The blog - Russia and Newly Independant States

Agro / APK

Origin: Seen again Objective is / beginning on 2003

bandeau_index

General agro situation

In 2001, the number of profitable farms Exceeded the bar of 50 %. It is rather well, but this figure augments very slowly. The lack of good administrators, the lack of expression of financing and the debt of the sector, slow down considerably a quick development of APK (AGRO-PROMISHLENY-KOMPLEX) as a whole.
However, Russia must re-capitalise its agriculture by renewing its motor pool to allow the resumption of basic productions.

It was not so distant time, when wheats of Ukraine and of Russia erupted on Europe.

Russia attains again volumes of cereals, which allow him to turn to export, as in 2002 for cereals. The Vimm Bill Dan group, recently side in the grant of New York, signs the departure of a new wave of integration of the Russian agroindustrial sector in worldwide economy.

If improvements persisted, the European markets would be directly concerned by this new competition. It is besides difficult to assess its largeness, an affair in
to follow efforts of Russia to protect its markets would be possible lead to an important increase of customs duties to the importation, penalising strongly firms concentrated on the importation.

In this context the Western firms with a strategy of long term (adaptation and followed by products and services, local production), will be among the most solid and the least threatening.

In the meantime agricultural debt slows down a generalised resumption. The purchase of equipments requires to find financings, while a lot of farms (50 %) have
still their blocked bank accounts. Credits with means and a long term are far from being accessible to the small farmers.

The debt of the sector, was 230 thousand million roubles in 2001, while it was only 88 thousand millions in 1998. In spite of an incontestable sensitive improvement of some courses of study
(milk, drinks, vegetables, big distribution), it is near in 2002 280 thousand million roubles. 65 % of this sum, are penalties of delay of payment. The sum of debt augments especially by a quick increase of these penalties.
A favourable agricultural policy?
Responsibility of the leaders of working

A progressive responsibility or a renewal of the leaders of farms could be initiated. To get the rare possible financings, these have no choice. They have to introduce a positive count, a plan of reduction of the debt worked out and signed in keeping with their customers in credit (covering three quarters of debt), and to have filled some obligations of social order (payment of wages, insurance). They are then "eligible to Rosselkhozbank to benefit from premiums of credit, any more attractive endevenant for the foreign investors. The only ones of the managers having a voluntary step and good methods of management can indeed aspire to it.

Appearance of private finance companies

Banks always offer not enough services of financing. Though new agricultural land law is finally adopted after more than two years of mobilisation etd' efforts, showing the real will of the Russian government to favour investments in agriculture and food processing industry. This law allows the Russians, the purchase and the sale of farmlands, opening so real possibilities of guarantee to firms and banks which can grant credits.

The appearance of the first structures offering medium-term credits, premiums of credit, services of leasing or leasing is still very young. But the government confirms its support of their creation (private firms or other one). Some people of them offer credits from 12 to 36 months allowing the acquisition of agricultural and agro-industrial equipments. Often, the importers of machines offer at the same time solutions of financing to augment the number of their clients. They see more and more commercial companies, which offer a complete package of very supplementary services: equipment, expertise on the ground, followed by installations, training, agronomical advice

The resumption of the investment entered a progressive stage in campaigns. By waiting for a more generalised recapitalisation, let us include a simple rule: to work in a country, it is necessary to be on place and to work with the aid of local "instructions". The job in network, very used by our European commercial rivals, allows them to supplement and to rank their competences, to make concrete to several a bigger number of plans.

Article written by: THOMAS BEGUIN

Origin: Seen again Objective is / beginning on 2003

Written by admin one June 19th, on 2006 with no comments.
Read more articles one CIS and Food / beverages and Polytic.

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