Indoor vegetable producers turn to the Russian Ministry of Agriculture seeking additional support

Izvestia newspaper published an article describing the problems of the greenhouse vegetable production sector caused by the changing economic situation as well as the ways to solve them. To continue ensuring the food security of the country, the industry will have to receive support from the Ministry of Agriculture.

The Fruit and Vegetable Union sent a letter to the Ministry of Agriculture explaining the importance of increasing federal support and suggested the inclusion of “indoor production” in the priority subsidy program. Representatives of the industry community believe that the current situation in the greenhouse industry fails to provide producers with sufficient resources for stable effective work in fluctuating economic conditions. The main crops grown indoors in Russia are tomatoes and cucumbers. While imports still occupy a significant market share, the companies need government support to replace foreign supplies (i.e. increase the volume of domestic production). The possible measures include the prolongation of previously issued soft loans that enabled the intensive development of the industry along with the implementation of the import substitution program.

The authors of the article cited the opinions of the leading participants of the Russian greenhouse vegetable market. Among the experts was Maria Bocharova, the First Vice President of ECO-Culture holding.

She claims that the construction of modern indoor plants for year-round production entails significant costs. That is why the holding cannot expand its greenhouse areas without soft loans as part of the state rate subsidy programs. Largely thanks to these financial resources, ECO-Culture keeps commissioning new facilities and increasing the production volume, not to mention being a major employer and taxpayer in the regions of its presence.

Over the years, the state subsidization of the key rate for lending banks ranged from 70 to 90%. For the economic efficiency of the business, it is important for borrowers that the preferential rate is not higher than 5%. Otherwise, many industry enterprises will experience problems with working capital, which will make it more difficult for them to maintain the necessary level of stability.

All in all, the new economic realities make it difficult to do business without the state and regional authorities’ support. Therefore, the measures proposed by the Fruit and Vegetable Union are not merely desirable but necessary. The implementation of the complex of measures will enable further effective import substitution and implementation of the Food Security Doctrine of the Russian Federation.

According to the Ministry of Agriculture, greenhouse vegetable production is among the department’s top priorities. While soft loans and subsidies are already available for the industry, the systematic work in this direction is to be continued.

For the full version of the article, please visit Izvestia’s website.