The Russians did it! The agricultural sector of the Far East is growing, despite the absence of the Chinese

Contrary to all predictions that the withdrawal of the Chinese from the Far Eastern region due to the pandemic, agriculture there will decline, this is not happening, writes Ivan Zuyenko, a researcher at the Center for Asia-Pacific Studies of the Far Eastern Branch of the Russian Academy of Sciences, on the website of the Carnegie Moscow Center.

Moreover, the role of Chinese workers in the agricultural sector of the Far East has already been falling for several years along with the fall of the ruble, and the pandemic has only accelerated the process. It seemed back in the spring that there would be no one to work in the fields, but the shortage of personnel was compensated by local resources. The only serious problem that remains is not the number of employees, but their poor qualifications to manage the new equipment. As a result, the outgoing year was the first since the late 1980s when the vast majority of Russians worked in the fields of the region.

It is clear that it was easier with seasonal Chinese workers: they had to be paid only during the season, and there was no need to build housing - they settled in barracks right next to the fields, and they worked beyond the norm without problems. So now we have to adapt to new conditions, supporting the local labor market.

Moreover, small Chinese enterprises, whose competitive advantage was in effective work with compatriots, also left, and their place is taken by Russian ones, from individual farmers to large companies. And the current price situation for grain and legumes encourages many to invest in the Far Eastern lands: their prices are growing much faster than their cost. The main culture of the region - soybeans from 15 thousand rubles per ton in 2016 has risen in price to 38-43 thousand rubles this year. And the depreciation of the ruble against the dollar is also a help. And the main thing in this business is the proximity to the Chinese market, which consumes more than 100 million tons of soybeans annually, and produces no more than 20 million tons.

Of course, the proximity of China is important, but in the long term, this factor can play the role of a bottleneck that does not allow increasing the volume of exports. The low throughput of land border crossings and the location of the main soybean processing plants in China, in the south of this country, play a role here, which greatly complicates the development of exports. This obstacle, as well as resellers, can be bypassed only with the help of sea supplies, which is now beginning to develop within the framework of the "Plan to deepen cooperation between Russia and China in the field of soybeans".

Another positive trend in the region is that China's corn imports are also growing, reaching record levels this year. And if the trend continues, then our country may squeeze in this area so far the leading suppliers of corn to China - the United States and Ukraine.

The rapid development of soybean exports to China also has a negative side: since the entire crop is sold, the processing sector of this raw material does not develop. The situation is roughly the same as in the timber industry, where the benefit from the sale of round timber to China, for example, significantly outweighs the costly and not always effective processing.

What are the prospects? - the expert asks. And he answers like this:

“...A promising direction of Far Eastern crop production is to increase the protein content in soybeans with the help of modern agricultural technologies and enter a more attractive market niche - to sell soybeans not for processing into oil and compound feed, where our products compete with cheaper genetically modified ones, but for food purposes. This will increase added value, even while remaining solely a source of raw materials.

Another direction is getting out of the soybean gold trap. Bearing in mind the analogies with the timber industry, far-sighted producers should also think about processing, no matter how unattractive it may seem under the current conditions...

From the point of view of diversifying production, experiments with the transfer of land to corn are already paying off. An expensive but very promising venture is the restoration of a large-scale rice-growing system built in the Soviet years with an eye to rice production using advanced Chinese technologies. The climate and soils in southern Primorye differ little from those in the border counties of the Chinese provinces, and the local rice is considered one of the best in China.

So the future belongs to diversification and increasing the added value of products. Both require large financial reserves and long-term work. Despite years of talk about the dependence of the Far Eastern economy on Chinese capital and labor, all this was found in Russia itself. True, this was done thanks to the integration into the world market, the availability of foreign equipment and technologies, and also, let's be honest, at the cost of securing the status of a raw material producer..."