Russian agriculture thrives after introducing ban on imports of Western production

Russian agriculture thrives after the country has introduced ban on imports of Western production. If Western sanctions aimed to crush the business in Russia, that was not felt by local sea farms. In the cold waters of the Barents Sea, the largest Russian salmon farmer has increased production more than six times, and this is part of the rise of the Russian agro-industry after restrictions of foreign imports.
In Russia, the farms, fields, greenhouses and fertilizer factories are growing rapidly after consumers turned to local production, given the worst relations between Moscow and the West in last 30 years.
After the EU and the US imposed sanctions on Russian companies following the annexation of the Crimea in 2014, Moscow responded with an embargo on Western food imports. The government banned about 60% of total meat and fish imports in the country, 50% of dairy products, vegetables and fruits, creating a huge opportunities for local producers. Total food imports from the EU fell by 40% between 2013 and 2016.
"Russian agriculture is on the rise and we clearly see great interest from foreign investors", said the general director of the leading Russian fertilizer company FosAgro, Andrey Gurev.
Russian Aquaculture has increased fish production by 664% in the first half of 2017 compared to last year and has recently opened new farms with capacity 1,500 tons, part of plans to double production next year. The goal is an increase in production from 25,000 to 30,000 tonnes by 2025 and a market share of 25% on the market currently dominated by importers.
The sales of the largest farmer Rusagro rose by 16% in 2016 compared to the previous year, including a 49% increase in sales of cereals such as wheat and maize.
The produced wheat in the Sistema conglomerate grew by 80% last year.
Russian agriculture and food companies have made investment of 5 billion USD in 2016, and in the last few years local producers got a chance to gain market share, including in the fruit, vegetables, cheese, milk and some categories of meat.
The market capitalization of the Russian Aquaculture sector has risen fourfold, and Rusagro, Fossagro and Cherkizovo have doubled since 2014. Steppe negotiates with investment banks for an IPO planned for 2019. The company bought 130,000 hectares of land this year to expand production to a total of 500,000 hectares and invests in new greenhouse for cucumbers and tomatoes.
Renova, a billion-dollar Russian investment group, has invested 390 million EUR in greenhouses, which is the first step of the company in agriculture.
The forecasts are that 130 million tonnes of cereals will be produced in Russia this year, which will surpass the USSR record in 1978 - a period of large investments in state-owned collective farms.
The country may export a record 40 million tonnes this year, the Minister of Agriculture ‎Aleksandr Tkachyov said this week. Last year, for the first time in decades, Russia has overtaken the US for wheat exports and is expected to dethrone the EU as the world's largest exporter this year, according to the US Department of Agriculture.
New sanctions imposed by Washington in recent weeks suggest that relations will hardly improve soon, and farmers will invest long-term.
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