News 1951 views last update:Feb 25, 2016

Russian pig farmers cannot repay loans

Russian pig farmers are currently working with negative margins and during 2013 they could not make payments on loans that were made in the last five years, Yuri Kovalev, Director General of the National Pig Farmers Union, reported.

According to the expert, the main reason for this is because of Russia entering into World Trade Organisation (WTO), following the rise of import and fall of prices.

"The effect from the Russian accession to the WTO appeared sooner than we expected - not in 2-3 years, but in 2-3 months. We believe that pig farmers currently find themselves in a very difficult situation, and need help,” he commented.

"Profitability dropped to 0%, and is now in the negative - to minus 15% on average for the whole industry. Naturally, with such a return we cannot speak about new projects, and in fact we have to think of how to avoid bankruptcy at operating farms. We can work with zero profitability, with no high debt load. In Russia currently the average farmer gets about RUB 10-15 from (US$ 0.3-0.5) per kilogram of pork, while loans still needs to be paid. However, they have nothing to return," he added.

The National Union of Pig Farmers will urge the government to allocate necessary support for the industry.

"Grain will certainly not become cheaper. The only thing we can do is to ask the state for support as in was in 2008 and 2010 – with a one-time subsidy per kilogram of body weight to compensate the rising cost of feed," said Kovalev.

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