Food industry in Russia: development and problems

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

A person has one need, which always and in any conditions needs to be satisfied. Whoever you are, whatever social position you occupy, you cannot do without good, good-quality food. It is not surprising that for a long time the food industry in one form or another has been the backbone of the economy of many states.

Our country is no exception. It must be said that the food industry in Russia has always been quite developed, since our state has almost always been an agricultural power. The resulting raw materials had to be processed for subsequent storage or sale, so that the corresponding branch of the national economy developed rapidly. In addition, Russia practically did not have a single peaceful century, so it was necessary to constantly take care of supplying the army with quality food.

Historical Brief

The Russian food industry received the first blow duringWorld War I, and the gloomy time of the Civil War finally knocked it down. In comparison with 1900, food production fell five times at once. However, by 1927 the industry had almost completely recovered to its previous level, but it was unable to satisfy the needs of the young country.

The industrialization of the state, the sharp increase in construction and the expansion of production in all corners of the USSR led to the need for a radical revision of the food industry that had existed until then. The relevance of this was the higher, the more high-quality raw materials began to give collectivized agricultural cooperatives and collective farms. Approximately in the same years, statistical departments derived the average figures for the needs of people of various professions in nutrients and certain categories of products.

During the Patriotic War of 1941-45, almost the entire food industry of Russia, located in the central parts of the state, was again destroyed. The situation was saved only by the timely evacuation of most of the enterprises to the East. By the way, it is thanks to this circumstance that Kazakhstan today has an advanced food industry in that region.

It should be noted that the day of the food industry in Russia, which is celebrated on October 19, is largely created in memory of the heroic work of industry workers who ensured continuous supplies of food to the rear and to the front.

Post-war issues

After five years, many sectors of the national economy, including the food industry, were restored to their previous, pre-war level. But we have already said that even before the industry could no longer satisfy the increased needs of a rapidly growing and developing country. In fact, the situation was even worse. The fact is that the population of rural areas was fed almost exclusively by the products that were grown in the garden. People practically did not buy industrial products.

At that time, the country urgently needed as many workers as possible. The natural "candidates" for their role were just the same peasants. But it was impossible to transport them to cities, since in this case the number of people who consumed food could rapidly increase. Of course, this situation could lead to starvation. It was necessary to urgently reorient the industry to new standards. Invaluable assistance in this was provided by the main institutions of the food industry in Russia (Moscow, Kuban), whose specialists developed many programs for re-equipping the industry.

Unfortunately, the local approach to solving this problem was completely wrong. Collective farmers were forbidden to keep livestock in personal farmsteads, or their number was legally limited. It was assumed that in this case, labor productivity would increase significantly. Of course, to achieve this goal, production output standards were constantly raised. As for crop production, in order to increase the grain harvest, the authorities decidedstart plowing black soil in Kazakhstan.

It was here that it turned out that there is a chronic shortage of qualified specialists for the normal exploitation of plowed lands. In fact, it turned out that only 40% of the entire cultivated area could be used in accordance with agricultural standards. Because of this, soil fertility quickly fell, which, in the end, led to the need to purchase grain from abroad.

Restructuring

By the beginning of the 90s, the Russian food industry was far from being in the best condition. Due to the legendary mismanagement, the national economy lost up to 40% of finished products and valuable raw materials. In the period from 1970 to 1986, the medical and physiological supply of many professions was constantly declining. In fact, only representatives of the party elite, the military, sailors, pilots and astronauts ate normally in this regard.

At the beginning of 1991, the needs of the population in vegetables, bread and pasta were covered by approximately 80-90%. As for sugar, lard, meat, milk and poultry, this figure was hardly 55-60% at best. Who is not familiar with queues for “scarce” products that have become one of the signs of the late USSR? All the institutions of the food industry in Russia in those years experienced a catastrophic shortage of personnel, the level of training of their specialists was rapidly declining.

After 1991, a rapid decline in overall production began. Some sectors of the food industry have reduced the volumeoutput by 60%. The state of the market was rapidly deteriorating also due to the fact that potential buyers simply did not have the funds to buy products of domestic manufacturers. All this happened against the backdrop of a powerful flow of cheap imported goods that poured like a river through the opened borders. Each food industry production in Russia in those years was simply forced to resort to unprofitable dumping, designed to maintain at least some interest of buyers in their products.

The state of the technical component of the industry

By the beginning of the 90s, everything was very sad in this area. Physically, much of the equipment is already half obsolete, and as for the moral "wear and tear", it was completely outrageous. The growing technological backwardness and financial instability of the economy further exacerbated the already far from the most brilliant position of the domestic food industry.

As a result, Russian production was unable to provide its own population with food. The situation was all the more serious, the more often the sanitary and epidemiological services revealed the complete non-compliance of many imported goods with even the most basic standards. Legs with salmonellosis are far from the worst of what was found then. Naturally, the Russian food industry itself received raw materials of this quality. 2014 is much better in this regard, our sanitary and epidemiological control bodies are working much more intensively.

Components of the food industry in Russia

One of the main pillarsThis industry in our country (and throughout the world) is animal husbandry. We will discuss it now. This branch of the national economy provides at least 60% of the valuable raw materials from which domestic food products are produced. Alas, there are few regions in Russia in which nature allows you to breed beef cattle. One of them is the Caucasus. The social situation there is such that the (relative) recovery of the industry has become possible only in recent years.

Accordingly, all the last time at least 60% of the needs of the country's population in the same beef was covered exclusively by imports, because of which the Russian food industry suffers. 2014 was marked by the introduction of Western sanctions. Oddly enough, but it is the latter circumstance that allows us to hope for the prudence of the authorities, which, perhaps, will nevertheless pay attention to their own producers.

Cattle breeding

In our country, developed in two directions: meat and dairy and dairy cattle breeding. It is developed only in the European part of Russia, where the climate and forage base make production quite profitable.

Domestic dairy products in recent years are of fairly high quality. The problem lies in the small amount of subsidies that the state directs to support the industry. Theoretically, this is due to our country's accession to the WTO, but this fact does not prevent Germany and France from supporting their own farmers. Today, a paradoxical situation has developed: despite the fact thatthat the country is able to provide at least 89% of the demand for dairy products on its own, we continue to purchase it abroad.

Because of this, the Russian food industry is suffering greatly. The report of industry experts for the past year shows that the country is able to reach a completely independent supply of milk in five to seven years. Instead, domestic producers are again left without government orders and funding.

As for beef, the situation is even worse. The fact is that in our country there is practically no dairy cattle breeding as such. All meat of domestic origin that appears on the shelves of our stores is from dairy cattle. It has such low nutritional characteristics that in the food industry this raw material is used exclusively as an additive to pork. It is impossible to organize the production of full-fledged steaks or sausages from it, but these products could contribute to a significant increase in the income of Russian food producers.

Pig breeding

Based on the foregoing, we can conclude that at least 2/3 of the total demand for raw meat is covered by pig breeding. Domestic products from it are of excellent quality and are always in high demand among consumers. The problem is that pork is a rather expensive product, since large subsidies for the construction of large pig-breeding complexes are needed to obtain it. The reality is that the stateis in no hurry to invest in them, preferring to finance foreign manufacturers. Russia's own food and processing industry is currently experiencing a chronic lack of funds.

Food industries in Russia

And now let's look at the main branches of the food industry in Russia. The principle of placing processing enterprises on the territory of the country is based on two factors at once: raw materials and consumer. In most cases, when building new enterprises, they are guided precisely by the availability of raw materials, since a lot of them are required for the production of food products. When transporting more or less long distances, huge costs are required to ensure its safety, and therefore production under such conditions becomes simply unprofitable.

Depending on the combination of all these factors, experts distinguish three branches of the food industry that are common in Russia:

• The production of milk, starch and molasses, sugar and vegetable oil, canned vegetables gravitates to the sources of raw materials. For example, we have sugar production only in the Caucasus and Central Black Earth regions, since it is simply unprofitable and stupid to transport somewhere hundreds of thousands of tons of raw materials, from which only a few tens of tons of finished products come out. The largest enterprises of the Russian food industry (ASTON, Yug Rusi), which produce vegetable oil, are also located there.
• On the contrary, bakery productionindustries can be found throughout the country. This allows it to be attributed to the consumer food industry. Grain is relatively easy to transport, the yield of finished products from raw materials is quite large.
• Mixed industries: flour and meat. Primary processing of raw materials is carried out in close proximity to the places of its production, and then the semi-finished products are sent to the places of their final processing. A perfect example is a fish. Its freezing is carried out on fishing trawlers. S alted herring, for example, is produced even in Udmurtia, from which the nearest sea is more than one thousand kilometers away.

Other industry features

In general, the domestic food industry includes hundreds of production cycles that are highly complex. The most important are the basic varieties. Their products are primary raw materials for more complex industries. These industries include: the flour milling industry, the production of raw sugar, the production of milk with its subsequent cooling.

All Russian food industry enterprises specializing in fish production or livestock slaughter can also be counted among them. But here we already have to make distinctions between industries: the same beef can be immediately sent to store shelves, or it can be used for the production of sausages, meat bread, etc. It is the latter processes that are considered the most important, since the products obtained as a result of their implementation bring the lion's share of the profits to the manufacturer.

Important production features

Foodindustry in our country alone satisfies the needs of millions of consumers. This is due to the huge variety of companies, some of which have been on the market for more than a hundred years (Nestle, for example). The peculiarity of this industry is that you need to constantly find some new tastes and forms of release, as the interest of consumers needs to be maintained. It is for the latter reason that the modern food industry is interested in inventing new containers and ways of designing them.

To put it simply, the food industry not only in our country, but also abroad, employs thousands of people involved in the production of glass, paper, plastic and metal packaging. In many ways, this also determines the raw material nature of the location of the industry's enterprises: it is better to bottle the same beer in the immediate vicinity of the factories that produce plastic and glass bottles. Carrying them across half the country is costly.

The main costs of the food industry

If we talk about the profitability of this kind of production, then Russian food industry enterprises incur considerable costs due to the need to purchase modern packaging lines and machines, the prices of which are not particularly democratic. The cost of professional packaging design is very high. Add to this payments to designers, marketers, certification costs and promotion of their products. Thus, the modern food industry is a very, very costly industry.

Basicproblems of the food industry in our country

In general, we have already talked about many of them. Thus, the development of the food industry in Russia is greatly complicated due to the almost complete lack of state support for the industry. There are a lot of expenses for setting up production (see above), even more taxes, and there is no real interest of the first persons of the state in ensuring the country's own self-sufficiency.

Don't forget that there are several major players in the industry that control the food market almost all over the world. Everyone knows these companies: Nestle, Coca-Cola, Unilever and others. So, almost all carbonated water is produced at factories whose shares are owned by Coca-Cola. The same is true for chocolate: even by buying domestic chocolates, you are sponsoring the Swiss Nestlé.

Of course, these Russian food industry companies are profitable in a certain sense, as they pay considerable taxes to the federal budget. The other side of the coin is that the domestic production of carbonated water alone is almost completely killed, since it is simply unrealistic for small companies to compete with such “whales” of the global industry. Here are the main problems of the Russian food industry.