Translated material
Rural Davos
Russian regions are trying to master the science of international agricultural lobbying
On January 28, the largest agricultural exhibition in Europe, “Green Week,” ended in Berlin. However, the event, which has been taking place annually in the German capital for more than 80 years, has long outgrown the framework of the seven-day event. And now it has also chosen the format of a traditional fair. During the ten days that Green Week continues, the most important issues of European agricultural policy are resolved here. A unique agricultural Davos is a war for markets, the preservation and success of national agriculture.The pragmatic Germans have succeeded most in agricultural lobbying. They brought the top officials of European agriculture, prominent agricultural bureaucrats of the European Union to Berlin and began at the highest level, officially and behind the scenes, to prepare the ground for decisions that would strengthen the position of the German food industry and agriculture on the continent. The Germans see themselves as the leaders of the food market throughout Europe, and at the same time they are extremely reluctant to open their market to imported products, including, and perhaps even primarily from Russia.
Of course, it’s nice to hear how German Chancellor Angela Merkel, at the opening of Green Week, makes a nod towards Russia, calling it “a strategic partner of the European Union in the framework of rapidly developing cooperation in the field of biotechnology and agricultural production.” However, when the essence of this cooperation is revealed behind the scenes, what is mainly seen behind it is expansion into the market of the Russian Federation and maximum protection of one’s own market from the penetration of Russian goods. Germany, which is quite understandable, wants to sell its agricultural machinery, equipment, seeds, and agricultural products to Russia. And as part of the Green Week, it does this quite successfully. For example, the Krasnodar region entered into agreements on the supply of machinery and equipment with Beinlich, KRONEN GmbxH Tec-Trad Germany and a number of others for a total amount of 27 million euros. Perhaps these are successful purchases, but such contracts clearly cannot be considered a success for the national agricultural industry.
Then the Germans took the Russian delegation to a nearby bioethanol production plant. However, when it comes to direct German investment in the construction of such an enterprise in the south of Russia, the German side has so far limited its interests in relation to the Russian Federation to the supply of equipment or even bioethanol itself.
The governor of the Rostov region, Vladimir Chub, achieved greater progress on German investment in the creation of the Russian biofuel industry in negotiations with the Zuydzucker company. Zuydzucker, one of Europe's largest producers of bioethanol and sugar, at the suggestion of Mr. Chub, will study in detail the possibility of its entry as a co-investor in the Don bioethanol plant. However, when these agreements will lead to real capital investments is still unknown.
At Green Week, Russian Minister of Agriculture Alexey Gordeev spoke a lot about Russia’s readiness to cooperate with the European Union in the field of bioenergy. “We are ready to assist Europe with supplies of biomass, and in the near future, biofuel,” the minister said, in particular, noting that today about 20 million hectares of productive arable land remain unclaimed in Russia. This resource, according to the head of the Ministry of Agriculture, “could be used for growing energy crops” (rapeseed, grain, corn, etc.), which serve as derivatives for the production of environmentally friendly fuel. “Russia is a partner of the European Union and a country that pursues the same goals as it for environmental protection, in combating global climate change, as well as in the field of energy security,” says the head of the Ministry of Agriculture. However, behind these diplomatic statements there are in fact no real partnerships and common interests.
The European Union and Germany blocked the still non-existent Russian bioethanol with duties ahead of time. Its supply to Western Europe today is either unprofitable or low-profit. Germany and some other Western European countries are now looking at bioenergy as an effective alternative to directly subsidizing the national agricultural sector. The production of biofuels takes surplus agricultural raw materials from the market and ensures high prices for peasant products. The appearance of Russia in this market, with its more attractive prices and potentially larger supply volumes, is currently objectively unprofitable for countries such as Germany.
Achieving concessions from the European Union on this issue means raising Russian agriculture to a qualitatively new level of success and investment attractiveness. However, the Russian Ministry of Agriculture did not use at least the current “Green Week” for this. Although Alexey Gordeev, following the example of his Western European colleagues in Berlin, devoted a lot of time to agricultural lobbying. In particular, he met with the European Commissioner for Health and Consumer Protection, Marcos Kyprianou. Among the documents signed at the meeting was an appendix to the memorandum on veterinary certificates for livestock products. The paper guarantees that products that are not authorized for sale on the European Union (EU) market will not be supplied to Russia. In this way, the Russian Federation is trying to protect itself from low-quality products from new EU members such as Romania and Bulgaria. The well-known conflict situation surrounding the supply of Polish meat to Russia was also discussed in Berlin. All these topics are certainly important for the future of the domestic agricultural industry, but they clearly lack globality, and Russian agricultural lobbying lacks consistency, power and an integrated approach. “Green Week” is just a platform where the skill and training of the agricultural lobby is more clearly visible.
Ukraine is boasting today that its lard was in unprecedented demand during the current “Green Week” - in ten days in the Ukrainian pavilion, the Germans ate more than 2 tons of this Little Russian delicacy. But real success is when your products sell well not at a large international fair, but are present on the shelves of Western European stores. But Ukrainian lard, despite all its undoubted taste advantages, has not yet managed to get through there.
The 600 thousand Germans who visited the largest pavilion of the exhibition - "Russian" - were delighted with the exhibitions and products of the Russian regions, which had already perfectly learned how to put on a fair show. The Southern Federal District especially stood out - presidential envoy Dmitry Kozak managed to bring 11 North Caucasian regions, territories and republics to Berlin this time. Astrakhan, Volgograd, and Dagestan were added to the leaders of the district - the Krasnodar Territory and the Rostov Region, which are distinguished by their high quality of expositions. Everything was swept off the shelves of the Russian pavilion, while the Germans, stingy with praise, spoke with great sympathy about the quality of Russian products. But Western European retail continues to bypass it. Mainly because the European Union has closed itself with bureaucratic, veterinary, customs and other barriers from competitors that are dangerous in terms of the classic price-quality ratio. This means that today it is more important for Russia to succeed not only, and not so much in the production of competitive food, but in the ability to overcome barriers to the path of domestic food to the EU. For this, Russia will need the next “Green Week”.