OREANDA-NEWS. May 23, 2012. Transcript of the beginning of the meeting:

Dmitry Medvedev: This is the perfect venue for this meeting. You have invited me, Mr Denin (Governor of the Bryansk Region) and our other colleagues. As we agreed, today I’ve arrived in a region that is implementing a unique project on livestock farming. And, as we also agreed, this meeting is devoted to beef farming, which is probably the most difficult area in agriculture. We are all following the implementation of projects in this sphere. The Bryansk Region is carrying out Miratorg, the biggest project. There has already been huge investment in this project, but I think my colleagues will talk about this later. I understand that further investment in this project will also be substantial. Many people work at this enterprise, and receive good wages. Let’s listen to the presentation later on – they will probably tell us about this in more detail.

I must admit that when we started dealing with a national project in agriculture – I remember this was in 2006 – there were many skeptics. There were many skeptics in the government, not to mention some independent economists. They thought it was useless to invest in Russian agriculture. But today we see that we have come a long way to achieve positive results in the rural sector. The situation is changing. The industry has finally attracted sound investors – largely due to state support, on the one hand, and business initiatives, on the other. However, some sectors are in a far poorer state, including beef farming or red-meat production. This is what I would like to discuss.

Global beef farming has grown 12% in the past 15 years. In comparison, pork production has grown 30% – or by nearly one-third. Poultry production has seen a considerable growth of 85%. Regrettably, the national cattle stock continues to drop despite measures taken to prevent this from occurring, although the pace of the decline is dramatically less than before. The situation is better in our country than, say, in neighbouring Ukraine or other countries. Still, the cattle stock has been decreasing. For the sake of objectivity, we should note that it has also decreased in other countries, including in the United States. The EU has reduced exports by 85.7% and become a net importer. Generally speaking, this is not just our problem. It is worsened by the fact that – to put it bluntly– we have never had proper beef production. Whatever some political forces say, we have never had a developed livestock industry. Thus, we are creating this industry from scratch.

The strictly economic reasons are also obvious to everyone – long pay-off periods, the current reduction of accessible land and water resources and the re-orientation of agricultural producers – both small farm holders and big companies – to more profitable directions of agriculture, and last but not least, the excess number of regulations in all areas.

The world’s population is increasing; the global middle class, as those who have substantially increased the amount of meat in their diets are sometimes called, have a growing purchasing capacity. Needless to say, in these conditions, the supply cannot meet the demand. If this trend persists, Russian beef importers will have to compete for contracts against their counterparts from other countries, which will place our market and prices too dependent on the world situation.

I know this is common knowledge, but let me remind you that the price of beef has practically tripled in various countries over the last few years. This is a very serious increase. Russia must develop its own effective beef farming, reduce its dependence on imports, fill its own market with quality and affordable meat and occupy a befitting place on the world market.

Our main asset – not counting all those present (enthusiasts and entrepreneurs) and state support – are the natural conditions that very few other countries have. Their resources are very limited. We have the biggest croplands and we should capitalise on this. We have territories where the climate makes traditional agriculture (I’m referring to plant growing and grain production) virtually pointless. There are many regions like Bryansk. In principle, projects like Miratorg may be launched in other regions too. We have just discussed this issue. It is crucial that these projects be as big or even bigger than the one in the Bryansk Region.

According to expert estimates, our agribusiness is capable of increasing production. Competition in the poultry and pork markets is already prompting those who want to make a future for themselves to occupy the still available niches in beef farming. This is primarily cattle, of course.

Over 10 medium and large scale projects with a total investment of more than 20 billion roubles have been put on the table since the start of 2012. In this context, of special importance is a well-considered…