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Short Financing Terms Hinder Dairy Growth In Russia

Posted by Editor on Thursday, 16 February 2012 14:09 | Published in Agribusiness & Fertlizers

Insufficient terms on investment loans provided for the development of Russia's dairy industry are holding back milk production growth in the country, Deputy Agriculture Minister Shamil Bakhitov has stated. "Dairy cattle farming requires long money with recoupment periods of 10-15 years, but investment loan subsidies are provided for 8 years," he said at the Agrofarm 2012 Exhibition in Moscow.

This reduces the investment appeal of the dairy cattle farming sector and means a reduction in the number of new facilities, he said. The sector saw 477 new facilities launched in 2008, then 223 in 2010 and just 171 in 2011. Such a drop can also be attributed to the drought that hit the sector in 2010. "We had to work with a fodder base deficit," he said. For these reasons, milk production has stabilised at just over 31 m tonnes.

Current government aid measures are having a positive impact on the sector, Bakhitov said. For the first time in the last 20 years the number of cattle did not drop in 2011 and even managed to increase by 44,000 to exceed 8 m heads of cattle.

"Maintaining positive dynamics will mean milk production can increase by 200,000 tonnes in 2012 to 32 m tonnes," the deputy minister predicts. (Interfax)