FAS ANALYSED THE STATE OF COMPETITION ON THE MARKET OF SEEDING SOYBEANS

The results show significant dependence of the Russian market on import of the agricultural crop

The goal of the survey¹ is to analyze dependence of the domestic market on supplies of foreign-developed seed material to the Russian Federation.

FAS also established that a considerable amount of soybeans used for seeding is in the so-called “gray” zone, first of all, due to the practice of unlawful replanting of seed material within farms², and cannot be taken into account by the antimonopoly body in the survey. In view of this fact, Russian selection companies, whose intellectual rights are infringed, receive around 1 billion Rub less as royalty, in accord to some expert estimates.

Based on the revealed scope of sale of soybeans for seeding in the Russian Federation and the share of participants on this market, FAS has arrived to a conclusion that the market is highly concentrated with underdeveloped competition.

Although around 70 % soya cultivars, included in the State Register of selection achievements approved for use, are developed by Russian crop breeders, the share of foreign-developed soybeans for seeding on the domestic market reaches about 80%; particularly, around 30% are beans developed by multiplying foreign-developed seeds in Russia. It underlines a significant level of dependence of the Russian market on import of this agricultural crop and the low level of commercialization of domestic selection achievements.

The market leaders are foreign companies (in view of a group of persons) that sell foreign-developed seeds (Euralis Semences (France), Semences prograin inc. (Canada)).

According to the FAS survey, over 50% respondents named the following main factors that form market entry barriers for new companies:

- Absence of the necessary material-and-technological provision of selection work;

- Underdeveloped services of modern laboratories for genome tests;

- Lack of qualified staff in the filed of selection and seed breeding;

- Insufficient state support of selection and seed breeding.

“The aim of decreasing dependence of Russian agro-industrial complex from foreign selection and genetic material is spelt out in the Order of the President of the Russian Federation that approved the National Plan for Competition Development. Following the survey findings, FAS has proposed a number of measures designed to develop competition on this market and decrease dependence of the domestic market from foreign selection material. In our opinion, it is necessary to form a system for traceability of the turnover of seeds used for planting in the Russian market. Stimulating private investments in developing selection and seed breeding, particular, based on the principles of private-public partnership, will also encourage efficient market performance”, informed Head of FAS Department for Control over Agro-Industrial Complex, Anna Mirochinenko.

“It is essential to stimulate transfer of research projects in the field of selection and production of hybrid seed parents in Russia. It can be done through a system of subsidies, by devising criteria for localizing seeds production in the Russian Federation. Also, we should develop centers for collective use in the field of selection and support the system of higher education in order to train specialists that master modern methods of molecular and genetic selection”, added Deputy Head of FAS Andrey Tsyganov.

¹ Under 2019 - 2020 FAS Action Plan for analyzing the state of competition on the markets.

² Soya is not included in the list of plant genus and species, approved by № 643 Decree of the Government of Russia of 4 October 2007’ therefore, replanting the crop within farms is not allowed.