Situation with potato seeds in Russia is catastrophic
Aleksey Mayorov, head of the Federation Council Committee on Agrarian Food Policy and Environmental Management, said that the indicators of self-sufficiency of the Russian agricultural market with potato and sugar beet seeds are close to catastrophic. This issue can be resolved only with the participation of business and science.
For only seven major agricultural crops, Russia provides itself with its seeds above the minimum threshold of 75%, which is indicated in the Food Security Doctrine. This follows from the presentation of the head of the Ministry of Education and Science Valery Falkov at a meeting of the Federation Council Committee on Agrarian Food Policy and Environmental Management. These are winter wheat (94%), spring wheat (91%), leguminous and fodder crops (86%), rice (84%), oats (81%) and barley (78%). At the same time, according to market participants, there is no more than 5% of locally produced sugar beet seeds from what is needed.
According to Mayorov, the situation with potato and sugar beet seeds is close to catastrophic. This issue was discussed at an expanded meeting of the committee on the results of the implementation of the Federal Scientific and Technical Program (FSTP) for the development of agriculture for 2017–2025.
Aleksey Mayorov noted that the seeds created by representatives of the scientific community "are not always in demand by business." Mr. Mayorov also stressed that there must be "some kind of state assignment" that would ensure the use of seeds created by scientists in sowing domestic crops. The Chairman of the Federation Council Valentina Matvienko had already drawn attention to the low rates of import substitution of potato and sugar beet seeds during the consideration of the law on seed production.
Import of potato seeds in 2021 increased by 80.4%
According to Mayorov, the share of seeds of domestic selection in the volume sown for potatoes decreased in 2021 compared to 2020 from 8.8 to 8.7 percent. At the same time, this indicator is not available in the subprogram for potatoes, although it is available in the subprograms for sugar beet and oilseeds.
In addition, the indicator of the share of seeds of foreign selection in the volume sown for potatoes is constantly growing - from 54 percent in 2017 to 65.2 percent in 2021. It should also be noted that the import of potato seeds in 2021 increased by 80.4 percent compared to 2020.
The head of the Federation Council committee on science, education and culture, Lilia Gumerova, noted that investments in domestic seed production and measures that stimulate the commercial interest of businesses in the purchase of domestic seeds can solve the problem with a low level of seed import substitution.
How much seeds Russia lacks
According to Valery Falkov, for such a problematic crop as potatoes, 30 thousand tons of elite potato seeds allows the country to solve the problem of food security so that not to depend on imported seeds. By 2030, according to him, within the framework of the Federal Scientific and Technical Program for the Development of Agriculture, it is planned to achieve self-sufficiency in seeds of domestic selection at a level of at least 75 percent.
As part of the subprogram for the development of potato breeding and seed production, approved in May 2018, 29 new domestic competitive potato varieties have been registered since 2018. In 2018 the farmers had about 1,000 tons of domestic elite seeds at their disposal. In 2021, domestic breeders produced more than 19 thousand tons of potato seeds. Every year, seed production in Russia doubles.
Farmers warned about shortage of tubers in 2022
An increase in potato processing capacity in Russia by 50%, a reduction in tuber production in private farms and a drop in yields due to drought threaten a shortage of local tubers for consumers in 2022. Market participants warned the Ministry of Agriculture about this in December 2021. In their opinion, without subsidizing production, only imports can replace the shortage of tubers. The Ministry of Agriculture believes that the prerequisites for increasing the harvest of potatoes have already been created.
Sergey Lupekhin, chairman of the Union of Potato and Vegetable Market Participants, warned about the risk of a shortage of Russian table potatoes at a meeting at the Ministry of Agriculture on December 3. The main reasons are a reduction in production in personal subsidiary farms and an increase in processing capacity. According to Mr. Lupekhin, if this year about 1 million tons of potatoes were processed in the Russian Federation, then next year it can be up to 1.5 million tons, and by 2026 - up to 3 million tons.
An increase in demand from processors and an increase in the cost of potato production will also not lead to the expected price reduction, participants in the meeting at the Ministry of Agriculture noted. According to Rosstat, in October 2021 potatoes cost an average of 44.51 rubles per 1 kg which is 78.6% more than a year earlier. The shortage is also linked to low yields due to drought in 2021.
The industrial director of Mareven (produces Rollton mashed potatoes) Alexei Anashko says that in 2022, according to the forecasts of the company's suppliers, there may be a shortage of potato flakes on the market, and the cost of raw materials may increase by 50%. The company also expects an increase in prices for imported raw materials. PepsiCo, which plans to launch a plant for the production of Lay`s chips in Novosibirsk in 2022, declined to comment. The company has already notified counterparties of possible interruptions in Lay's deliveries this fall due to a shortage of potatoes.
Ministry of Agriculture & prerequisites for growth of potato production
According to the Ministry of Agriculture, as of December 2, 6.68 million tons of potatoes were harvested in the Russian Federation against 6.64 million tons a year earlier. They predicted that by the end of the year the figure would increase to 6.71 million tons, and in 2022 - up to 7.2 million tons. To do this, the Ministry plans to increase subsidies for growing potatoes and offset the costs of production and upgrade storage facilities. The Ministry of Agriculture is preparing a project to increase production and organize the infrastructure for the storage and sale of vegetables and potatoes. “In general, it is planned to allocate an additional 5 billion rubles for the accelerated development of the vegetable growing industry in 2022. It also provides for an increase in funding for subsequent years. This will increase the volume of production of potatoes and vegetables in the organized sector by 15%,” the Ministry’s report says.
In 2022, it is planned to increase the potato planting area by 20 thousand hectares in the organized sector.
Shortage of Russian potatoes will have to be replaced by imports
However, as market participants note, the measures remain at the level of proposals, the shortage of Russian potatoes will have to be replaced by imports. According to the Ministry of Agriculture, in 2020, 316.3 thousand tons of potatoes were imported into the Russian Federation, and as of November 2021 - 548.9 thousand tons. The main suppliers are Egypt, Azerbaijan, Belarus, Israel.
In addition, the lack of planting material may prevent the increase in production. Director General of the Institute for Agricultural Market Studies Dmitry Rylko adds that the transition of many consumers in megacities to the consumption of early imported potatoes has also reduced the profitability of storage.
The participants of the Union of Potato Market, among the factors constraining production, also mention the policy of retail chains that are not ready to accept small-caliber tubers and do not conclude annual contracts.
LAN Team Moscow
Sources: Foodmarkets, Kommersant, Potato Union