The Main Theses of the Joint Conference of the Two Largest Associations in the Russian Agricultural Machinery Market

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On 29thof October, 2013 a conference of the two largest associations of Russian agricultural machinery market, Rosagromash and ACXOD, took place in Moscow.

Russian association of agricultural machinery manufacturers Rosagromash joins companies to defend interests of domestic agricultural machinery manufacturers in the government agencies.

Association ACXOD coordinates Russian dealers, who sell and service agricultural machinery of Russian and foreign production, and also represents dealers interests in the government agencies.

In the beginning of the event conference participants put in doubt one of the Rosagromash road map main factors on development of domestic agriculture that was presented to public at Moscow Economic Forum this year in spring: sown area could be rapidly increased, because 41 million ha had been neglected since the 90s of the last century.

During analytical centers SovEcon presentation, which has been provided complex informational analytical services in the sphere of agrarian markets since 1991, there were considered and analyzed data on reduction of sowing areas under crops in various regions of Russia. That reduction was in the Volga region and Siberia, where agricultural manufacture was unprofitable or gave little return that eventually reduced to rural population outflow. To enter those neglected lands into turnover it is not enough just to provide that region by agricultural machinery, first of all it is necessary to calculate efficiency of investments after what to renew and modernize the appropriate infrastructure by government support.

At the same time according to the centers SovEcon data, favourableweather conditions and closeness to ports in the South Russia allows agrarians to get there good price for agricultural products and, as a result, to provide intensive development of agriculture there. Significant productivity increase is possible on existing sown areas in that region of Russia. Average yield of grain crops in Russia for today is 20-25 center/ha. In the same time in developed countries the index is 80 center/ha. Just after increasing of agricultural production volume at existing sawn areas in Russia, and also if there will be favourableconditions in market, high price for agricultural products and by government support there would be reason to start a planned enter of neglected lands into turnover.

In opinion of foreign producers and associations ACXOD representatives it is necessary to use advanced agricultural technologies for intensive agricultural development in Russia and for increasing of its competitiveness in the world. It is impossible without exploitation of qualitative high-technology agricultural machinery, import of which to the Customs Unions countries was limited in the end of 2012 by duty imposing (27.5%) on imported combines, and then instead that measure became quotes. In opinion of many market participants those measures that were entered by initiation of association Rosagromash do not conform to the World Trade Organizations rules and, as a result, limit Russian agricultural producer in buying grain combines last models and also limit development of service infrastructure for Hi-Tech agricultural machinery in Russian territory. It is impossible to rely on intensive domestic agriculture development under the system market regulation by such tools, and also it is impossible to rely on competitiveness increasing of its production in the world market.

Presidents of both associations, Konstantin Babkin(Rosagromash) and Pavel Repnikov(ACXOD), in their speeches pointed that, despite many disagreements concerned to many questions connected with development prospects of agricultural machinery market, Russian agricultural machinery engineers and dealers, who provided deliveries and after-sales support of agricultural machinery produced in Russia, USA, EU and in other countries, nevertheless had successful joint project Agrosalon, which, thanks to their efforts, was gaining authority and popularity year after year in the CIS countries.

Lieders of both associations expressed hope that, despite many disagreements, they would be able to find common interests later on to join efforts on co-operative work with government and with other bodies of power and also for interests lobbying of Russian agricultural producers, whose competitiveness and ability to pay supported development of the agricultural machinery market.

At the conference also were told work results and strategic plans on business development of enterprise with foreign investments that brightly characterized processes in domestic agricultural engineering and that deserved special attention:

Companys Eurotechnica General Manager, VadimSmirnov, presented mixed position of two opposite associations in principle questions. Company Eurotechnica is a joint production with a deep localization level; it is a subsidiary company of Amazone (Germany), the largest manufacturer of trailed and rigged agricultural equipment in the world. In the same time company Eurotechnica is an active member of the association Rosagromash.

VadimSmirnov in his speech pointed to two important facts, which helped his enterprise to rich a new level of doing business in Russia. The first: Inside the Amazone group companys Eurotechnica competitiveness increased at the expanse of low price for materials and for work force in comparison with other groups enterprises. It makes Russia attractive for manufactures placement. That is why building of new modern factory in Orel was started. It was an example of long-term solution and foreign players faith in Russian agricultural market. The second important fact is export to the CIS and Eastern Europe countries. Today the enterprise masters new models adapted for Russian and East European conditions. Even today Amazone products are supplied to Ukraine, irrespective of the fact that this state does not belongs to the Customs Union, and beginning from 2014 the enterprise plans export its products to Europe.

Agricultural machinery manufacture in Russia by Western investors for now become more attractive and success of Amazone is a good example that in Russia today there are constructed new modern dealer centers, innovative manufacturer enterprises of leading world brands, which are able to influence the domestic agriculture competitiveness increasing in the world market. It is the EU and the USA agricultural machinery producers contribution in the development not only of Russian Federation agriculture, but also in creation of powerful industrial base that would support agricultural manufacturers of the CU, the CIS and Eastern Europe countries by qualitative innovative machinery.

Agricultural Holding Harveast is one of the largest and the most system operators in agricultural market of Ukraine and it services more than 170 thousand ha of land for today. In our agricultural machinery park, which was created on tests results in our enterprises fields, there are a lot of world famous brands. Machinery of Amazone produced by a Subsidiary Enterprise of company Amazone in the Russian Federation stood hard requirements of our terms and specialists, and, besides, we got a competitive price at European quality level and appropriate after-sales maintenance. It allowed us to purchase large lot of agricultural machinery Amazone this year and to consider this manufacturer as a possible long-term partner.

DmitriySkornyakov

Director of Operations

Of Agricultural Holding Harveast, Ukraine

Translated by NataliaDragnieva

https://www.facebook.com/natalia.dragnyeva

Author: Vitaliy Mietolkin

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