Critical Situation for Belarusian Farmers

The war in Ukraine has also seriously affected Belarusian agriculture.

Due to sanctions and public pressure in Europe, many foreign companies refused to import their products into Belarus.

For example, machinery maker Deere and fertilizer producer Bayer did so. Suppliers of seeds and fertilisers, which were not affected by the restrictions, switched to full prepayment.

How has it affected the Belarusian farmers? Will they be able to finish the sowing season and the following harvest? The correspondent of Belarusians and Market learned about it.

Prices have grown by 20-30%.

The farm Rodnik, the Shumilino district, is one of the largest private farms in Belarus. It cultivates 4,000 hectares of land, grows potatoes and other vegetables, and is engaged in seed, milk and meat production. Yuri Semyonov, the founder of the farm, says he has felt the restrictive measures rather quickly.

- Everything has gone up in price: fertiliser and crop protection products, seeds, fuel and spare parts for machinery. For example, since last year, we only had good stocks of pesticides. Everything else needs replenishment at new prices. They have grown by 20-30%.

During our conversation, the farmer was on his way to buy herbicides. The situation with them, he says, is less tense, even taking into account the withdrawal of Bayer and other European brands. Since all products are based on the same active ingredient, there is no particular difference in effectiveness.

- The situation with components for machinery is more complicated. Even MTZ tractors with high power are equipped with imported engines. I think we will have to look for parts for them in China, thankfully there is a wide range of production facilities there. But it is not clear how exactly this will affect the prices, said Yuri Semenov.

Another point is seeds. Rodnik farming enterprise buys most of its seed materials in Belarus, and used to buy maize seeds in Ukraine and France. And now there is a need to find new suppliers.

The farm manager says all required for the sowing and harvesting season 2022 can be bought in Belarus, but at much higher prices. This, in turn, affects the cost of finished products.

- Prices of socially important goods such as milk and meat are regulated by the state, that is, we have no right to increase the selling prices without additional instructions from the authorities. If nothing is done, we will be making products at a loss. And then it will immediately cause a reduction in production. In the long run, it can cause that onions, carrots, and everything produced in Belarus will disappear from the shelves of shops. Then imported products will replace domestic products. And instead of our potatoes we will be eating Egyptian or Uzbek ones. Who needs it?

To avoid this situation, changes in the chain "producer-state-consumer" are necessary, said Yuri Semenov. As soon as the authorities take real steps to support Belarusian farmers, these threats will disappear.

It is impossible to get a bank loan at a normal interest rate

Mikhail Shrub's farm in the Zhitkovichi district covers over 4,000 hectares of land. The farm specializes in crop farming (potatoes and other vegetables) and milk production. The owner of the business says he faced the problems of rising prices of imported seeds and fertilizers back in 2021 because of the problems with logistics. These, in turn, were caused by the coronavirus. Sanctions have only worsened the current situation.

- Yes, everything that needs importing will be more expensive. The price of the same meal increased by 1.5-1.7 times. Fuel is constantly becoming more expensive. Naturally, it will affect the cost of production. However, we can't even estimate the scale of changes. It will come to this when we start selling products grown in 2022.

Mikhail Shrub explains the sanctions do not directly affect agriculture. Almost all manufacturers of seeds, pesticides, and fertilizers are willing to cooperate with Belarusian farmers. However, conditions have changed.

- They switched to full pre-payment, although we used to pay suppliers at the end of the year. Because of this, we had to rearrange plans, seek funds from the current turnover in order to have enough time to sow this spring. After all, a farmer cannot do otherwise: if one does not sow now, one will have no income in autumn. For those who have not been able to find money, it is more complicated, because it is not possible to take a loan at a normal interest rate. And the favourable loans which the state has instructed the banks to allocate to farms can only be used for domestic production.

The fleet of Mikhail Shrub has imported tractors and other machines from Deere. The interlocutor says no problems have arisen with its maintenance this spring: the dealers and the farm itself still have spare parts in stock. What will happen next is still unclear.

What is the solution? Mikhail Shrub says farmers have faced a similar situation in the past. And he, as a business owner, sees only one way to change the situation: work hard and do import substitution.

- We'll take expensive oilseed meal. Since it is becoming more expensive in Europe, we need to grow it at home. And we need land for that. I ask the authorities to give us new land. And we should do the same in the whole country.

At the same time, we cannot ignore the fact that the cost of production is rising, but its marginal selling price is not. On this issue, says Mikhail Shrub, we should contact the government and the National Bank. It is important for the government to hear and understand farmers' interests and needs.

- Otherwise, the same situation will occur as several years ago with washed carrots. Then it was equated to socially important goods, and it was forbidden to raise the price. I had to stop the shop because it was not profitable for me to invest in packaging and staff salaries for washed carrots, which were sold at the price of ordinary ones. I hope that our wishes will be heard.