Our today’s interviewee is Nikolai Shcherbakov, Director General, Uncommercial Partnership “Kuban Gardeners”.
Q.: What does present-day Kuban horticulture look like? What plants are cultivated in the region?
A.: The Kuban region today is undoubtedly the national leader in gardening. Two thirds of the region’s 34,000-hectare orchards are planted with apple-trees. The most planted drupaceous cultures are sweet cherries, plums and cherry plums; at the Black Sea coast peaches prevail, with very few apricots.
With an annual yield of 320,000 tons, Kuban accounts for about 40% of the national fruitage. Most of it is sold to Moscow and St. Petersburg.
The total national fruitage is about 850,000 tons, while the country’s demand is about 3 million tons. It is easy to calculate that we are lacking some 2.15 million tons to satisfy the demand. So it means that we must keep laying out new orchards.
Presently there are about 1,500 hectares of new orchards laid out every year. With such a speed, we will need some 15 years or so to satisfy the demand. Will the sanctions proceed for such a long time? Nobody can guarantee that the embargo which is now working for the gardeners would not be lifted. So our business remains in the state of uncertainty: we could continue investing in new orchards, but what if imported fruits would inaptly come back to Russia?
Q.: What would happen if the sanctions would be lifted?
A.: If they would be lifted, it would be a disaster for the gardeners: prices would climb down in a while, and the whole industry would simply collapse.
Now there are a number of projects that are to start bringing profit in four years only. Many farms have taken loans against governmental guarantees. By the way, we have information that the subsidies would be curtailed. If it would happen, a bunch of new businesses may collapse before they would be able to get any harvest. This would concern everyone, including the nurseries that also dispersed planting stock on a security of future backup. Many farms have planted new orchards; some spent quite a lot to lay out really intensive orchard systems.
If the state would leave our farmers one to one with their problems, we would immediately find ourselves in the mid-1990s, when the industry was on the verge of surviving.
Q.: How hard is it to compete with foreign suppliers? Why are their prices better?
A.: It is very hard, if not impossible. Before the embargo, Poland used to be the largest supplier. This country grows around 2 million tons of apples –
twice as many as in Russia. The overproduction helps Poland dump on the market.
Officially Poland has re-directed its main supplies to China, but its apples continue to come to Russia, for instance, via Belarus. These products cost less than our prime cost which is 17–19 rubles a kilo.
Q.: At different levels, the authorities are declaring that they continue to support the agricultural sector and subsidize bank rates. How significant this assistance is?
A.: It has been very significant for the past two years. The subsidies for planting new orchards have nearly doubled – from 130,000 to 230,000 rubles a hectare. A usual intensive orchard costs about 300,000 rubles a hectare. Stone fruits – cherries and plums – may fit into the governmental money.
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Ioannis Kasoulides: “It’ll Be Hard for Business to Return to Russia Due to Sanctions”
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