Meros presented an overview of the agricultural opportunities in the Russian Far East at a seminar on September 13 held by the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) and hosted at Nomura Research Institute. Japanese industry players and government authorities are watching Russian Far East development closely and over 40 participants from Japanese corporations, investment firms and think tanks attended the event.

With dramatic ongoing depopulation in the region – population is projected to decline by over 30% in next 30 years – the Russian government has been implementing various measures to attract people and industry to the region and to increase economic development. These measures have included establishing fourteen Territories of Advanced Development (ToR) sites where the federal government have put particular effort into helping local governments attract foreign direct investments (FDI) through numerous schemes, as well as granting one hectare of land for free to Russian citizens who can utilize the land.

Due to the stagnating prices of oil and other energy resources, the importance of the agricultural, forestry and fishery sectors in the regional economy is rising. The share of agriculture and forestry in gross regional production of the Russian Far East increased from 3.4% in 2010 to 4.8% in 2014. Moreover, the Russian government has placed an import ban on many agricultural products from countries including the US, the EU, New Zealand and Australia as a counter measure against economic sanctions. This has all led to the new Russian policy of aiming for complete food self-sufficiency by 2020. Thus, agriculture is one of the key sectors emphasized by the Russian government in their regional development plans.

Because of the geopolitical importance of the Far East region for Japan, the Japanese government also considers Japanese involvement in regional development to be important. For this reason, the Japanese and Russian governments have agreed to have a series of agricultural vice-ministerial dialogues in 2016, and the first dialogue was held June 19, 2017. This year MAFF has also organized the Russian Far East Agriculture, Forestry and Fishery Platform to exchange information with the Japanese private sector as well as to facilitate private investments in the region. The Platform’s first meeting was in Feb 2017.

Meros sees various opportunities in the Russian Far East, in terms of import substitution as well as future export potential of certain Russian agricultural products. Oilseeds (soybean), grain, livestock and vegetable industries are already attracting various investors.

However, successful business development in the Russian Far East also faces serious challenges, including an unpredictable political climate, extremely high distribution costs, labor scarcity, difficulty in long-term financing and ongoing international sanctions against Russia. There are also complaints of lack of transparency or availability of information on Russian business partners or investment targets. Since the much of the current large-scale agricultural development in the Far East is strongly driven by Russian government policy and rely on government support like subsidies and tax exemptions, potential opportunities must be evaluated within the full context of the economic and political environment.

The Far East agricultural industries also face domestic risks such as difficulty in livestock disease control, possible wheat export taxes and competition with Chinese products, along with the most critical challenge – the small and increasingly shrinking regional market. Therefore, export market development is expected to be an unavoidable.

Some opportunities that appear particularly bright, based on the current supply and demand situation, include:


Soybean production in the Russian Far East was around 1.5 million mt in 2016, which accounted for more than 40% of the total production in Russia. Since Russia does not have enough soybean and other protein feed ingredient domestic production, to expand Far East soybean production was one of the ag-policy agenda. The Amur region established a “Soybean Cluster” and has expanded production and processing rapidly. Major oil mills in the Far East region include Rusagro, Amuragrostsentr and ANK holdings. Amuragrostsentr is currently planning to develop an isolated soy protein factory in the Soybean Cluster with a Chinese co-investor.

The Russian government had been providing a 50% subsidy for soybean transportation from the Far East to European Russia in order to increase soybean self-sufficiency. After Russia’s WTO accession in 2012, the export tax (20%) on soybeans was eliminated, and export opportunities become a reality. Although it is unclear if transportation subsidies from the Far East to European Russia are still in effect, non-GM soybean exports to Asian countries could expand under the current circumstances, which include favorable exchange rates.

Soybean meal production also has exceeded regional feed demand, which also indicates the potential to increase export of soybean meal or other vegetable protein products.


Livestock is another area attracting investment, especially swine production. Current regional production supplies only 26% of the regional demand. Chicken accounts for 36% of meat production; pork is 32%; beef is 24%. Only swine production has been gradually increasing over the last five years, which will be doubled or tripled within another 2-3 years with investments from Mercy Trade, Rusagro and Skifagro. Although the region is struggling to control diseases, like African swine fever and avian flu several meat processing companies have received approval to export heat-treated products to Japan.


Vegetable production is another industry expected to expand. Regional vegetable production currently supplies only 46% of regional demand.

The Russian government reimburses 20% of the cost to buy and set up greenhouses, under its overall policy to increase self-sufficiency by 2020. With such government support, it is planned to expand 350 ha greenhouse area in Russia, which is 15% increase from the current greenhouse area of 2,300 ha in 2016. There are various plans on investments in Far East too, and Meros estimates these will add another 40 ha of greenhouse area within the next few years if these current plans materialize.