The Ministry of Agriculture plans to save CAPEX for the dairy industry

The Ministry planned to cancel this support measure since next year. The efficiency of CAPEX seemed insufficient to the Ministry of Agriculture. Last year, Minister of Agriculture Dmitry Patrushev explained that an average of 8 rubles of investment is attracted for the ruble directed to CAPEX. Whereas, based on 1 ruble of subsidies under concessional lending, the volume of loans amounted to more than 31 rubles of short-term and almost 20 rubles of investment loans.

According to Elena Fastova, the question was about financing - the cost for CAPEX for the dairy industry in the last three years, was 5 billion rubles a year. However, the Ministry admitted that this is a popular measure that allows you to attract investors, increase production and increase self-sufficiency in milk. In this regard, it was decided to keep it. 

‘CAPEX is a powerful incentive for business. For example, until recently, we did not have a mass industrial production of vegetables in greenhouses. And thanks to CAPEX over the past three years, we have almost reached self-sufficiency,’ the Deputy Minister gave an example.

She noted that now this measure is also maintained for other areas where there is a serious import dependence - in the construction of breeding and hybrid centers, nursery-gardens, vegetable stores, as well as enterprises for processing milk for baby food.

Maintaining CAPEX will allow you to solve the problem of self-sufficiency in milk for 4-5 years. Without them, it would be difficult to do this, says Artem Belov, General Director of Soyuzmoloko. Now we produce 84% of the domestic demand for dairy products. The Food Security Doctrine specifies a minimum of 90%.

Reimbursement of direct costs for the construction of farms is especially important in the current economic situation, the expert notes. Over the past year, the cost of production of dairy products has increased by 18% (April 2021 to April last year). First of all, feed prices have risen significantly. Packaging and electricity have increased in price, and the ruble has weakened. The increase in retail milk prices did not compensate for the increase in production costs, as milk prices limited consumer demand.

Artem Belov says that he knows several investment projects for the construction of dairy complexes that were frozen, or investors withheld these projects. Maintaining CAPEX may convince investors to reactivate them.

‘Over the past five years, the industry has received preferential loans and CAPEX. If the decision to keep CAPEX is made, it will be a good sign for investors that it makes sense to invest in the industry, and the state will support this. At one time, the appearance of CAPEX allowed us to reduce the payback of projects by 2-3 years. And the payback period for projects in animal husbandry is more than 10 years,’ the expert says.