Viktor Askerko: "The credit holiday gave us a second wind"
How is the situation today, are there any developments? This is what an frank conversation with the Deputy Chairman of the Vitebsk Regional Executive Committee, Viktor ASKERKO, is about.
— Viktor Vitalievich, you have been working in the region for less than a year. What is the first thing that a fresh eye sees, what are the main pain points that are visible?
— The region has 132 modern dairy complexes, which is only 17.5 percent of the total number of dairy farms. We have 293 farms with 100 heads or less, and 794 farms with up to 200 heads. Milk production at modern complexes accounts for only 31.2 percent of the total volume. How can we compete even in the domestic market if the national average is 60 percent? Or here is an example: two districts have up to 4 thousand cows, and the daily milk yield does not exceed 30 tons. We have agricultural enterprises that provide such milk yields with a smaller herd. Of course, modernization was needed, but high indebtedness did not allow attracting additional resources. In no country in the world can agriculture operate independently without state support. Agribusiness enterprises need working capital and long-term loans.
The credit burden on the processing industry is also very high. Dairy plants and meat processing plants took out loans for current operations at high interest rates, and advanced payments for the products of farms,allowing them to pay salaries and purchase resources. In 2015,
processing paid over a trillion rubles in bank interest — 35-40
percent of total revenue. Another 392 billion was repaid by agricultural organizations. Due to
high loan interest rates, the region's agro-industrial complex was effectively losing its working
capital. And this was not for just one year.
What is the solution? To consolidate resources in one pair of hands,
for example, the meat processing industry, which is doing better today thanks to exports.
Consolidating resources means creating four
integration structures, which will reduce costs, and centralizing investments
— to effectively manage the modernization of enterprises. It is also important that processing
is obliged not only to work directly with the producer but also to share its
income with him. This is a path that, with a competent approach, offers a chance not only to lift
agricultural production but also to achieve break-even operation. In essence, a "roadmap" has been developed
for the region's agro-industrial complex to emerge from the crisis. But a
legislative framework for uniting agricultural enterprises into integrated
structures and a credit respite were needed.
— Did the Head of State's decree provide it?
— Yes. The document provides for the transfer of agricultural
enterprises' debt on short-term credit obligations to banks to the executive
committee at a rate of no more than 3 percent instead of 30. A
deferral of the principal debt repayment has been granted, with subsequent
installment payments over five years. This is significant assistance.
And it should be understood that the debts are not being written off, but will be repaid.
For this, new structures need to get on their feet, earn funds, and then settle their
obligations. Their task is to ensure
full processing capacity with raw materials, reduce its cost through more efficient
resource utilization and compliance with technical regulations, and strengthen technological discipline. All products within cooperative-integrated
structures are moved using internal waybills. Thanks to this, according to our estimates, it will be possible to reduce the cost of finished products by up to 20
percent, which will allow processors to compete more effectively both inon both domestic and foreign markets. We see the complex situation that has been developing
in recent years. The Russian side often has unsubstantiated
claims against our enterprises, and exports are being closed. Prices are unstable. Having both meat processing and a dairy plant within the structure, one can always have a source of funds: if meat cannot be exported, we will
sell milk.
In addition, each of the four aforementioned
structures will have a retail chain for selling its own products. Our recent decision to transfer shares of OJSC "Vitebskiye Produkty" to the trust management of the state association "Vitebsk Concern
"Meat and Dairy Products" will not only improve the problematic asset but also provide direct access to consumers for our producers' goods.
— Six months have passed since the decree was issued – it's a short period. Are there any initial results?
— The creation of the structures began even before the document was issued. We worked mainly under joint venture agreements,
optimizing staff numbers, selecting personnel, and resolving technological issues. We concentrated resources in one pair of hands, primarily in the meat processing industry. Whatever one may say, processing is doing a little better today. It must work directly with producers, receive cheaper raw materials, and fairly distribute the industry's earnings across the entire chain.
Thanks to the state's support, the enterprises have practically no significant credit burden; they
operate with open bank accounts. This is the most important point: the accounts
have been freed up, and the funds that were previously used to pay off loans and interest rates are now being used for the development of the enterprises.
— Within what amount?
— In 2016, about 23 million rubles. These funds are used to purchase fuel, fertilizers, pay for leased equipment, and cover salaries.
That is, for current operations and development. This allowed for the entire complex of agricultural work to be carried out qualitatively and on time. We are increasing livestock numbers: last year, the cattle population grew by 4.2 thousand heads, including cows by more thanby 2 thousand, pigs — by 27 thousand. By 2021, we need to have 136 thousand head of cattle, 48 thousand cows, and more than 300 thousand pigs.
The public herd must be provided with feed. In 2016, enterprises belonging to integrated structures harvested 29.4 centners of feed units of forage crops per conventional head of livestock, which is 9.2 centners more than the previous year's level, and enterprises of the Orsha integrated structure — 33.1 centners of feed units, 14.6 higher than the 2015 level. We plan to increase the area of fodder lands to 100 thousand hectares, which will allow us to have 550 thousand tons of feed units of forage crops, or 35 centners per conventional head of livestock. Each large dairy complex must be provided with an eighteen-month supply.
There are also economic results for the year. Almost all enterprises have become profitable. Let it be small for now, but it is very important. Yes, not much time has passed, but over the past year, the growth rate of cattle production volumes was 112.3 percent, pigs — 125.4, poultry — 103.4, milk — 108.1. Gains have also increased. In general, livestock production has grown by 11.5 percent.
— Milk today is cash. The state pays 250 dollars per ton. On this product alone, you can build a good agribusiness.
— Over the year, the milk production growth rate in the concern's enterprises exceeded 8 percent on average. Cooperative and integrated structures performed differently. Vitebsk increased production by almost 7 percent, Orsha — by 13.3, Polotsk — by 7, and Glubokskoye — by 2.1 percent. Agricultural enterprises of dairy plants performed well — a growth of 20.7 percent. On average, the concern received 12 percent more milk than in the same period of the previous year. Sales also increased. If in 2015, 111,677 tons of milk were sold, then last year — 121,500. What is important: in January, efficiency increased — 112.7 percent.
— And if we compare it with the regional average indicators as of today?
— Judge for yourself: the milk production growth rateenterprises of the concern is 113 percent compared to the previous year,
sales - 119 with a commodity output of 92 percent. For the region, these figures are 103, 104
and 89 percent, respectively. In monetary terms, for January of the current year, compared to January
of last year, the dairy industry increased by 9424 thousand rubles. If in the
region the average daily weight gain of cattle is 504 grams, in integrated structures -
595 grams.
— Viktor Vitalievich, you cited figures for the entire past year. The presidential decree
has been in effect for less than six months, which means that the efficiency of agricultural production
in the second half of the year is even higher. How was this achieved in such a short period? After all,
it is clear that new farms and complexes could not have been built in time.
— We concentrated the livestock at the enterprises that became part of the integrated structures.
Then the production chain started to work. The complex is connected to the grain processing plant,
which feeds the cattle, performs slaughtering itself, and produces meat. This is how they operate,
but to complete the process, the Head of State has allowed us to unite all enterprises into one
structure within the current year. Why? For example, several farms that have built new dairy
complexes have joined an integrated structure, and they naturally have a large credit burden.
If they were accepted immediately, it could lead to a negative balance and a sharp deterioration
of the financial situation. To "stretch" the financial burden, a couple of farms were joined in
January, some in February, and so on. By the end of the year, the holding will include 61 enterprises.
And the most important thing is that people started receiving higher salaries. They saw a prospect,
and this is motivation.
Of course, the tasks are serious. By the end of 2020, we need to double, or even triple,
production volumes to fulfill the decree of the Head of State. But what matters are not the
indicators, but the efficiency of production that ensures a decent life in the countryside.
— Thank you, Viktor Vitalievich, for the interesting conversation.
"SB". Photos from the archive of the newspaper "Vitbichi".