Features of the Russian Grain Union

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APK-Inform

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The Russian Grain Union (RGU) is one of the largest associations in the agrarian sector of Russia. It embraces more than 400 enterprises and organizations of all forms of property, which activity is related to the production, storage, cleaning, drying, decontamination, processing, domestic and international trade of grains and grain products, animal feed, grain quality examination and certification, as well as organization of the grain market infrastructure; the companies providing financial, supply, transportation, science, technology, information and other services that support operations of the grain sector of the economy. Also, the Russian Grain Union established 10 regional unions throughout the territory of the Russian Federation.

 

The Russian Grain Union goals are:

- protection and representation of interests of the RGU members in the government, realization of other activities at the federal and regional levels for these purposes;

- formation of transparent legal and regulatory framework of the Russian grain market, including such areas as taxation, land, customs, tariff policies for natural monopolies, agricultural loans availability increase, and improvement investment attractiveness of the grain industry; development and support of the exports of grains and by-products;

- facilitation of crop production increase, empowering competitiveness of Russian grains and by-products, formation of fair purchasing prices for grains;

- promotion of technological modification and industry competitiveness empowerment, infrastructure development, lowering production costs and grain market turnover increase;

- creation of the necessary legal, economic and other conditions for efficient operations and interactions among the agrifood market participants;

- informational consulting, legal support to its members.

 

Alexander Korbut, Vice-President at the Russian Grain Union

Member of the expert group at the Ministry of Agriculture of Russia for preparation of a draft State program for development of the agriculture and the markets of agricultural products, raw materials and foodstuffs in 2012-2020 period. Since 2009, an expert at the group for preparation and consideration of the national report about the progress and realization of the State program for development of agriculture and the markets of agricultural products, raw materials and foodstuffs; a member of the Scientific and expert council at the Duma Committee on agrarian issues. Takes part in several international and national projects in the sphere of sustainable development of agriculture.

Grain market analyst, PhD in technical sciences. The author of over 70 scientific works.

 

- Alexander Vadimovich, why is it important to support and lobby the interests of the grain market participants in Russia?

The issue of lobbying of the interests of the grain market participants is very significant. There is a challenge for consolidation of the opinions of the majority of participants in order to specify the justified approaches and objectives.

Our main task is to provide a collective opinion of the market participants, so that there were no problems for promotion of the interests of one organization against the plans of others.

 

- What most significant achievements of the RGU can You highlight?

More than 20 years of work of the Russian Grain Union speak for themselves. We support not only the grain production segment in Russia, but also solved and developed the issue of export sales. To date, it would seem that the challenges are obvious. However, there was a long period of time when we confronted with the opposite view - it is not necessary to develop the export capacities, but it is required to invest only in the country's domestic market. Even so, Russia is one of the TOP-exporters of grains in the world.

The exports have a higher priority than supplying on the domestic market. And such change of priorities for Russia is possible due to high saturation of the domestic market only.

 

- How do You estimate the current situation in the flour milling market segment?

During several recent seasons, Russia started gradually increasing the exports of wheat, but the export sales of finished goods are still low.

Looking for new buyers is the main problem in increasing of flour exports from Russia. In recent times, the domestic consumption of flour and bakery products has started gradually declining due to changes in the nutritional paradigm of the population. Large-scale grain processing capacities are not fully loaded, and there are many expenses, which complicates the cost management of products and investment inflow in the productivity growth. Therefore, the issue of the flour exports development is very complex, and it takes many time and investments. To date, there is rather interesting situation on the market: China just started importing Russian flour. The trend has a relatively positive impact on flour mills of the Siberian Federal District, which has a short run of traffic.

The exports will be further development of the flour milling sector.

 

- What should be done first to achieve the higher performance indicators of the Russian grain market?

Agricultural producers have one problem - where to find a solvent purchaser who buys agricultural products at high prices. Therefore, the issues of sales markets, development of the market infrastructure and administrative burdens remain open.

In my opinion, the activity of regulatory and supervisory authorities should be rated not by the sum of collected fines, but by the efficiency of production.

 

- What is the role of industry associations in development of the agrarian market and the Russian Grain Union in particular?

It is difficult to estimate our role in the agrarian market, and only market participants can make an objective estimation. However, the Russian Grain Union operates on the market for more than 20 years, and the Union members produce almost half of the general production of flour and animal feed in Russia, and also provide 95% of grain exports.

We are at our own place, because our association is noncommercial, and we exist only at the expense of payments of the members. The existence and active work of our organization is recognition of the role of industry associations.

 

- What projects, activities and initiatives did the RGU realize in 2016?

We prepared working papers, proposals and expert opinion on the draft strategy for development of the grain complex in Russia to improve the current insurance system. There is an idea to found the mutual insurance society.

We continued our work on certifying of the services of bakery products companies. Within frames of certification, we provided the companies with the necessary information support to maintain and improve the material and technical basis for acceptance, placement, storage and shipment of grains, rational organization of technological processes in the operation with grains, etc.

In addition, we provided many seminars and conferences about grain market work.

 

Message to the market participants.

I can wish only one thing to all members of the market — good business and health! And one should remember - in unity there is strength!

 

Interviewed by Polina Kalaida, APK-Inform Agency

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