The Russian government has approved a 1 billion Rouble (US$?15 million) subsidy to the poultry industry to halt the unprecedented drop in production.
At the same time it considers freezing retail price levels to halt the upward price rally on the domestic market due to imbalanced supply and demand. As explained by Russian Prime Minister Mikhail Mishustin, the funds were allocated to both poultry farmers and processors. “The companies got the approval for bigger loans a lower interest rates,” Mishustin explained. The government intervention is needed to balance supply and demand on the market and is expected to contribute to price stabilization on goods with high social importance, Mishustin added.
The General Director of the National Union of Poultry Breeders, Sergey Lakhtyukhov, told Russian magazine Agroinvestor that in the current situation, support is crucial for the poultry industry. “According to the information of the government, this measure will positively influence the limit on subsidised short-term loans and the prolongation of investment loans,” Lakhtyukhov said, adding that the government is mulling some additional measures aimed at helping the industry. To some extent, the upcoming state support is expected to be focused on the breeding base of the Russian poultry industry, Lakhtyukhov added. The government responds to the negative production dynamics in the industry. In the first quarter of 2021, broiler meat production in Russia dropped by 5.3% compared to the same period of the previous year. This is believed to be the strongest decline in the past decade.
In the meantime, the Russian Agricultural Ministry has disclosed that the government is considering introducing price caps for broiler meat and eggs on the domestic market. “The government can set maximum retail prices for poultry and eggs,” the deputy head of the Agricultural Ministry Oksana Lut said, adding that over the past 60 days in most regions of Russia, the average price in this product category rose by more than 10%.
Russia sees strongest poultry production decline in a decade
In the first 2 months of 2021, Russian poultry production dropped by 6.2% compared to the same period of the previous year. Find out more…
This fact has given the government the right to set maximum retail prices for these products, she said. The Russian state statistical service Rosstat estimated that the price for broiler meat in Russia increased 14.6%, and the price for eggs by 9% since the beginning of the year. In March of 2021, the government urged the biggest producers to freeze the price for broiler meat on the domestic market for 3 weeks. However, this agreement brought only a temporary price relief to the market.