IDM ¦ Country Report
Russia
Efforts to achieve self-sufficiency
on dairy products
Author: Vladislav Vorotnikov, Moscow
New restrictions against imported
dairy products and expanding
state funding under the importreplacement
program are on the
way in Russia, as the government
is discouraged with the recent dynamics in selfsufficiency
rate in dairy products in 2019.
Russian dairy imports have been growing
throughout 2019. In the first 9 months of the
year, the country imported 87,200 tons of butter,
197,500 tons of cheese, 135,900 tons of
condensed milk and cream, 10.3%, 20.9%
and 36.4%, respectively, more than during the
same period of the previous year, the Russian
Federal Customs Service estimated.
Overall, Russia imported 5 million tons of
dairy products in milk equivalent, 16% more
than during the same period of the previous
year, Russian consulting agency MilkNews reported.
This is believed to be the highest level
since the introduction of the 2014 food embargo,
when almost all dairy products from U.S.
and the European Union (EU) origin were wiped
out from the local market.
“The Russian government would continue
state support to the domestic dairy industry until
the self-sufficiency on the market is reached”,
Elena Fastova, deputy Russian Agricultural Minister
announced during a press-conference in
Moscow in November 2019. “As of today, the
self-sufficiency level we have is 84.9%, while
the level we need is 90%,” she added.
This is a major pivot as previously government
officials have been promising to abandon
30 · April 2020 ¦ international-dairy.com
or at least significantly cut state aid to the dairy
industry from 2020.
Russia has failed to meet the targets of the
Food Security Doctrine adopted in 2010, when
the self-sufficiency level on the domestic dairy
market was estimated at 77%. The hike in dairy
imports in 2019 pushed down the self-sufficiency
level from 84.2% to 82.4%, Russian State
Statistical Service Rosstat estimated.
“In 2019, we were able to increase milk
production by 1.5% to 31.1 million tons. In
2025, Russia would be able to produce 34 million
tons and at that point the self-sufficiency
on dairy products could be finally reached,”
Kharon Amerkhanov, director of the livestock
department of the Russian Agricultural Ministry
forecasted.
The import-replacement on the Russian
dairy market is tightly linked to the food embargo.
Speaking recently, Russian Prime Minister
Dmitry Medvedev said that there was a
group of Russian companies who were asking
the government to introduce sanctions without
Dairy products get more expensive in Russia,
while their quality remains low
expiration date, in order to make the domestic
industry more confident in its future.
“The agricultural companies are very happy,
and when they are visiting the government
meetings, they ask us, under no circumstances
to abandon those restrictive measures,” Medvedev
said, adding, however, that there a lot of
people, who on the contrary were not happy
enough with the sanctions.
New tools
In addition, the government has recently recognized
that the import-replacement program is
not working in the same way in all segments of
the Russian dairy market. The most discouraging
picture is seen on the infant milk formulas,
according to the Russian vice Prime Minister
Alexey Gordeev.
In November of 2019, Gordeev instructed
Russian Agricultural Ministry to consider
limiting IMF imports into Russia, including
through introduction of some sort of quotas.
The demand for IMF in Russia is estimated to
be close to 40,000 per year. This category of
dairy products was not subjected to the food
embargo, but the government was encouraging
import-replacement in this segment
through a broad range of state support measures
nonetheless.
The introduction of any import restriction in
this segment would become a catastrophe for
the Russian market, Russian newspaper Kommersant
said, citing its own sources in the Russian
dairy industry.
Russian consumers are completely dissatisfied
with the food embargo