Russia thinks of pig farming in Arctic and Far East

In January, Russia’s ministry of agriculture published a draft decree proposing the reimbursement of capital costs for construction of pig farms in the country with a special focus on lowly-populated regions, where pig industry has been developed poorly until now.

Aid should be allocated to farms designed for a minimum of 2,400 sows and an annual production of 50,000 heads of pigs, while the designed capacity required should be reached within a year after the facility’s commissioning at the latest.

Pig production above the Arctic Circle

The ministry said it will give special support to the pig farms in the country’s extreme north. This part of Russia, north of Arctic Circle, has historically not been producing pork at all, as a result of a lack of population as well as harsh climate conditions. In this region the ministry will support farms designed for only 100 sows with the production performance of 3,000 head of pigs per annum.

In addition, to apply for state aid, investors will have 2 years to bring the farm to the full designed capacity, the decree stipulated.

New rules for pig production in the Far East

Since 1 January 2017, Russia has also introduced new rules of support for pig farms, granting special support for the farms in the Far East. Prior to 2017, Russia’s pig farmers were receiving state aid only in the form of subsidies of interest rates on loans, but starting this year they will be granted with the choice, either to get money based on the old scheme, or choose direct payments from the federal budget.

Basically, pig farms in most parts of the country should be able to get a reimbursement of 20% of the capital costs for construction, reconstruction and modernisation of production facilities, but for the farms in the Far East this figure is even 35%, the new legislation stated.

Encouraging pork exports to China

In the explanatory note on the decree, the ministry said that the main target of new subsidies is to encourage domestic pig farmers to develop pork exports, primarily to China. The ministry, however, has not specified any further details on how new subsidies will help the country’s farmers with export of pork.

On 21 February, speaking at a press conference in Moscow, Viktor Linnik, the president of Russia’s largest pork producer Miratorg, said that after potential opening of Chinese market for Russian pork, the company could upgrade its exports nearly 5 times from the current $80-100 million per year to $500 million per year.

He said that exports, including those to China, still suffer from the ongoing spread of African Swine Fever (ASF) in Russia. Linnik stressed that the disease has never been reported at any of Miratorg’s farms, but the company still has to face losses as a result of the disease. He pointed to ‘tens of billions’, because of a lack of export markets for Russian pork.