According to EastFruit analysts, the effectiveness of multibillion-dollar subsidies for Russia’s production of vegetables and fruits, while restricting access to its market for suppliers from leading producing countries, remains extremely low. Imports of fruits and vegetables to Russia continue to grow, even despite the devaluation of the Russian currency and the ongoing stagnation of real incomes of the country’s population.

Russia once again increased the imports of fruits and vegetables in 2021. The imports grown by 3.4%, and the volume of imports reached $7.6 billion. The average annual growth rate of imports to Russia over the past 5 years, when the real incomes of the population continued to decline by 5.6% per year. Russian importers increased their purchases of vegetables, fruits, berries and nuts by $415 million annually, which makes the country one of the global leaders in terms of increasing imports of fruits and vegetables.

This confirms the extremely low effectiveness of the Russian government’s efforts to subsidize its own production in order to achieve independence in providing the population with local vegetables and fruits. Obviously, the restriction of market competition stimulates the establishment of enterprises with a low competitiveness level that lose to importers even in such unfavorable conditions for them.

The record high prices for almost all types of traditional vegetables on the Russian market this season is another confirmation. Wholesale prices for the same vegetables and fruits, cabbage, potatoes, onions, apples, beets, carrots, etc. In the neighboring countries of the European Union and in Ukraine are significantly, and often even several times lower.

Besides the fact that Russian consumers pay the highest price for fruits and vegetables in the region, the price does not reflect the tens of billions of dollars that the state took from taxes to subsidize local production. Therefore, the real price that the consumer in Russia pays for these vegetables and fruits is much higher than the already record high nominal price.

We recently detailed the reasons why autarky is absolutely ineffective in modern times. Apple imports to Russia have grown by 8% over the past 5 years – even more than the imports of exotic bananas, which are not grown in the country. This is despite the fact that Russian growers received generous state subsidies, the ruble devalued, and the EU countries, China and the USA, the global leaders in apple exports, could not supply apples to the Russian market at all.

It should also be noted that potato imports to Russia doubled in 2021 over the last 5 years. Imports of watermelons increased 5 times during the same period, although Russia used to be a large exporter of watermelon. Imports of cherries increased by 63%, imports of strawberries and pumpkins also doubled.

There are a lot of reports in the media on the huge progress in greenhouse technologies and the constant growth in greenhouse vegetable production in Russia. This is hard to deny. However, given the enormous budget spent on supporting this industry, a decrease in tomato imports by only 1% in volume 5 years and an increase in imports by 6% in value terms can hardly be considered an achievement. Things are much better with cucumbers, but as a rule, they are a local product that is not exported or imported in large volumes like greenhouse tomatoes. As for peppers, the third most important type of greenhouse vegetables, their imports have grown by 54% over the past 5 years.

In addition to traditional vegetables and fruits, which Russia continues to import in growing volumes, Russian consumers are increasingly interested in exotics that are not grown in the country and fruits and vegetables, the production of which is limited in Russia due to climate. As we already wrote, imports of avocados to Russia have grown 4 times over the past 5 years. Imports of table grapes, fresh and frozen berries doubled over the same period. Imports of persimmons increased by 71%, cherries – by 63%, pineapples – by 69%, mangoes – more than 7 times, melons – more than 3 times, etc.

Who are the main beneficiaries of such a policy of Russia in the fruit and vegetable sector? First of all, it is Turkey supplying more than 17% of all fruit and vegetables to the Russian market. Fruit and vegetable exporters from Iran are also increasing their exports. According to various estimates, Iran already accounts for about 15% of all Russian imports of fruits and vegetables. Other beneficiaries are Egypt, China, Uzbekistan, South Africa, Belarus, Moldova and Israel. Georgia is also rapidly increasing its revenue from the supply of vegetables and fruits to the Russian Federation.

Сообщение Despite multibillion-dollar subsidies and embargoes, imports of fruits and vegetables to Russia keep growing появились сначала на EastFruit.

The government of the Republic of Uzbekistan has decided to support new promising projects for the production of food products, according to which up to 50% of the costs on the development, provision of infrastructure and the involvement of foreign experts will be reimbursed by the state, EastFruit experts report.

On January 20, 2022, the Cabinet of Ministers of Uzbekistan adopted a resolution “On measures to further support food producers.”

Read also: Uzbekistan 2021: fruits, nuts, grapes – the analysis of prices, production and exports

Since there are no reservations in the document on the application of its provisions to projects on specific types or categories of food production, it equally applies to projects for the processing of fruits and vegetables.

Under the Decree, state subsidies are allocated to cover 50% of the costs:

• related to the preparation of a feasibility study for new promising projects on food production in an amount not exceeding 100 million UZS ($9 300) for each project;
• to provide infrastructure for new promising projects on food production in an amount not exceeding 100 million UZS ($9 300) for each project;
• to attract foreign experts in the field of production and deep processing of food products in an amount not exceeding 50 million UZS ($4 600) for each project.

20 billion UZS ($1.85 million) will be allocated for these purposes. The Regulations on the procedure for considering applications for subsidies, the allocation of the subsidies (reimbursement of part of the costs), as well as the refusal to issue subsidies and the right of applicants to re-apply or appeal to a higher authority or court were also approved.

Subsidies to cover the costs of preparing a feasibility study, creating infrastructure, and attracting foreign specialists are allocated after the commissioning of capacities and the execution of relevant acts.

The government document came into force on January 21, 2022.

Сообщение Uzbekistan will start subsidizing promising projects in food production появились сначала на EastFruit.

Governors of the Ministry of Agriculture and Food Industry of Moldova (MAIA) argue that at the government level, work on amendments to the distribution regulations of the National Fund for the Development of Agriculture and Rural Affairs is underway. They will increase subsidies irrigation  infrastructure. In particular, compensation will be provided for shares of investments in deepening ponds, and in tanks for rain/melt water, etc.

The associations of producers of fruits, grapes, vegetables and berries believe that the development and application of a regulatory framework providing farmers with wide access to underground water sources for irrigation purposes would give the greatest impetus to the development of irrigation in fruit growing. However, this is unlikely to be solved in the short term, namely, in the agricultural season-2022.

MAIA experts believe that, as a matter of priority, irrigation systems using water from the most accessible sources – primarily from the Dniester and Prut rivers, as well as small natural reservoirs (where the water quality meets the irrigation standards), should be developed.

In addition, there are many hundreds of artesian wells in the agricultural enterprises of Moldova, created during the Soviet period, but currently closed. They could be used in regions, where there are no alternative sources of water for irrigation at all. However, these water sources can hardly be called cheap, given the need for expensive energy resources used to raise water and pump it onto farmland.

Сообщение Moldovan authorities plan to increase subsidies for irrigation infrastructure появились сначала на EastFruit.

According to the Agency for Interventions and Payments in Agriculture (AIPA), about 97 hectares of new strawberry plantations were planted in Moldova last year – almost twice as much as in the previous year of 47 hectares. However, these figures do not fully reflect the actual state of affairs. Unlike farmers, not all berry growers apply to the department for post-investment subsidies upon the establishment of new plantations since the bulk of the berries is grown on less than 1 hectare (owner-farmers often do not have the time, knowledge, or trust in government institutions to draw up the relevant documents). Nevertheless, the AIPA data are sufficient to draw the conclusion that in 2020, the process of increasing the production capacity in the strawberry segment of the berry business in Moldova continued.

Read also: Heavy snowfall in Moldova potential factor in price growth for vegetables

Members of the Moldovan Berry Producers Association clarify that the expansion of ​​new strawberry plantations last year was planned at the end of 2019 and the beginning of 2020 before the pandemic hit. It was assumed that dessert berries would be sold at a decent price if not for export then on the domestic market or, at the very least, any fresh market surplus would go for processing. Hence, it was believed that any loss of goods and income in cases of unfavourable events would be minimal. This is partly what happened, but then the pandemic-related suspension of open-air horticulture markets and the forced priority of retail chains influenced, presumably, the outlook for berry farmers and vegetable growers.

The breakdown of export-oriented commercial chains in late spring-early summer of last year also significantly changed the marketing format for Moldovan strawberries. Large berry clusters in the north of Moldova sharply reduced external supplies of products, but more were sold on the domestic market and at a rather high price in part to the drought. The forced temporary reduction due to pandemic restrictions of contraband supplies of berries to the Moldovan market also had an impact.

How will the situation develop in the berry business of Moldova in 2021?

According to representatives from the berry association, there are still many unknowns. Risks are multiplying such as the purchasing power and demand for expensive (albeit “healthy”) fruit products are decreasing, decapitalization of local agriculture continues, and logistical difficulties from the waves of restrictions due to COVID-19 have not been overcome. The HoReCa sector is still in deep crisis.

Even in the realities of a two-year production cycle in the strawberry segment of the berry business, it will be difficult for farmers to completely curtail the investment process. However, to all appearances, optimization (towards reduction) will happen without fail.

Сообщение Expansion of strawberry plantations in Moldova began before COVID-19. What will happen in 2021? появились сначала на EastFruit.

Tons of potatoes were left unharvested in the fields of Bulgaria. Potatoes turned out to be too expensive for the EU because of the small compensation to Bulgarian farmers, according to the Association of Potato Producers in Bulgaria as reported by AgroTimes with reference to Bourgas.

Bulgarian potatoes turned out to be several times more expensive than those grown in other European Union countries, where producers receive serious subsidies.

Read also: UHA: Statement about uselessness of state support for Ukrainian potato industry unconfirmed by real calculations

Potato growers demanded a meeting with Prime Minister Boyko Borisov and Minister of Agriculture Desislava Taneva.

Note: Due to the COVID-19 pandemic, subsidies provided by the governments of Greece, the Netherlands, Poland, Germany and other countries are many times higher than the subsidies in Bulgaria. In Greece, the subsidy is 2500 euros/hectare, but in Bulgaria – 409 euros/hectare.

Сообщение Bulgarian potatoes too expensive for the EU market появились сначала на EastFruit.