How will the agro-industrial associations of the Vitebsk region operate? An interview with "Sel'skaya Gazeta" with the Deputy Chairman of the Regional Executive Committee, Boris Efremov
Александр Лукашенко совершил рабочую поездку 15 мая в Витебский район, чтобы лично оценить опыт северного региона по созданию интеграционных структур в сельском хозяйстве. Для АПК это новая форма работы, и, похоже, она успешно приживается. Вывод Главы государства таков:
— Наверное, мы нащупали земную форму — интеграционную структуру. Благодаря вам всем нащупали. Мое дело уже было проанализировать и сказать да или нет. Я вижу, что это земное. От земли идут корма, а потом молоко, мясо — на переработку. Переработал, продал, денежные потоки пошли туда, откуда пришли молоко, мясо. Это нормально. И так мы можем за пять лет Витебскую область возродить.
What changes are taking place in the region's agro-industrial complex, how will integration structures operate, and what support has the state provided them? "SG" asked Boris EFREMOV, Deputy Chairman of the Vitebsk Regional Executive Committee, to answer these and other questions.
— Boris Sergeevich, after the signing of Decree No. 70 "On the Development of the Vitebsk Region's Agro-Industrial Complex" on February 25, 2020, 7 agro-industrial associations were created in the region based on OJSC "Verkhnedvinsky Butter and Cheese Factory," "Vitebsk Meat Packing Plant," "Moloko" of Vitebsk, "Postavsky Dairy Plant," UP "Gluboksky Condensed Milk Plant," "Orshansky Meat Packing Plant," "Polotsk Dairy Plant." They include 107 agricultural enterprises. In total, there are 239 in the region. What criteria were used to decide who to take under their wing and who to leave to float freely?
— The agro-industrial associations (as they are now called) include financially unstable farms that require assistance in conducting their economic activities. If the leading enterprises had not taken them on board, they could not have survived and would have gone bankrupt. In union with processors, there is an opportunity to preserve the teams and the production base on which further development can be built. Strong agricultural enterprises with investors, already part of other integration associations, such as the Vitebsk Broiler Poultry Farm, as well as farms undergoing financial recovery under Decree No. 399, remained outside these holdings.
— In winter, I visited a farm in the Liozno district, which cannot be called financially strong. But the management said they did not want to join an agro-industrial association. How were such agricultural enterprises handled?
— This issue was raised during the Head of State's visit to the Vitebsk region in November last year and during the discussion of Decree No. 70 project with the President last winter. It was clearly stated: there is no need to forcibly drive farms into holdings. Each must make its own choice independently. That is how we acted. Those who did not want to were not included.
— What if someone who is on their own today changes their mind tomorrow and asks to join an association? Will they be accepted?
>
— Theoretically, this is possible, but in practice, three months after the issuance of Decree No. 70, the region will no longer be able to defer the debt obligations of such farms. If for those who joined earlier, they are stretched over 15 years, then for a newcomer, if he has a meager bank account, the parent enterprise will have to pay immediately. This is an irrational expenditure of money. No one will go for this. However, if it becomes truly unbearable for some of these agricultural enterprises over time, if the question of their impossibility of existence arises, then there is still a way out. They can be attached in whole or in part to farms within agro-industrial associations, to be enlarged. That is, the number will not increase there, but the areas, the material base, and the number of workers will simply grow.
— In three out of four agro-industrial associations created under Decree No. 320 of August 25, 2016 "On the Development of Agricultural Production in the Vitebsk Region," the parent enterprises have now changed. Why was it necessary to take such a step?
— By the time Decree No. 320 was adopted, due to the financial condition of other enterprises, only grain processors in Orsha, Polotsk, and Glubokoye could become heads of integration structures. They fulfilled their function of preserving agricultural production in their raw material zones. But now the parent enterprise is obliged to pay off the deferred debts of the farms and invest funds in their development. For this, there must be maximum concentration of revenue. And the most money from the sale of goods comes to processors of livestock products. Therefore, the Polotsk Dairy, Glubokoye Dairy-Canning, and Orsha Meat-Canning plants have become the leaders of the updated holdings.
— The next question will undoubtedly be difficult. After the issuance of Decree No. 320 in 2016, there were many positive emotions: they said, let's unite raw material producers and processors into four integration structures, from field to shelf, and everything will be fine. But it turned out that the drowning ones began to drag the rescuers with them, and the integration structures began to operate at a loss. Aren't you afraid that history might repeat itself?
— First, let's clarify this. There are people who claim that Decree No. 320 did notworked, so a new one had to be adopted. I believe: one cannot be so categorical. Yes, not everything has been done that was planned. In agricultural enterprises, the required level of raw material production, revenue, profitability, and profit has not been achieved in integration structures. This has not allowed them to become self-sufficient. But, on the other hand, if it weren't for the regulatory document, those farms would not have survived until 2020. They would have gone bankrupt, the land would have been empty, and people would have been left without work. And thanks to the holdings, they got new equipment, other material resources, and agricultural production exists there. This is the main thing. And now, thanks to the deferrals and installments of debts within the framework of Decree No. 70, they will have the opportunity to get a breath of fresh air to develop further, increase the level of production, and eventually resolve all problems.
— To develop, investments are needed. Where to get them?
— According to Decree No. 70, an order of the chairman of the regional executive committee has been adopted on the amount of mandatory deductions to the special account of the Vitebsk concern "Meat and Dairy Products". Processors will contribute 3 percent of the revenue from the sale of goods, works, and services after paying taxes to the budget, and other enterprises will contribute at least 1 percent. The money will be used to pay off obligations, purchase materials, equipment, livestock, mineral fertilizers, plant protection products, etc.
— Any reforms will not bring results if the main problem is not solved — increasing the production of agricultural products. What tasks are set here for the future? How are they planned to be solved?
— By 2025, it is planned to milk at least 5,000 kilograms of milk per cow (in 2019 - about 4,000), increase beef production by 30 percent, and pork by 70 percent. Of course, animal husbandry begins with feed. There are about 400,000 hectares of grain crops in the region. If 30 centners are harvested from each, the gross harvest will be 1.2 million tons. Is such productivity within our capabilities? Quite. Why is so much grain needed? Public animal husbandry requires 855,000 tons, the state order is 120,000 tons, and 250,000 tons are for seeds with an insurance fund.
— But for cattle, first of all, grass feed is needed.>
— Here's the situation. Out of 188,000 cows, only 24 percent are kept in year-round housing; the rest graze in the summer. Any specialist knows that it is significantly more difficult to adhere to technology and achieve high results on pasture compared to modern farms. The situation is better in other regions. In some, the majority of cows are indoors all year round. Vitebsk region should strive for this. Therefore, our priority is the reconstruction and construction of new livestock facilities where modern technologies for keeping and milking cows can be applied to increase herd productivity. Moreover, an important point must be considered. The rural population is decreasing. And we still have many small farms with 100-200 heads, milked through a milk pipeline. There, an operator handles only 50 cows, while at modern large complexes, it's 5 times more. This means significantly fewer milkmaids are needed. That's why we are setting a goal to reach a point by 2025 where approximately half of the milking herd is kept in year-round housing. In this case, fewer pastures will be needed, and more feed can be grown on arable land in the freed-up areas.
— New technologies are not implemented for their own sake…
— Of course, all this is done for people. So that they live better, work more comfortably. So that the rural worker has a decent salary. When a milkmaid receives not 500-600 rubles, but twice as much, she doesn't try to leave the farm; on the contrary, she wants to get there.
— Thank you, Boris Sergeyevich, for your comprehensive answers to all questions.
— Наверное, мы нащупали земную форму — интеграционную структуру. Благодаря вам всем нащупали. Мое дело уже было проанализировать и сказать да или нет. Я вижу, что это земное. От земли идут корма, а потом молоко, мясо — на переработку. Переработал, продал, денежные потоки пошли туда, откуда пришли молоко, мясо. Это нормально. И так мы можем за пять лет Витебскую область возродить.
Alexander Lukashenko made a working trip on May 15 to the Vitebsk region to personally assess the northern region's experience in creating integration structures in agriculture. This is a new form of work for the agro-industrial complex, and it seems to be taking root successfully. The Head of State's conclusion is as follows:
— Probably, we have found a practical form — an integration structure. Thanks to all of you, we have found it. My job was to analyze and say yes or no. I see that it is practical. Feed comes from the land, and then milk, meat — for processing. Processed, sold, cash flows went back to where the milk and meat came from. This is normal. And this way, we can revive the Vitebsk region in five years.
What changes are taking place in the region's agro-industrial complex, how will integration structures operate, and what support has the state provided them? "SG" asked Boris EFREMOV, Deputy Chairman of the Vitebsk Regional Executive Committee, to answer these and other questions.
— Boris Sergeevich, after the signing of Decree No. 70 "On the Development of the Vitebsk Region's Agro-Industrial Complex" on February 25, 2020, 7 agro-industrial associations were created in the region based on OJSC "Verkhnedvinsky Butter and Cheese Factory," "Vitebsk Meat Packing Plant," "Moloko" of Vitebsk, "Postavsky Dairy Plant," UP "Gluboksky Condensed Milk Plant," "Orshansky Meat Packing Plant," "Polotsk Dairy Plant." They include 107 agricultural enterprises. In total, there are 239 in the region. What criteria were used to decide who to take under their wing and who to leave to float freely?
— The agro-industrial associations (as they are now called) include financially unstable farms that require assistance in conducting their economic activities. If the leading enterprises had not taken them on board, they could not have survived and would have gone bankrupt. In union with processors, there is an opportunity to preserve the teams and the production base on which further development can be built. Strong agricultural enterprises with investors, already part of other integration associations, such as the Vitebsk Broiler Poultry Farm, as well as farms undergoing financial recovery under Decree No. 399, remained outside these holdings.
— In winter, I visited a farm in the Liozno district, which cannot be called financially strong. But the management said they did not want to join an agro-industrial association. How were such agricultural enterprises handled?
— This issue was raised during the Head of State's visit to the Vitebsk region in November last year and during the discussion of Decree No. 70 project with the President last winter. It was clearly stated: there is no need to forcibly drive farms into holdings. Each must make its own choice independently. That is how we acted. Those who did not want to were not included.
— What if someone who is on their own today changes their mind tomorrow and asks to join an association? Will they be accepted?
>
— Theoretically, this is possible, but in practice, three months after the issuance of Decree No. 70, the region will no longer be able to defer the debt obligations of such farms. If for those who joined earlier, they are stretched over 15 years, then for a newcomer, if he has a meager bank account, the parent enterprise will have to pay immediately. This is an irrational expenditure of money. No one will go for this. However, if it becomes truly unbearable for some of these agricultural enterprises over time, if the question of their impossibility of existence arises, then there is still a way out. They can be attached in whole or in part to farms within agro-industrial associations, to be enlarged. That is, the number will not increase there, but the areas, the material base, and the number of workers will simply grow.
— In three out of four agro-industrial associations created under Decree No. 320 of August 25, 2016 "On the Development of Agricultural Production in the Vitebsk Region," the parent enterprises have now changed. Why was it necessary to take such a step?
— By the time Decree No. 320 was adopted, due to the financial condition of other enterprises, only grain processors in Orsha, Polotsk, and Glubokoye could become heads of integration structures. They fulfilled their function of preserving agricultural production in their raw material zones. But now the parent enterprise is obliged to pay off the deferred debts of the farms and invest funds in their development. For this, there must be maximum concentration of revenue. And the most money from the sale of goods comes to processors of livestock products. Therefore, the Polotsk Dairy, Glubokoye Dairy-Canning, and Orsha Meat-Canning plants have become the leaders of the updated holdings.
— The next question will undoubtedly be difficult. After the issuance of Decree No. 320 in 2016, there were many positive emotions: they said, let's unite raw material producers and processors into four integration structures, from field to shelf, and everything will be fine. But it turned out that the drowning ones began to drag the rescuers with them, and the integration structures began to operate at a loss. Aren't you afraid that history might repeat itself?
— First, let's clarify this. There are people who claim that Decree No. 320 did notworked, so a new one had to be adopted. I believe: one cannot be so categorical. Yes, not everything has been done that was planned. In agricultural enterprises, the required level of raw material production, revenue, profitability, and profit has not been achieved in integration structures. This has not allowed them to become self-sufficient. But, on the other hand, if it weren't for the regulatory document, those farms would not have survived until 2020. They would have gone bankrupt, the land would have been empty, and people would have been left without work. And thanks to the holdings, they got new equipment, other material resources, and agricultural production exists there. This is the main thing. And now, thanks to the deferrals and installments of debts within the framework of Decree No. 70, they will have the opportunity to get a breath of fresh air to develop further, increase the level of production, and eventually resolve all problems.
— To develop, investments are needed. Where to get them?
— According to Decree No. 70, an order of the chairman of the regional executive committee has been adopted on the amount of mandatory deductions to the special account of the Vitebsk concern "Meat and Dairy Products". Processors will contribute 3 percent of the revenue from the sale of goods, works, and services after paying taxes to the budget, and other enterprises will contribute at least 1 percent. The money will be used to pay off obligations, purchase materials, equipment, livestock, mineral fertilizers, plant protection products, etc.
— Any reforms will not bring results if the main problem is not solved — increasing the production of agricultural products. What tasks are set here for the future? How are they planned to be solved?
— By 2025, it is planned to milk at least 5,000 kilograms of milk per cow (in 2019 - about 4,000), increase beef production by 30 percent, and pork by 70 percent. Of course, animal husbandry begins with feed. There are about 400,000 hectares of grain crops in the region. If 30 centners are harvested from each, the gross harvest will be 1.2 million tons. Is such productivity within our capabilities? Quite. Why is so much grain needed? Public animal husbandry requires 855,000 tons, the state order is 120,000 tons, and 250,000 tons are for seeds with an insurance fund.
— But for cattle, first of all, grass feed is needed.>
— Here's the situation. Out of 188,000 cows, only 24 percent are kept in year-round housing; the rest graze in the summer. Any specialist knows that it is significantly more difficult to adhere to technology and achieve high results on pasture compared to modern farms. The situation is better in other regions. In some, the majority of cows are indoors all year round. Vitebsk region should strive for this. Therefore, our priority is the reconstruction and construction of new livestock facilities where modern technologies for keeping and milking cows can be applied to increase herd productivity. Moreover, an important point must be considered. The rural population is decreasing. And we still have many small farms with 100-200 heads, milked through a milk pipeline. There, an operator handles only 50 cows, while at modern large complexes, it's 5 times more. This means significantly fewer milkmaids are needed. That's why we are setting a goal to reach a point by 2025 where approximately half of the milking herd is kept in year-round housing. In this case, fewer pastures will be needed, and more feed can be grown on arable land in the freed-up areas.
— New technologies are not implemented for their own sake…
— Of course, all this is done for people. So that they live better, work more comfortably. So that the rural worker has a decent salary. When a milkmaid receives not 500-600 rubles, but twice as much, she doesn't try to leave the farm; on the contrary, she wants to get there.
— Thank you, Boris Sergeyevich, for your comprehensive answers to all questions.