Investment portal of Smolensk Region

agriculture

The agribusiness of the Smolensk Region, with farming being its leading industry, is the key sphere of the regional economy constituting the agricultural food market, food and economic security, labour and settlement potential of the rural areas.

IThe agricultural complex comprises 7% of the gross regional product. The agricultural lands occupy 1,7 mln ha including 1,2 mln ha of plough lands. The majority of rural districts are agricultural, 20 thousand employees work in agribusiness or on farms. The agricultural production consists of 280 agricultural organisations, 200 farms and individual entrepreneurs, 178 thousand homesteading citizens.

In 2013 the agricultural business supplied products for 20,5 billion rubles, the growth of the agricultural production amounted to 1,6% compared with the same period of the previous year. The ratio of the agricultural organisations in the gross output reached 46%.

The livestock breeding is a key branch of the regional agriculture; it has 83% in the product structure of the regional agricultural production, including 39% of dairy breeding. Plant farming consists of corn, pulse and forage crops production. The Smolensk Region has also suitable natural and climatic conditions for the growth of fiber flax, rape, potatoes and vegetables.

Sowing of agricultural plants in all categories of agricultural businesses has reached 450 thousand ha for the past two years. The ratio of agricultural organisations and farmers (together with private entrepreneurs) is 95% of the total amount of sowing.

In 2013 the Smolensk Region produced livestock and birds for slaughter with the live weight of 59 thousand tons, 298 thousand tons of milk, 313 mln eggs, 188 thousand tons of corn, 233 thousand tons of potatoes, 77 thousand tons of vegetables, 9 thousand tons of rape, about 3 thousand tons of fiber flax.

In 2013 1,71 billion rubles were spent on the development of the regional agriculture, including 0,943 billion rubles from the federal budget and 0,767 billion rubles from the regional budget. In addition, the implementation of the program measures helped to attract over 1,9 billion rubles of extra-budgetary funds (proprietary funds and borrowings of agricultural commodity producers).

The agricultural production in the Smolensk Region is being modernised and reequipped both technically and technologically. The following agribusiness investment projects are being implemented in the Smolensk Region:

- CJSC “Zolotaya Niva”, Safonovsky District finished the construction of the dairy complex for 1200 of Holstein-Friesian cows which resulted in the increase of the total number of milk cows in the Safonovsky District, it rose upto 1800 milk cows. At present the producer is preparing for the implementation of another investment project on the construction of a dairy complex for 4150 cows, mixed cattle feed facilities and an elevator in the Dorogobuzhsky District;

- Llc “Grainlux”, Roslavsky District in 2013 completed the first stage of the implementation of the investment project on processing of oil plants (rape, sunflowers, soya, etc.) with the capacity of 60 thousand tons per year. At present the capacity of the technological line reaches upto 250 tons of oil seed per diem. In 2014 the production facilities are still being expanded and equipped;

- Agribusiness “Nasha Zhitnitsa”, the Gagarinsky District launched a new investment project on the land development of 8 thousand ha of fallow lands, construction of a modern complex for processing and storage of corn, construction of a milk complex for 1200 cows;

- Llc “Krol and K”, the Gagarinsky District finished the implementation of the investment project on the rabbit farm management for 3249 doe rabbits;

- Llc “Smolenskoe pole”, the Pochinkovsky District continues the construction of the pig breeding farm for 165 thousand pigs. At present the pig stock comprises 101,1 thousand pigs;

- Llc “Gagarin-Ostankino”, Gagarin launched the investment project “The construction of a meet processing facility”, with the processing capacity of 500 thousand pigs per year, 150 tons of pork per shift.

The development of the agricultural food market in the Smolensk Region is based on the principles of cooperation and integration of its participants. In accordance with the terms and conditions of the World Trade Organisation (WTO) cooperated and integrated enterprises can be granted state support. In addition to this, regional programs and investment projects are evaluated on the merit of the cooperation degree of all forms of the economic activity (from growing to processing and marketing of the agricultural products).

Several important steps were taken to comply with the WTO conditions. Progressive technologies of management became an important part of the technical and technological re-equipment of the industry, the agricultural development is based on the use of innovations, which helps producers to enter the international markets with the competitive products.

The pedigree livestock farming has reached a new level of work which implies the application of innovative technologies. The new regional information and selection centre was created upon the initiative and support of the Administration of the Smolensk Region in order to preserve the gene bank of the livestock breeds. In 2013 the centre helped all the breeding farms to introduce modern programs of computerized inventory which allowed them to start the electronic marking, according to the prognosis 50% of the livestock will have been marked by the end of 2014, and in 2015 all the producers will be using the electronic marking.

The first exhibition for the past 30 years was held in 2013 in order to popularize the achievements of livestock breeding in the Smolensk Region. There was also created the Association of Brown Swiss producers which united 7 breeding farms of the Smolensk Region with the livestock of 10 thousand cows and 16 thousand cows in commercial herds.

The re-equipment of meat and milk processing facilities will provide a considerable increase in quality of products making them more competitive. The following equipment was purchased by the agricultural producers in 2013:

1) 5 modules for cattle slaughter with the capacity of 180 cows per shift;

2) 2 modules for pig slaughter with the capacity of 200 pigs per shift;

3) 2 modules of small cattle slaughter with the capacity of 500 animals per shift;

4) 2 lines for birds slaughter with the capacity of 3200 birds per hour;

5) the lines for production of meat cans and dumplings.

The developing infrastructure of the agricultural market minimises the expenses of products delivery from the producer to the consumer and increases the accessibility of products: 10 milk machines were installed with the support of the Administration of the Smolensk Region in Smolensk to make the regional milk more accessible to consumers.

The agricultural producers participated in a new form of cooperation in plant growing. Llc “Smolensk Seeds Company” was set up to provide the regional farmers with high quality seeds of perennial grass for feeding. Llc “Izvekovo”, the Novoduginsky District completed the construction of a modern seeds producing facility for cleaning and sowing preparation of perennial grass seeds. Over 100 tons of grass mixture seeds were sold under the “Lugovod” brand, which fully satisfied the regional market demand. The price of the regional seeds is 30% lower than that of the foreign ones. The seeds sales are going to be doubled within the next 3 years, which will allow the producers to enter the interregional market with competitive products.

The social and staff development in the rural areas have become one of the top priorities for the regional development policy. 16 thousand square m of residential space were constructed and purchased for local residents, including young families and young professionals during the last three years. The construction also included 390 km of distributing gas pipelines and 113 km of local water pipelines.

Young professionals employed in the agricultural production receive monthly additional payments to their salaries; the state one-time payment for new employers in agricultural organisations is equal to 70 thousand rubles.

The state support for the agricultural complex is provided within the State program for development of agriculture and regulation of agricultural product markets, raw materials and food for 2013-2020. In order to comply with the State program provisions the Administration of the Smolensk Region adopted the Regional state program for development of agriculture and regulation of agricultural product markets, raw materials and food for 2013-2020 by the Bylaw № 928 issued on 20.11.2013.

The measures of the regional state program are aimed at the increase of the production and sales of agricultural products, produced in the Smolensk Region, it is also focused on the increase of its competitiveness on the agricultural market and providing sustainable and complex development of rural areas in the region, reproduction and effective resource management in the agricultural sector of the regional economy.

In 2014 the state support of the regional agricultural complex is carried out within 5 departmental target programs and 3 subprograms of the regional state program. The departmental target programs concentrate on the support of the development of flax production, seeds production of perennial grass, elk breeding, milk and meat processing industry as well as the prevention of infecting and spreading of African swine fever. The subprograms help to create the common conditions for work and development of agriculture in the Smolensk Region, provide sustainable development of rural areas and support for small business.

1.4 billion rubles will be spent on the implementation of the program in 2014, including 0,8 billion rubles from the federal budget, 0,6 billion rubles from the regional budget. The state support of agricultural producers mainly implies granting subsidies for partial reimbursement of actual expenditures, including: булки.jpg

- allocation of untied funds for plant growing (per ha);

- 1 litre (kilo) of commercial milk, on condition it is ranked not lower than the first sort during its sale;

- support of seeds growing and livestock breeding;

- partial reimbursement of interest payment on investment and short-term loans (from the federal and regional budgets at the rate of 100-103% of the refinancing rate of Central Bank, RF);

- support for small businesses in rural areas implying partial reimbursement of interest payments on loans in the amount of the refinancing rate of Central Bank, RF, during the process of the land registration they use from agricultural lands, partial reimbursement of expenses on shifting to alternative to pig breeding spheres (cattle, sheep, goats breeding);

- increase of agricultural production owing to the enhancement of material and technical facilities within the framework of the regional departmental target programs.

The social development in rural areas receives subsidies for:

- construction (purchasing) of housing for citizens ( 70% of the estimated cost comes from the federal and regional budgets; for young specialists and young families (95% of the estimated cost comes from the federal and regional budgets);

- construction (reconstruction) of gas and water supply (95% of the quotation comes from the federal and regional budgets).

In order to attract qualified specialists the regional budget provides lump sum grants (70 thousand rubles) for young specialists working in agricultural companies or on farms, young specialists also receive monthly payments equal to 3 thousand rubles.

The further information on the measures of state support for the agribusiness in the Smolensk Region, the process of granting subsidies for special programs is available at the website of the Department of Agriculture and Food, the Smolensk Region www.selhoz.admin-smolensk.ru.

The development priorities of the agricultural economic policy of the Smolensk Region include stimulation of production increase and sales of agricultural products, competitiveness of the products on the agricultural market, financial stability of agricultural producers and complex development of the rural areas.