Russian animal breeders concerned about reduction in genetic material imports
In the fall of this year, importers of breeding material for animal husbandry will lose state support, according to the amendments to the sectoral law adopted at the end of last year. Market participants fear that departure of such companies will lead to a decrease in the quality of the genetic material. Market participants are already holding consultations with the Ministry of Agriculture on ways to solve the problem and are considering the possibility of creating their own breeding fund.
Law “On breeding livestock”
On January 13, Deputy Minister of Agriculture Andrei Razin held a meeting with market participants, where a possible problem with the import of ox semen by livestock farms was discussed. The issue became relevant after the adoption in December 2021 of amendments to the law “On breeding livestock”, which from September 1, 2022 will deprive semen importers of state subsidies. According to these amendments, only those farms that own livestock in the Russian Federation can count on state support.
Imports account for about 40%
The Ministry of Agriculture confirmed that the issue of the status of organizations supplying foreign biomaterial for selection and breeding work is now being worked out with the industry community and the main suppliers of breeding material. Head of Streda Consulting Alexei Gruzdev estimates the volume of the Russian market of breeding material for animal husbandry at 10-11 million doses per year, while imports account for about 40%. Over the past three years, the import of such material into the country has increased by 2.5 times, the expert adds.
State Center for the Reproduction of Farm Animals
Now the market is almost equally divided by importers and JSC State Center for the Reproduction of Farm Animals (JSC GTSV). At the same time, according to market participants, the quality of Russian seed material is lower. The seed produced domestically is not divided by sex and, with uncontrolled offspring, up to 51% are bulls that are useless on dairy farms.
According to JSC GTSV, Russian-made products exceed import standards by 1.5–2 times in terms of the number of germ cells in a dose, which increases the effectiveness of insemination by an average of 20%.
Large producers prefer imported seed
Large producers prefer imported seed not only because of the high quality, but also because of the wider choice in terms of price. Thanks to the imported material, productivity has increased in the dairy industry. Moreover, Lyubov Aksenova, head of the GR & ESG department at Ekoniva Group, clarifies that now Russian producers of genetic material cannot cover the needs of the entire agribusiness, neither in terms of volumes, nor in terms of quality.
JSC GCV objects that the production base of the center and the number of breeding animals make it possible to increase production and cover the needs of the market by 100%. The Ministry of Agriculture added that “a sufficient amount of biomaterial” has now been accumulated in cryogenic storage facilities within the country.
Opinion of market players
Andrey Grigorashchenko, Vice-President for Regional Development of the Damate Group of Companies, notes that depriving importers of the status of a breeding farm will lead to the fact that the semen purchased abroad will become a “commodity” one. “This will automatically force companies to pay VAT when they buy it, whereas now the material is supplied at a preferential zero rate,” he explains. In addition, says Mr. Grigorashchenko, buyers of such seed will lose the opportunity to receive subsidies for the purchase of seed and for cows grown from it.
One of the solutions to the problems could be the development of our own breeding fund, says Andrey Neduzhko, general director of the Steppe agricultural holding. According to him, the company is working in this direction. Artem Belov, Director General of the National Union of Milk Producers (Soyuzmoloko), does not rule out that some importers will decide to localize production in the Russian Federation: the Russian market is promising, given that there is always the possibility of selling material to the CIS countries.
LAN Team Moscow