Nizhny Novgorod agricultural producers to enter Russia's capital markets

The governor of the Nizhny Novgorod region Valery Shantsev checked the progress of the program to support agricultural enterprises. Due to the fact that agriculture and processing industries develop in unison in the region, it was offered to buy the market in Moscow for Nizhny Novgorod producers.

As of the results of June 2012, the Public Chamber of the Russian Federation recognized the Nizhny Novgorod region as the region with most affordable products of social importance. The food basket (it includes a loaf of bread, sugar, eggs, milk, cottage cheese, cheese, butter, beef, pork, chicken, walleye pollock, sunflower oil, potatoes, white cabbage, onion, carrot and beet) costs 2,354 rubles in Nizhny Novgorod. This is 16 percent cheaper than the average level in Russia (2,806 rubles). As for cheaper food, the Nizhny Novgorod region has overtaken traditional agricultural regions: Stavropol (2,692 rubles) and Rostov-on-Don (2,934 rubles).

The successful agricultural development in the region became possible due to the support from the Government of the Nizhny Novgorod region. Agricultural subsidies from the regional budget maintain low prices for most foodstuffs. It is a win-win situation for consumers and producers too.  They buy high-quality food at affordable prices; vendors are not ashamed of their goods. For example, the cost of an investment project at dairy plant "Knyagininskoe Moloko" made up 510 million rubles, including 338 million of borrowed funds.

"We are very seriously engaged in the modernization, technical re-equipment of agriculture and processing industry. Knyagininsky milk factory has never been reconstructed since 1971. Just think of how far the production lags behind world trends and canons of quality. I am very happy that such a large project is being implemented," said Shantsev.

According to the regional Ministry of Agriculture and Food, 90 percent of the milk produced in the region, corresponds to European standards.

"This project will be repaid in eight years, and it will happen only due to the fact that the government of the region subsidizing an interest rate on the loan for us. The compensation totals 120 million rubles. This is a huge amount - without the support from the government we would not be able to even start the project. The new production will be fully automated. We plan to double the capacity of the factory and to proceed from the production of milk powder to whole milk. The company will enter the retail market, the revenues will stabilize," Sergei Volkov, the commercial director of the factory "Knyagininskoe Moloko" said.

Having noted that agriculture and processing industries of the Nizhny Novgorod region develop in unison, the governor said: "There is even a proposal to buy the market for Nizhny Novgorod producers in Moscow. 40,000 tons of food are sold in Moscow daily. The region is self-sufficient on many types of food such as flour, potatoes and vegetables. As for milk - we've reached 88 percent. Therefore, in order to develop our economy, we must go to the markets of St. Petersburg and Moscow."

Major financial contributions from the budget of the region are focused on supporting the livestock industry. Construction, reconstruction and modernization of 289 livestock facilities in more than 200 settlements have been provided during the last two years. Generally, the financial support for agriculture from the regional budget has grown by 5.5 times over the past seven years - from 700 million rubles in 2005 to four billion in 2012.

"We have long ceased to give money for nothing. Each farm must submit its business plan for development. Based on the plan, we subsidize two extra rubles per every liter of milk in the case of reconstruction of a livestock facility. Three extra rubles are subsidized if the manufacturer starts a new construction. With this approach, we seriously increased the number of cattle in the region.

Today, our main goal is to give people jobs with good working conditions, high productivity and decent wages. Then they will be able to solve their problems and meet their needs themselves. We have not accomplished this yet, so our goal is to create at least 600,000 high paying jobs in the region by 2020," Shantsev said.