Marat Akhmetov: ‘It’s not early spring, and it is nice’
The head of RT Ministry of Agriculture promised not to grow bananas, he explained where the fertilizers go from Ammonia and why it is impossible to get a loan at 5% per annum
The emphasis not on grain but on high-margin crops, such as sunflower, sugar beet and rape, has allowed Tatarstan farmers to improve their financial condition and to increase the amount of crediting for the sowing campaign twofold. This statement was made by the Agriculture Minister Marat Akhmetov. However, as the correspondent of Realnoe Vremya found out, in the case of small farms the situation has worsened: lending amount to subsidiary smallholdings has fallen significantly.
Saving rape
Tatarstan will need about 17 billion rubles for sowing works, which is approximately 500 million more than last year. It was stated by the Minister of Agriculture and Foodstuff Marat Akhmetov at the press conference, answering the question of Realnoe Vremya.
According to the Minister, despite the fact that the total cost has not changed, the enterprises attracted two times more of loan funds – 10 billion rubles in comparison with 5 billion rubles last year. The enterprises will get loans at 16-18% per annum, but the government subsidizes 11% from them.
'Sugar beet, sunflower and rape supported financial condition of our companies significantly. With yields of a tonne of rape per hectare its profitability was 35-50%. This financial relief allowed to repay the defense loans to the banks on time and to renew their credit limits,' the Minister explained the reasons for this success.
The federal officials have reduced the limits of subsidizing of short money
Besides, there was the first tranche of state support from the federal budget at over 1 billion rubles, another half billion Akhmetov expects to receive in April. The support from the regional budget amounted to 1.1 billion rubles, by the end of March they will have been brought to regional farms, promises the Minister. 'Plus, there is supply of seeds: we have more than 300 000 tonnes of spring seeds, if they are taken into account, we also will get about 3.5 billion rubles. We don't have to pay money for them, but still we include them in the total cost,' Akhmetov told about the cost structure.
'By the way, this year the federal government has reduced the limits of subsidizing of short working capital loans. Last year, our annual limit was about 2 billion, this year we have only 651 million. But it is a process, we will work,' he added. The official believes that 16-17 million should be enough for the sowing campaign, but he noted that if the Republic used a little more fertilizers — 100 kg per 1 ha, the sowing campaign would need another 6 billion rubles. 'We are planning to keep the sown area at the same level – about 3 million hectares, whatever hard they are, we don't reduce them,' said the Minister.
Ammonia does export so far
At the same time, according to him, the launch of the plant for production of nitrogenous fertilizers Ammonia has not eliminated a traditional for Tatarstan shortage of fertilizers. Later he explained that its price for fertilizers is comparable to those that are already on the market. Ammonia alleges large credit burden, especially monetary, and the payback period of the project. And they have to invest this amortization in the cost of the products, although technologically it is a very modern company,' said Akhmetov. The Ministry of Agriculture purchases about 150 000 tonnes of fertilizers per year (about half of the required amount) from the plant in Mendeleyevsk, although they are able to give 500 000 tonnes. 'They do export so far,' said the Minister. At the same time, he estimated the total costs for sowing and harvesting in 2016 at about 30 billion rubles. Now in Tatarstan there is a quite high demand for spare parts: at 1.5 billion rubles for the sowing company and another 1 billion – for harvesting.
Akhmetov reminded that this year Tatarstan again relies on high-margin crops: 'My Deputies have already conducted several meetings with heads of all agricultural enterprises of the Republic, and as a result, all work plans have been calculated. This year we will give large areas for corn, grain.' According to him, the task for the first 10 days of sowing campaign – to sow seeds of sunflower, rape, corn — 100 ha each. 'The yield of these crops is very high. They will be an anchor for us. Judging by acquisition prices, the profitability reaches 100%, but we need to work hard for this,' said Akhmetov.
'It's not early spring, snow is still on the fields of the Republic'
The area for sugar beet seeding is being enlarged, the Ministry of Agriculture is planning to collect 2.5 million tonnes this year, and in the following years to increase its capacity to 3 million tonnes. As for the future harvest, it is early to do any forecasts, the Minister believes, pointing out the weather variability. 'In my computer there are some programmes of forecasters and they all give different forecasts. But it's not early spring, snow is still on the fields of the Republic, it's very nice for us,' he says. Akhmetov predicts the beginning of field work at the beginning of the second decade of the month. The Minister noted that Tatarstan doesn't have a goal to reach full self-sufficiency. For example, it traditionally purchased the same seeds of corn, protein components, vitamins and enzymes.
'We should proceed from what is profitable to grow in the climatic conditions of Tatarstan. Of course, we are not going to grow bananas or apricots, but with the main types we are provided,' he said. However, we should focus on the meat and dairy industries, as the Russian market is quite capable to consume about 200-250 thousand tonnes of Tatarstan meat additionally. 'We have programmes for the development of second phases of Kama bacon, Chelny-broiler, AK Bars Holding. Besides, we have a large reserve of growth for the beef production – about 30 000 tonnes. We are passionately engaged in milk but meat sector remains in the shadows, we now decided to strengthen it,' said Akhmetov. However, the task of producing 2 million tonnes of milk per year remains.
Collaterals prevent the farmers from loans at 5% per annum
However, the situation with crediting of farmers and subsidiary smallholdings, which the Republic planned to develop in recent times, is much worse. The thing is, they produced half of all agricultural production, however, the crisis has closed for small farmers access to cheap financing. Banks offer loans to farmers for spring field work under 15.7% per annum, of which the government subsidizes a key rate, i.e. 11%. Thus, farmers get loans at 4.7-5% per annum. However, as the Minister said, banks require collateral and a good balance sheet for that.
'Our farmers use the credits very poorly, they cannot register their property correctly, in order to use it as collateral for loans,' said Akhmetov. 'Unfortunately, we had a very favourable rate for the support of small farms, we attracted huge loans for a variety of areas of development, for the purchase of livestock, equipment, feed, but this system has ceased to work. Last year, crediting of private farms fell tenfold.' According to the official, the federal government should find a solution and restore the order of crediting, which had been in past years.