Is it worth investing in Agriculture in Russia? Problems and prospects

Situation of Agriculture in Russia

Russian agriculture is a complex of interrelated industries, which mainly specialise in the production of raw materials for the food industry. Some branches of agriculture produce ready-to-use products that are not always required for further processing. For example, these are products from vegetables, horticulture and dairy farming.

Agricultural products are also in demand in a number of other sectors that are not directly or indirectly related to food production. For example, agricultural products are actively used in the pharmaceutical, textile and footwear industries. Some agricultural raw materials serve as the basis for biofuel production.

Russian agriculture is part of a larger inter-industry association, the agro-industrial complex (AIC), and is a key part of it. In addition, the agro-industrial complex is part of it:

  1. Food and processing industry;
  2. Industries that provide agricultural inputs and material resources (e.g. agricultural machinery, fertilisers and agrochemicals);
  3. Infrastructure industries – a number of industries that serve the above-mentioned agricultural sectors (logistics services, financial services, training of qualified personnel, etc.). Д.).

A set of state regulation measures for the agricultural sector can also be considered as a separate link in the agricultural sector. In recent years, it has been the state regulation of the agricultural sector that has led to stable growth in production of most types of agricultural products, food products and processing industry in Russia.

Russian agriculture, which is part of a larger inter-industry association (AIC), in turn is also divided into a number of sectors:

The key driver of Russian agricultural development in the long term is the transition from import substitution to export-oriented production. The saturation of the domestic market weakens prices and increases the competitiveness of goods on world markets. The transition to export-oriented production of goods is now also taking place for those goods which were previously the most problematic in terms of import dependency. Exports of meat and by-products from Russia reached 83.7 thousand tonnes in 2015, which is 6.3% more than in 2014. In 5 years, the volume has increased 4.5 times. These are mainly poultry meat and pork by-products, which are the most competitive types of meat produced in Russia on the world market.

As for grain, there is no food dependency problem. On the contrary, Russia is one of the key exporters. In 2015, grain exports of all types exceeded 30 million tonnes worth US$5.5 billion. Wheat, barley and corn are the largest exporters. Growing global demand, the development of logistics infrastructure and tariff increases in the Russian Federation are contributing to increased export volumes.

We advise you to read about the best Russian regions to buy agricultural land.

Before buying a land plot, you need to consult with us.