Friday 15 December 2017

Massive Russian market is ripe for Irish farmtech to do business in

Gerard MacCarthy
Gerard MacCarthy

Gerard MacCarthy

One of Russia's biggest agricultural trade fairs, Agrofarm, takes place on Tuesday in Moscow - and Irish businesses will be among the 340 exhibitors from nearly 30 countries displaying their offerings and pitching for contracts.

The exhibition is a major event for the world's leading livestock farmers. Around 12,000 visitors are expected, including many decision-makers from companies operating farms of gargantuan scale.

This kind of showcase is the bread and butter of generating exports which, in turn, supports employment at home. The list of Irish attendees shows the importance of this sector to regional development.

Samco are from Co Limerick; Moocall from Co Dublin and support manufacturing jobs in Co Limerick; Dairymaster are from Co Kerry; Hermitage Genetics from Co Kilkenny; Mastek from Co Cavan; Keenan from Co Laois; and Lir Agri are from Granard, Co Longford.

All are engaged in a process of innovation aimed at increasing farm output. They are pitching to a captive market at Agrofarm.

For an idea of the size of Russian farm businesses, consider this: Ireland's biggest farm is generally regarded as the 500-hectare operation run by Tom Browne and his son Simon in East Cork. By contrast, Russia's largest farm business, Prodimex, operates a land area larger than east Cork. At around 570,000 hectares, it is slightly larger than Co Mayo.

Meanwhile, across the Russian border in Heilongjiang province, China, a dairy farm with 100,000 head of cattle - more than three times the world record - is being developed.

That's a whole lot of livestock and land being managed with a view to achieving optimal returns in animal husbandry and feed production.

This need is particularly pronounced in Russia for several reasons. Much of its land cannot be used for crops or pasture due to severe cold weather that limits the season in areas where crops can be grown.

Russia has also traditionally experienced low farming output, which needs to improve significantly to replace food imports restricted as a result of Russia's 2014 counter-sanctions against products from the EU. (The output from the Heilongjiang farm in forage and milk is chiefly for the Russian market.)

The country's main strategy in response to this rejection of €12bn worth of produce is to embark on a concerted drive to increase farm efficiency.

Sergey Lisovskiy, a member of the Russian parliament's Committee for Agrarian and Food Policy and Environmental Management, describes the country's agriculture policy succinctly: "We want to cooperate with foreign companies to develop our own production."

Hence the added importance of Agrofarm this year. Russia President Vladimir Putin has allocated an additional €3.3bn to the agricultural sector in the 2017 budget. With experts predicting the embargo on EU produce is likely to last several years, Russia has declared its ambition to achieve food self-sufficiency by 2020.

The Russian government has made this a key policy position, claiming food production generates more export income for Russia than arms. It sees itself tapping into the emerging high-value global market segment that is concerned about intensive farming and bio-engineered food, with Russia publicly declaring it could quickly become the world's biggest supplier of organic produce.

While this aspiration and the timeline envisaged may be ambitious, it is nonetheless an indicator of what the Russian farming industry is shopping for at the moment, and the Irish agri-sector has just the capability they are looking for.

Gerard MacCarthy is Enterprise Ireland manager for Russia and the Commonwealth of Independent States

Sunday Indo Business

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