Russia on track for record grain harvest

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/47

Preliminary figures suggest the grain harvest this year will exceed 123 million metric tons, and increase of about 15 % over last year. Thanks to good weather, the wheat harvest will be nearly 20 % larger than in 2015. Last year’s wheat harvest was about 65 million metric tons, of which about 26 million tons went to export. Wheat exports this year are expected to rise to over 30 million tons, which would make Russia the world’s largest wheat exporter. Good harvests for most of the world’s wheat producers have lowered the wheat price to its lowest level in a decade. The decline in export prices and ruble appreciation threaten the profitability of many farm operations. To ease the strain on farmers, the government decided in September to temporarily eliminate wheat export tariffs.

Russia’s agricultural land amounts to about 385 million hectares (ha), of which about half is arable land. Last year about 140 million ha of arable land was in agricultural use, of which about 80 million ha were under cultivation. Rosstat reports that about 47 million ha was devoted to grain crops, and about half of that was wheat. Some 17 million ha was allocated for fodder crops (e.g. hay, alfalfa) and about 12 million ha to vegetable oil crops (e.g. rapeseed, sunflower).

There has been a strong concentration of farmland holdings in recent years. Farms of private homesteaders average about 240 ha, while farmland held by an average large agricultural business is about 12,100 ha. A list compiled by the consulting firm BEFL shows that Russia has at least 43 firms with land holdings of more than 100,000 hectares (1,000 square kilometres). The six largest holders of farmland together control about 3.5 million ha of farmland. Family members of agriculture minister Alexander Tkachev own the dairy producer Agrokomplex, which controls about 456,000 ha. The average field area of a Finnish farm is about 44 ha.

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