ATTRACTING PRIVATE INVESTMENTS IN THE AGRO-INDUSTRIAL COMPLEX WILL BENEFIT COMPETITION
The share of private companies on the market of livestock breeding and seed production as well as the share of independent laboratories participating in studies for issuing veterinary accompanying documents will reach 20%1
Preparing for the meeting of the State Council of the Russian Federation on 5 April 2018, FAS held a poll of the RF subjects finding to what extent it is possible to achieve at the regional level the key indicators for competition development – the share of private companies across economic segments.
The questionnaire included a list of 45 segments of the economy and types of activity. As a result, 13 priority sectors of the economy were identified, for which the authorities should intensify the efforts towards competition development in line with the Order of the President of the Russian Federation2.
One of such sectors is the agro-industrial complex. According to the Report on priority areas of the work of the subjects of the Russian Federation on supporting competition in Russia, presented at the meeting of the State Council, by 1 January 2022 the following targets should be reached in agro-industrial complex 3:
the market of laboratory research for issuing veterinary accompanying documents – 20%; the market of livestock breeding – 20%; and the market of seed production for the main agricultural crops – wheat, corn, sunflower, beetroot, – 20%.
Why have these key targets been selected?
The market of laboratory research for issuing veterinary accompanying documents
Under the previous legislation on veterinary, laboratory research for the purposes of drawing up veterinary accompanying documents were carried out mostly by the entities subordinate to the veterinary services in the subjects of the Russian Federation.
The amendments to the normative legal acts4 provide for a possibility of performing the above research by independent laboratories or testing centers. Thus, the grounds emerge to increase the share of private companies on the market of services of laboratory testing.
The market of seed production for the main agricultural crops – wheat, corn, sunflower, beetroot
One of the expected results of implementing the National Competition Development Plan in the agro-industrial complex – reducing dependence of the domestic market from foreign selection and genetic materials and related agro-technological solutions.
Development of modern private seed-production farms is an important factor for commercializing new sorts of hybrids developed by Russian breeders.
The share of state and municipal companies on the market is quite high, including entities operating on the basis of state breeding centers within the system of the Federal Research Institutions Agency.
The market of livestock breeding
The market of livestock breeding also has predominantly state unitary enterprises or shareholding companies; the state share in the person of the subjects of the Russian Federation exceeds 50%.
The subjects of the Russian Federation possess a number of mechanisms that can stimulate private investments in developing seed-production and live stock breeding farms, particularly, through privatizing facilities, providing state support to stimulate production and sales of seed and live-stock material, produced using Russian breeding material under the frame of the state programmes in the field of agriculture support.
Deputy Head of FAS Andrey Tsyganov said: “Attracting private investments in seed production and live-stock breeding will facilitate development of competition on these markets and achieving the results, determined by the Order of the President of the Russian Federation. Creating favourable conditions for developing competition, particular, increasing the share of private companies in the overall market, must be ensured by coordinated teamwork of the federal executive bodies, the authorities of the subjects of the Russian Federation, research organizations and businessmen”.
1 Under the National Competition Development Plan
2 No.618 Order of the President of the Russian Federation Vladimir Putin “On the basic directions of the state policy towards developing competition” of 21 December 2017
3 FAS determined the minimum share of private companies in the sector of the economy analyzing the information received from the authorities of the subjects of the Russian Federation as well as regional and sectoral FAS units.
4 Changes to No. 243-FZ Federal Law of 13.07.2015 “On amendments to No. 4979-1 Law of the Russian Federation “On veterinary” of 14 May 1993 and No. 634 Order of the Ministry of Agriculture “On the procedure for designating laboratory testing of the goods under control (including catches of aquatic biological resources and products made of them) in order to register veterinary accompanying documents” of 14.12.2015.