there are no such farms, but there are citizens who are willing to do this job. This could be a good motivation for action for the Ministry of Agriculture.”
If such public farms are created they will have a special tax regime and large state support (based on the Soviet Union example), helping independent farmers significantly reduce production costs.
Zubkov also recommended the creation of a fund specifically for beef within the country’s agricultural development programme. "After this meeting we have to include a separate specialised sub-program for beef meat in the 2013-2020 state program for agricultural development,” he said at a conference on animal husbandry issues in Russia.
“We should give it virtually everything we can, so that we can fully provide ourselves with cattle meat within the next seven years,” he added.
The First Deputy Prime Minister also said that even with the proper level of support from the state it would be difficult to achieve this goal, as it would require the construction of at least 10 large beef production facilities, each with a capacity of 130,000 tonnes (t) per year.
According to preliminary estimates the volume of funding under the new sub-programme will be about RUB30bn (US$1bn). Meanwhile, Zubkov also noted that the allocation of these funds would have to be controlled, as the RUB12bn (US$410m) of budget funds spent for similar purposes in the past three years have not yielded any result.
According to official data the production of beef in Russia in 2005 amounted to 1.9 million tonnes (mt). Since 2006 the production has been consistently decreasing at an average annual rate of 2 to 16%, reaching 1.65 mt in 2010. In 2011, production declined to 1.6 mt, and in 2012 it is projected to further drop to 1.5 mt.
Beef prices on the national market have been steadily going up throughout this period and by the end of 2011 the average price of 1 kg of boneless beef products exceeded RUB335 (US$11.3), which is 25% higher than at the end of 2010 and almost by twice as high as in 2005. High prices have resulted in significantly reduced beef consumption, which went from 2.15 kg per capita in 2007 to 1.47 kg per capita in 2011.
In 2011 Russia imported a total of 607,000 t of beef. Despite the decline in production, the volume of imports also fell by 4% compared to 2010 levels.