Russia seeks to boost domestic aquaculture
Over the past decade Russian aquaculture has doubled its output from 105,000 tonnes in 2007 to 219,000 tonnes in 2017, much of the credit for which can be attributed to successful government policies supporting fish farming, reports Vladislav Vorotnikov.
Now both federal and regional authorities putting efforts into further boosting production, as well as towards making the industry more diversified. For the Russian government, the development of fish farming is of national importance, as amid the food embargo and the strong devaluation of the currency over recent years, the domestic market remains short of affordable fish products.
The Health Ministry estimated that average fish consumption per capita has decreased rapidly over the past four years, dropping to 12kg in 2017. While this was one of the lowest rates ever, a figure of 11kg is predicted for 2018; half of the recommended level.
The Russian wild catch in 2017 was 4.90 million tonnes, but with significant distances between the main harvesting areas in the Far East and consumption regions in European Russia, prices remain high and the domestic market for fish is also under pressure as real incomes in Russia have continued to fall since 2014. This is one of the reasons for the determination to develop aquaculture in European Russia.
Aquaculture production is already focused in this direction, with the southern, north-west and central federal districts jointly accounting for 71% of overall production in 2016, while the eastern regions produced only 10,000 tonnes, according to figures from the Federal Agency for Fisheries.
Overall production is expected to grow by at least 315,000 tonnes in 2020, according to the Agency’s aquaculture development strategy, while Agricultur Minister Alexander Tkackev is more optimistic, predicting output could reach 400,000 tonnes by 2020 and the Agency predicts production levels reaching 700,000 tonnes by 2030 – with hopes that it could rise as high as a million tonnes.
In view of the social importance of domestic aquaculture, the Russian government has been making efforts to shape the legislative framework for the industry, and to improve the investment environment. In particular, late 2017 fish farmers were granted opportunities to apply for soft loans from state-owned banks at a 5% interest rate, instead of the usual 18% rate.
“Russian aquaculture industry was receiving around Rub700 million ($11 million) per year less state aid than it was due, partly because of the lack of access to soft loans,” said Herman Zverev, President of VARPE, the All-Russian Association of Fishing Enterprises, Entrepreneurs and Exporters.
Every year the Russian government every year distributes subsidies to the regions for the development of aquaculture, reimbursing up to 40% of the investment costs of new projects and up 20% of feed costs. An average of Rub1.1 billion ($18 million) has been made available from the federal budget over the past three years.
While this state support is important, the weak demand on the domestic market has not been enough to maintain sustainable growth of aquaculture, according to the Russian Union of Industrialists and Entrepreneurs, in a letter to Prime Minister Dmitry Medvedev in 2017.
“The absence of that form of support [soft loans] could make accelerated growth in the industry impossible, and lead to ‘systemic failures’ of particular fish farms, as well as the entire fish farming industry,” warned Alexander Shokhin, the President of the Union of Industrialists and Entrepreneurs.
The need for additional state support was justified by the weak demand for fish at the domestic market. As the result, producers have been unable to lift the prices. Russian newspaper Kommersant cited the example of the owner of a fish farm who estimated that in 2017 the average price for live European carp (Cyprinus carpio) was Rub150-170 ($2.5-$2.7) per kg. That farm had seen a highly unstable demand for fish in its region, as over several months in 2017 it declined by nearly 30%.
More support for linked industries
Stocking materials, feed and vaccines make up to 70% of the production costs of an average Russian fish farm, Herman Zverev estimated. Regional authorities spend from the federal budget to subsidise all of these items, which have a high price as the are still mainly imported.
“Our fish farms use only 2% local feed, while the rest comes from by foreign suppliers. This is a severe problem, which must be addressed,” commented Natalia Tarasova, the chairman of the aquaculture department of the government of Leningrad Oblast.
“There is no high-quality fish feed in Russia. There are poor-quality feeds, but their only advantage is the low price. This creates import dependence, which the foreign suppliers take advantage of, raising the price for their products at the Russian market,” commented Danil Eltekov, the director of the Soba Hatchery, one of the biggest suppliers of stocking materials in Russia.
“This is especially relevant for a starter feed, since with a 100 micron size this is very difficult to manufacture. The average price for starter feed is Rub4000 ($80) per kg,” he said.
Only a few plants in Russia manufacture feed, but there is progress in this area, since in particular in July 2018 with regional authority support the first facility on the south of European Russia recently began manufacturing feed for pond fish in Astrakhan Oblast.
According to the Astrakhan government, the capacity of the feed mill is 1000kg of feed per hour.
“This project is expected to be a great benefit to the local fish farms, since the price of the feed from the local mill will be half that of imported products,” a spokesman said, adding that all of the 120 fish farms in the region import feed.
Situation is similar with broodstock. In 2017 Russia produced 33,100 tonnes of broodstock, up 8% on the previous year, according to the Federal Agency for Fisheries. In spite of this, there remains an absolute dependence on imports for some farmed species.
“There is an import dependence in that sector, but it is not that strong,” claimed the Agency’s director Ilya Shestakov, speaking last year.
He added that the government has plans to deal with the problem by building three major hatcheries, including two in the primary fish farming clusters – one in the south and another one in the north-west districts. According to Ilya Shestakov, this is expected to produce results by mid-2020.
With almost no new projects in the field of vaccines, from 1st January 2019 the Ministry of Agriculture will start a programme of state-funded insurance against the occurrence diseases at farms. The full details of that programme are expected to be clarified in the coming months, but it is anticipated that this includes insurance against fifteen diseases.
Although there is currently no comprehensive programme for the development of fish feed or broodstocks in Russia, regional governments today are providing support.
Call for diversification
Russia’s aquaculture sector is poorly diversified, according to research presented by the Federal Council of Russia earlier this year. Carp species accounted for 65% and salmon species for 25% of all fish produced in the country in 2017, while some fish species are still hardly produced in Russia at all, despite strong demand from consumers.
In general terms, there were 4000 fish farms registered in Russia in 2017. Nearly 86% of these have a production capacity below 100 tonnes per year, while 12% manufacture from 100 tonnes to 1000 tonnes, and only 2% are capable of producing more than 1000 tonnes annually. At the same time, only 1.2% of fish in Russia is produced in accordance with the most up-to-date technologies, the Federal Council stated.
The Russian authorities see a clear need to promote greater diversification in its aquaculture sector, although no concrete steps to achieve that aim have been proposed yet.
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