Development of agricultural output of Russia in 2015 US$ since 1961
Agriculture in Russia is an important part of the economy of the Russian Federation. The agricultural sector survived a severe transition decline in the early 1990s as it struggled to transform from a command economy to a market-oriented system.[1] Following the breakup of the Soviet Union in 1991, large collective and state farms – the backbone of Soviet agriculture – had to contend with the sudden loss of state-guaranteed marketing and supply channels and a changing legal environment that created pressure for reorganization and restructuring. In less than ten years, livestock inventories declined by half, pulling down demand for feed grains, and the area planted to grains dropped by 25%.
The use of mineral fertilizer and other purchased inputs plummeted, driving yields down. Most farms could no longer afford to purchase new machinery and other capital investments. Following a nearly ten-year period of decline, Russian agriculture has experienced gradual ongoing improvement.[2] The 2014 devaluation of the rouble and imposition of sanctions spurred domestic production; in 2016 Russia exceeded Soviet Russia's grain production levels, and in that year became the world's largest exporter of wheat.[3] In the last years Russia has emerged as a big agricultural power again,[3][4] despite also facing various challenges.[4]
Geopolitical analyses of climate change adaptation foresee large opportunities for Russian agriculture during the rest of the 21st century as Siberia's arability increases.[5] Managing migration flows, internal and international, is expected to be a central aspect of the process.[5]
Production statistics overview
In addition to smaller productions of other agricultural products, production statistics in 2018 include the following:[6]
It was the 3rd largest world producer of wheat (72.1 million tons), second only to China and India;
It was the world's largest producer of sugar beet (42 million tons), which serves to produce sugar and ethanol;
It was the 3rd largest world producer of potatoes (22.3 million tons), second only to China, and India;
It was the largest world producer of barley (17 million tons);
It was the 2nd largest world producer of sunflower seeds (12.7 million tons), second only to Ukraine;
It was the 13th largest world producer of maize (11.4 million tons);
It was the world's largest producer of oats (4.7 million tons);
It was the 12th largest world producer of tomatoes (2.9 million tons);
It was the 4th largest world producer of cabbages (2.5 million tons), second only to China, India, and South Korea;
It was the 2nd largest world producer of dry peas (2.3 million tons), second only to Canada;
It was the 3rd largest world producer of rye (1.9 million tons), second only to Germany and Poland;
It was the 10th largest world producer of rapeseed (1.9 million tons);
It was the 8th largest world producer of apples (1.8 million tons);
It was the 4th largest world producer of cucumbers (1.6 million tons), second only to China, Iran, and Turkey;
It was the 9th largest world producer of onions (1.6 million tons);
It was the 4th largest world producer of carrots (1.4 million tons), second only to China, Uzbekistan and the United States;
It was the 3rd largest world producer of pumpkins (1.1 million tons), second only to China and India;
It was the 2nd largest world producer of buckwheat (931 thousand tons), second only to China;
It was the 3rd largest world producer of flax (557 thousand tons), second only to Kazakhstan and Canada;
It was the 4th largest world producer of chickpeas (620 thousand tons), second only to India, Australia, and Turkey;
It was the largest world producer of currants (398 thousand tons);
It was the 4th largest world producer of cherries (268 thousand tons);
It was the 8th largest world producer of lentils (194 thousand tons);
Russia experiences extreme temperatures in winter and summer, and summer precipitation is low. Many regions of Russia experience six months of snow cover each year and in these places the subsoil can often be frozen permanently. The most fertile regions are in the southern parts of the country between Kazakhstan and Ukraine called chernozem ("black earth") in Russian. Just over 7% of the country's total land is arable, 60% of which is used for cropland and the remainder for pasture.[7]
Geopolitical analyses of climate change adaptation foresee large opportunities for Russian agriculture during the rest of the 21st century as Siberia's arability increases.[5] Managing migration flows, internal and international, is expected to be a central aspect of the process.[5]
Reduction of arable land
The changes that began at the end of the 20th century greatly affected agriculture.[1] Agricultural production has been sharply reduced;[8] and there was a significant reduction in arable land in a number of regions.[9]
Farming machinery plant (Moscow region, July 2019)
Farmers are dissatisfied with the poor working and living conditions.[14][15] The number of rural settlements is constantly decreasing due to poor conditions. For example, 721 villages died out (from 18101 to 17380) in 2 years (from 1 January 2017 to 1 January 2019).[16] Through numerous measures of the government in recent years private farmers became in comparison to the years of the nineties a relevant new pillar in Russian agriculture.[17]
After the Soviet Union collectivised its agricultural sector during the Stalin years and until the 1980s, most agricultural land in Russia was in state ownership, and the transition to a market-oriented economy had to start with privatisation of land and farm assets.[20] Russia's agricultural privatisation programme can be traced back to 1989–90, when Soviet legislation under Gorbachev allowed, first, the creation of non-state business enterprises in the form of cooperatives; and second, legalized private ownership of land by individuals (the November 1990 Law of Land Reform). While household plots cultivated by employees of collective farms and other rural residents had played a key role in Russian agriculture since the 1930s, legislation enabling independent private farms outside the collectivist framework was passed only in November 1990.
The Law on Peasant Farms adopted in December 1990 was followed by laws and decrees that defined the legal organizational forms of large agricultural enterprises, the legal aspects of land ownership, and the procedures for certifying and exercising ownership rights. Specifically, agricultural land was denationalized, and its ownership (together with the ownership of other farm assets) legally transferred from the state to the ownership of kolkhozes. But at the same time the government imposed a ten-year moratorium on buying and selling privately owned land.
The new legal environment created expectations among Western scholars and Russian reform-advocates that family farms would emerge in large numbers and the large-scale collective farms would be restructured. But as it turned out, few peasants were interested in establishing individual farms, and management- and operating-practices inside large agricultural enterprises remained largely unchanged despite formal reorganization.[20] The lack of enthusiasm for the creation of private farms was attributed[by whom?] to inadequate rural infrastructure, which did not provide processing and marketing services for small producers, and also to the fear that families striking out on their own might lose eligibility for social services that were traditionally provided by the local corporate farm instead of the municipality.[21]
Starting in 1993, privatized kolkhoz and sovkhoz units became corporate farms. These farms were legally reorganized as common-stock companies, limited-liability partnerships, or agricultural-production cooperatives and were turned over, usually in their entirety, to the joint ownership of agricultural workers and pensioners. These farms continued to operate largely as they had done under the Soviet system. Today, the term "corporate farm" is an all-inclusive phrase describing the various organizational forms that arose in the process of privatisation without involving distribution of physical parcels of land to individuals.
In diametric opposition to corporate farms is the individual farm sector, which consists of the traditional household plots and the newly formed peasant farms.
The land-code reform of 2002, advanced by the administration of President Vladimir Putin, called for the ownership of real-estate objects to henceforth follow ownership of the attached land plot; granted exclusive right to purchase or lease state-owned land to the owner of the attached real-estate object; gave to private owners of buildings on land plots owned by other private parties the preemptive right to purchase the land; and prohibited the future privatization of real-estate objects without the concurrent privatization of the attached plot.
Russian agriculture today is characterized by three main types of farms. Two of these farm types – corporate farms and household plots – existed all through the Soviet period (the former are basically the successors of the Soviet collective (kolkhoz) and state (sovkhoz) farms). The third type – peasant farms – began to re-emerge only after 1990, during the post-Soviet transition. The evolution of Russian agriculture since 1990 shows a significant change of resources and production from the formerly dominant corporate farms to the individual farming sector. During 2006, household plots and peasant farms combined controlled about 20% of agricultural land and 48% of cattle,[22] up from 2% of agricultural land and 17% of cattle in 1990. The share of the individual sector in gross agricultural output increased from 26% in 1990 to 59% in 2005. Producing 59% of agricultural output on 20% of land, individual farms achieve a much greater productivity than corporate farms.
Shares of agricultural land, cattle headcount, and gross agricultural output for farms of different types (in percent of respective totals)[23]
During 2004, peasant farms accounted for 14.4% of Russia's total grain production (up from 6.2% in 1997), 21.8% percent of sunflower seed (up from 10.8% five years earlier), and 10.1% of sugar beets (3.5% in 1997). Corporate farms produced the remainder of these crops, with hardly any contribution from the small household plots. However, household plots, with a maximum size of 2 hectares (4.9 acres), produced 93% percent of the country's potatoes and 80% of the vegetables, either for family consumption or for sale in the local markets. They also produced 51% of the milk and 54% of the meat in 2003, with the rest coming primarily from corporate farms (the contribution of peasant farms to livestock production was negligible).[25]
As the household plots gained more land in the process of reform, their share in Russia's agricultural production increased from 26% of aggregate value in 1990 to 53% in 2005.[23] According to a survey conducted in three Russian villages,[21] the increase in land holdings and farm production tripled the nominal family income from 512 rubles per month in 1997 to 1,525 rubles per month in 1999 (this includes both cash income and the value of food that the family consumed from its household plot). The change in family income outstripped inflation, increasing by 18% in real terms (the Consumer Price Index grew by 252% between 1997 and 1999)[26]. This real growth in family income reduced the percentage of rural households living in poverty from 29% in 1997 to 17% in 1999.[21]
Planting and harvest dates
Young wheat just coming up in June in a field near Nizhny Novgorod
The winter-crop planting season stretches over nearly three months. The sowing campaign begins in August in the north and advances southward, concluding in late October in the Southern provinces. Spring grain planting in European Russia usually begins in April and progresses from south to north. The "summer" crops—chiefly maize (corn) and sunflowers—are last to be sown, and planting approaches completion by late May or early June. The harvest of small grains (chiefly wheat and barley) moves from south to north and begins in late June in extreme southern Russia.[27]Harvest operations are in full swing by early July and largely finished by mid-to-late August. Maize and sunflower harvest begins in September and continues through October. (View regional crop calendars.)
In the spring wheat region, planting typically begins in May. Oats are sown first, followed by wheat, then barley. Planting is concluded by June. Spring wheat advances through the reproductive stage during mid-July, when temperatures climb to their highest levels and grains are most vulnerable to heat stress. Grain harvest begins in late August and continues through October. It is not unusual for a significant portion of the Russian grain crop—millions of hectares in some years—to remain unharvested, due chiefly to unfavorable weather during the harvest campaign. In an average year, 10 percent of the area planted to spring wheat is abandoned compared to 97 percent of the country's winter wheat area.[28]
The Russian grain export is the foreign trade operations for the sale of grain, primarily wheat grain, from Russia to other countries. Grain has been a traditional item of export income for Russia for centuries, providing the Russian Federation in the 21st century with leadership among the main grain suppliers to the world market along with the EU (2nd place 2019/20), United States (3rd place), Canada (4th place), Ukraine (5th place).[29]
Farm credit
While agricultural policy in Russia had been poorly structured and largely unsuccessful, some basic trends have helped to create forces for change. The first is that state tax revenues have been falling, and hence the spending capacity for agricultural policy has been falling. Total federal transfers to agriculture fell from 10% to 4% of GDP from 1992 to 1993, and budgeted transfers for 1994 are about 5% of GDP.
There has been improvement in the agricultural credit situation in Russia over the past five years – for some farms, at least – due largely to subsidies from the federal government. The national project for agriculture has given impetus to the growth of small farms. During 2006, 36 billion rubles in credit were given to more than 100,000 recipients (as compared to 3.4 billion rubles in credit to 2,500 borrowers in 2005). Traditional farms and personal plots play an important role in the sector, providing more than 87 percent of all production.
The State offers in-kind credits, whereby seed, fertilizer, and other inputs are provided in exchange for grain harvested at the end of the season, though the use of in-kind credit is reportedly decreasing. The government also provides subsidies for the purchase of plant-protection chemicals and fertilizers, and subsidizes two-thirds of the interest rate on loans from commercial banks, which provide the majority of farm credit. Banks remain cautious and insist on certain farm management practices and minimum levels of input use before granting loans (a policy which, according to some observers, has had a significant positive effect on overall efficiency in the agricultural sector), but banks' confidence is boosted by increasingly reliable guarantees from regional administrations who see stability of food production as a high priority. Banks recognize the inherent risk in agricultural financing but also see agriculture as less risky than other industries and are generally willing to lend money to solvent, well-managed farms.
Over fifty percent of Russia's farms, however, are already saddled with considerable debt, due in part to the disparity between grain prices and production costs, and few farms are able to offer sufficient collateral to secure a loan. As a result, many farms are forced to rely on outside investors to guarantee loans. These investors, frequently referred to as holding companies, typically are large, cash-rich, traditionally non-agricultural companies that became involved in agriculture over the past five years. Some viewed crop production as a potentially highly profitable venture, and others were working to guarantee raw materials for vertically integrated food-processing operations.
Holding companies possess assets that satisfy banks' demand for collateral, and a farm that receives a commercial loan with the help of a holding company is still eligible for the federal interest subsidy. Many holding companies, particularly those who were attracted to agriculture by the high grain prices during 2000, have lost interest in crop production following two years of low prices and are bailing out. Investments in crop production don't pay off quickly, in contrast to investments in trade. Although some holding companies remain comfortable with the variable profitability of agriculture and will continue to work with farms, several prominent commodity analysts feel that the overall involvement of big companies in agriculture is declining.
This means that current prospects for significant, long-term investment in agriculture – particularly the purchase of agricultural machinery and grain-storage facilities – are somewhat dim. Land reform has been evolving in Russia since the basic right to own farmland was established in 1993, but "landowners" are still unable to use land as collateral in securing a loan. The situation, however, is not one that can be resolved quickly or easily through legislation alone.
There is no mechanism currently in place to enable banks to evaluate the value of land based on its productivity before issuing loans, and banks likely would be reluctant to use land as collateral regardless of legislation. Furthermore, there are restrictions against non-agricultural use of land that is currently used for agriculture: if land is used for other purposes, the owner loses the title to the land. This imposes a limit on the land's "re-sellability," and, in turn, its value. The use of land as collateral appears to be a remote prospect.[30]
Investments
Investments in fixed capital within the agricultural sector were US$10.17 billion in 2010, which is 3.3% of total investments in the national economy of Russia. Most investments occurred in corporate farming, where about 47.2% of the investments were allocated to production buildings and 36.4% in machinery and technological equipments. Financing of investments was shared by own financial means (49%) and by external means (51%).
State investment program
In December 2006, the State Duma passed a law requiring a state program for investment in agriculture to be passed every five years. This is the first of those programs. Between 2003 and 2007, agriculture received 37.1 billion rubles' support per year.
Governance and economy of Russian agriculture
As non-agricultural sectors grew more rapidly after the collapse of the Soviet Union, the share of agriculture in total GDP in Russia decreased from 14.3% in 1991 to 4% in 2011. The agricultural sector accounted for 6.71% of total employment in 2015.[31]
The importance of Russia's grain exports in the global market, especially related to oilseeds and wheat, meant that during the 2022 Russian invasion of Ukraine sanctions and disruptions to trade from Ukraine caused a significant increase in global grain prices, with some commentators suggesting that the war would precipitate a 2022 food crises.[32][33][34][35]
In 2024, Russian farmers announced plans to reduce wheat cultivation following significant losses earlier in the year. Many farmers intend to shift to more profitable crops, such as peas, lentils, and sunflowers, citing better financial returns and lower risks. This decision reflects broader economic challenges and changing agricultural trends in the region.[36]
Agriculture in Belarus can be divided into two segments: livestock production and crop production. Crop production slightly outweighs livestock production in the country's product mix, accounting for around 55% of gross agricultural output since 1995. Agriculture accounted for 7.9% GDP in 2013, while over the same year that sector accounted for only 3% GDP in the EU.
Agriculture in Uzbekistan employs 28% of the country's labor force and contributes 24% of its GDP. Crop agriculture requires irrigation and occurs mainly in river valleys and oases. Cultivable land is 4.5 million hectares, or about 10% of Uzbekistan's total area, 50% of total area of Uzbekistan is used for agriculture and it has to be shared between crops and cattle. Desert pastures cover fully 50% of the country, but they support only sheep.
Tajikistan is a highly agrarian country, with its rural population at more than 70% and agriculture accounting for 60% of employment and around 20% of GDP in 2020. As is typical of economies dependent on agriculture, Tajikistan has a low income per capita: Soviet Tajikistan was the poorest republic with a staggering 45% of its population in the lowest income “septile”. In 2006 Tajikistan still had the lowest income per capita among the Commonwealth of Independent States (CIS) countries: $1,410 compared with nearly $12,000 for Russia. The low income and the high agrarian profile justify and drive the efforts for agricultural reform since 1991 in the hope of improving the population's well-being.
Agriculture in Kazakhstan remains a small scale sector of Kazakhstan's economy. Agriculture's contribution to the GDP is under 10% – it was recorded as 6.7%, and as occupying only 20% of labor. At the same time, more than 70% of its land is occupied in crops and animal husbandry. Compared to North America, a relatively small percentage of land is used for crops, with the percentage being higher in the north of the country. 70% of the agricultural land is permanent pastureland.
Agriculture in Mongolia constitutes over 10% of Mongolia's annual gross domestic product and employs one-third of the labor force. However, the high altitude, extreme fluctuation in temperature, long winters, and low precipitation provides limited potential for agricultural development. The growing season is only 95 – 110 days. Because of Mongolia's harsh climate, it is unsuited to most cultivation.
Agriculture in Lithuania dates to the Neolithic period, about 3,000 to 1,000 BC. It has been one of Lithuania's most important occupations for many centuries.
The People's Republic of China (PRC) primarily produces rice, wheat, potatoes, tomatoes, sorghum, peanuts, tea, millet, barley, cotton, oilseed, corn and soybeans.
For millennia, agriculture has played an important role in the Chinese economy and society. By the time the People's Republic of China was established in 1949, virtually all arable land was under cultivation; irrigation and drainage systems constructed centuries earlier and intensive farming practices already produced relatively high yields. But little prime virgin land was available to support population growth and economic development. However, after a decline in production as a result of the Great Leap Forward (1958–60), agricultural reforms implemented in the 1980s increased yields and promised even greater future production from existing cultivated land.
Agriculture is considered the backbone of Pakistan's economy, which relies heavily on its major crops. Pakistan's principal natural resources are arable land and water. Agriculture accounts for about 18.9% of Pakistan's GDP and employs about 42.3% of the labour force. The most agricultural province is Punjab where wheat & cotton are the most grown. Mango orchards are mostly found in Sindh and Punjab provinces, making it the world's fourth largest producer of mangoes.
Agriculture in Ethiopia is the foundation of the country's economy, accounting for half of gross domestic product (GDP), 0
Agriculture in Algeria composes 25% of Algeria's economy and 12% of its GDP in 2010. Prior to Algeria’ colonization in 1830, nonindustrial agriculture provided sustenance for its population of approximately 2-3 million. Domestic agriculture production included wheat, barley, citrus fruits, dates, nuts, and olives. After 1830, colonizers introduced 2200 individual farms operated by private sectors. Colonial farmers continued to produce a variety of fruits, nuts, wheat, vegetables. Algeria became a large producer of wine during the late 19th century due to a crop epidemic that spread across France. Algeria's agriculture evolved after independence was achieved in 1962. The industry experienced multiple policy changes modernize and decry on food imports. Today, Algeria's agriculture industry continues to expand modern irrigation and size of cultivable land.
Agriculture in Sudan plays an important role in that country's economy. Agriculture and livestock raising are the main sources of livelihood for most of the Sudanese population. It was estimated that, as of 2011, 80 percent of the labor force were employed in that sector, including 84 percent of the women and 64 percent of the men.
Armenia has 2.1 million hectares of agricultural land, 72% of the country's land area. Most of this, however, is mountain pastures, and cultivable land is 480,000 hectares, or 16% of the country's area. In 2006, 46% of the work force was employed in agriculture, and agriculture contributed 21% of the country's GDP. In 1991 Armenia imported about 65 percent of its food.
Georgia’s climate and soil have made agriculture one of its most productive economic sectors; in 1990, the 18 percent of arable Georgian land generated 32 percent of the republic's net material product in 1990. Since the end of the Soviet period, there has been a decline in the agricultural labor force: some 25 percent of the Georgian workforce was engaged in agriculture in 1990; 37 percent had been so engaged in 1970.
Prior to World War II, agriculture in Bulgaria was the leading sector in the Bulgarian economy. In 1939, agriculture contributed 65 percent of Net material product (NMP), and four out of every five Bulgarians were employed in agriculture. The importance and organization of Bulgarian agriculture changed drastically after the war, however. By 1958, the Bulgarian Communist Party (BCP) had collectivized a high percentage of Bulgarian farms; in the next three decades, the state used various forms of organization to improve productivity, but none succeeded. Meanwhile, private plots remained productive and often alleviated agricultural shortages during the Todor Zhivkov era.
Poland's agricultural sector is vital for European and Global market because it produces a variety of agricultural, horticultural and animal origin products. The surface area of agricultural land in Poland is 15.4 million ha, which constitutes nearly 50% of the total area of the country.
In 2018, Latvia produced 1.4 million tons of wheat; 426 thousand tons of potatoes; 306 thousand tons of barley; 229 thousand tons of rapeseed; 188 thousand tons of oat; 81 thousand tons of rye; 80 thousand tons of beans; and smaller quantities of other agricultural products.
Despite the crisis in Syria, agriculture remains a key part of the economy. The sector still accounts for an estimated 26 percent of gross domestic product (GDP) and represents a critical safety net for the 6.7 million Syrians – including those internally displaced – who still remain in rural areas. However, agriculture and the livelihoods that depend on it have suffered massive losses . Today, food production is at a record low and around half the population remaining in Syria are unable to meet their daily food needs.
Agriculture in Serbia is an important sector of the Economy of Serbia comprising 6.0% of GDP and is valued at 2.416 billion euros.
Agriculture in Mexico has been an important sector of the country’s economy historically and politically even though it now accounts for a very small percentage of Mexico’s GDP. Mexico is one of the cradles of agriculture with the Mesoamericans developing domesticated plants such as maize, beans, tomatoes, squash, cotton, vanilla, avocados, cacao, and various spices. Domestic turkeys and Muscovy ducks were the only domesticated fowl in the precolumbian era, and small dogs were also raised for food. There were no large domesticated animals, such as cattle or pigs.
1 2 Privatisation began in the late 1980s and within a short time most Soviet food was being grown on about 5% of the land that had been freed up for private farming. Lerman and K. Brooks (1996). "Russia's Legal Framework for Land Reform and Farm Restructuring", Problems of Post-Communism, 43(6):48-58.
1 2 Statistical Yearbook of the Russian Federation 2007, Rosstat – Federal State Statistical Service, Moscow (2008), Chapter 14, p. 445 et seq. Download from http://www.gks.ru/ > Публикации > Электронные версии публикаций > Российский статистический ежегодник, 2007г. (in Russian).
Ioffe, Grigory and Nefedova, Tatyana. Continuity and Change in Rural Russia: A Geographical Perspective. Westview Press or Basic books or Lightning Source Inc (1997 or 1998), trade paperback, 328 pages, ISBN0-8133-3634-1
Wegren, Stephen K. Agriculture and the State in Soviet and Post-Soviet Russia. University of Pittsburgh Press (1998), hardcover, 293 pages, ISBN0-8229-4062-0
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