Are there any wise investments in the Belarusian agriculture: how do people and animals survive in the countryside?

New

Are there any wise investments in the Belarusian agriculture: how do people and animals survive in the countryside?

Lukashenka would say that in the 90s there was flour left for three days, but now Belarus is able to provide for itself and even exports agricultural products worth $6.5 billion. It has record harvests of crops, and is the world's third largest oil exporter. We asked an agricultural expert to comment on these achievements. He agreed to do it anonymously:

"It was possible to increase dairy production to the current level through enormous efforts, including a financial plan. Today we produce somewhat around 7.8 million tonnes. Although the country milked 7.5 million tonnes in 1990".

After the 1990s there was a decline in dairy production, and it took 30 years to get back to the Soviet level. Although plans were more ambitious - to have 9 million tonnes of milk by 2020. It did not work out. But dairy production is profitable. Profitability here is around 20 percent. Rapeseed is also profitable - about 20 percent. But in livestock production, it’s minus 40 percent.

Agricultural expert: "In terms of profitability, lamb has the lead in loses, it’s minus 70%. If I am not mistaken, only 4 large farms in Belarus are cost-effective". 

Lukashenka has repeatedly criticised livestock breeders. He fired people for not cleaning cows on the farms in Mahilev, and in the Homel region he exposed those who slaughtered cows in bulk and sold them to Russia. But livestock keep dying vastly. According to the Belstat data, since 1995 the number of cows has decreased by 600 thousand.

Our interviewee works in a dairy farming complex and says that he sees cattle dying almost every day:

"I have already had four cows and two calves die in a week. I mean, not mine, but at my complex. It is kept quiet, and the best meat is shared among workers, while the rest is exported and sold to someone else. It doesn't go into any report".

The man says this is because the complex has poor livestock housing conditions and a lack of vets. A qualified vet visits the farm once a week or two. When a vet is not around, if they don't know how to help the cattle, they just cut its throat. To prove his point, the worker sent us photos and videos:

"They were taking the cows to the milking section and one cow was either pushed or it just fell over by itself. Anyway, iIt never got up again. We tried to lift it, but it didn’t work out. Eventually a tractor dragged it to the backyard, behind the barn. The cow was left lying there, waiting for its fate. I came next morning, the cow was no longer whole,there were just the remains of it. And the funniest and even more the saddest part was that there was just a head. Just a cow's head lying a few meters away from where the body was”. 

One of the causes of the cattle mortality is poor feeding, i.e. inadequate and insufficient nutrition. For example, last year, after a poor harvest, they accumulated one third less fodder than a year ago, and the share of grain in it decreased. The agricultural expert believes that Belarus uses the worst type of feeding - silage-concentrate feeding. And it’s already time to switch to hay-concentrate feeding.

The same problems have befallen the pig industry. During the years of Lukashenka’s rule, one million pigs were lost. A lot of stock had to be slaughtered as a result of the African swine fever in 2013, but even after that the herd was down by 400,000. The Mahilev region alone lost half of it in three years. The expert in agricultural activities told us: 

"During the same time, two pig farms were built in the Byalynichy and Slavgarod district. There are somewhat 70,000 cattle there. It would seem that they should have had a positive impact on the herd. Nevertheless, the herd has decreased even more".

The expert attributes this again to poor fodder and mismanagement. And he notes that in agriculture we can clearly see the division between the west and the east of the country. Hrodna, Brest, and Minsk oblasts are ahead in milk and meat production. The three eastern regions are among the outsiders.

In recent years, Belarus has been actively modernising and reconstructing its farms. The calculation is simple: in good conditions, a cow gives high quality milk and it can be sold for higher price. Over the last 10 years, 1,600 farms have been reconstructed. But the kind of farms, where our interviewee, a dairy farm worker, works have not yet been reached:

"There are no proper tools. After all, if anyone buys any forks or shovels, they are most often aluminium, and bend very easily. Pick up some heavier pile of straw and they may crack. There's no hot water, for example. No shower to go to after work. You can't even wash your hands. There is no soap, no antiseptic, no toilet paper, nothing".

No other sector of the economy receives as much support from the government as agriculture. It receives preferential loans, grain loans, help to pay interest on loans, the state finances the purchase of fertilisers, equipment repair and the purchase of spare parts. Diesel fuel for collective farms is not subject to excise duties.

The state bought 460 harvesters, 650 tractors and 2,500 other machines for collective farms. Back in 2011 Lukashenka admitted that during ten years, i.e. since 2000, as much as $40 billion had been invested in agriculture. Economists have calculated how much more was added up over the next ten years. As of 2021, the total monetary and resource investment in agriculture exceeded $55 billion, economist Yaraslau Ramanchuk told us. In other words, over 20 years, 80 percent of the country's last year's GDP was invested in agriculture. Lukashenka's supporters believe that the main goal he has achieved is that agriculture works and earns money for the country. His opponents say that the money was invested ineffectively. It was commented by economist Yaraslau Ramanchuk:

"According to the latest statistics for 2021, only 5% of agricultural organisations with state support were unprofitable, and if you take the ones without state support, they make 52%".

The goal was to аchieve a sales profitability of 10 percent in the agricultural sector. But only 4.7 percent was achieved. Lukashenka is proud that last year agricultural products $6.5 billion worth were sold abroad. However, exports were planned to reach 7.5 billion back in 2020. That goal has now been moved to 2025. Each year, the government determines the payments per unit of agricultural production sold. For example, for every ton of milk, meat, wool, millet, buckwheat and flax sold to processing plants, agricultural organizations receive additional payments from local budgets. The expert in agricultural activities told us this:

"I tried to find information about the export effectiveness, the last data was published somewhere in 2009, when we found out that export of milk makes about 50 million dollars loss per year".

And the main question is whether the villagers themselves benefited from this huge investment in the countryside? We studied the statistics and noticed that in 1990 agricultural salaries were at 93% of the national average. It means there was hardly any difference between rural and urban areas. Then it dropped to 62% and thanks to financial injections into the agricultural sector it reached 70% of the national average. At the end of last year, rural residents earned on average 1,075 roubles. Our interviewee worked as an economist in a successful state farm and spoke anonymously about how much they earn there:

"Milkmaids can get between 800 and 1,400 roubles approximately. Cattle breeders are also paid by the piece rate, depending on the weight gain. Their salaries range from 500 (in the worst cases), 800 to 1,200 roubles. If we are talking about a workshop, it’s somewhere between 700 to 1100 rubles. These are locksmiths, adjusters, specialists and ordinary specialists. Chief specialists earn around 1,800 rubles per month. That’s not including bonuses".

Salaries depend on the amount of milk produced, its quality and the presence of sick cows. The director can’t earn more than four average salaries of his employees. Our interviewee says that he used to get between 2,000 and 4,000 roubles.

According to another insider, his farm management has announced an increase in salaries in the near future. At the same time, the average salary in the country has exceeded 1,600 roubles. The countryside falls far short of that, even with state support. We wanted to find out whether those who work for themselves can make money on the land. Of the thousands of farmers working in Belarus, most are engaged in crop farming: growing vegetables, fruit and berries. The reason for this is that it does not require such a large investment as cattle breeding. A Belarusian farmer, Yuriy Gantsevich, told us about this:

"The cost of milk is 6.50 roubles per three litres. It is easier to sell milk, because a calf drinks 1,000 roubles in three months. And a three-month-old calf doesn't cost that much today".

It turns out that it is not profitable for a cow to have calves at all, because you lose money on milk. In order to sell the veal, they have to compete fiercely with entrepreneurs-resellers. But the hardest part is competing with chain shops, because their meat is cheaper than farm meat.

The main problem farmers face is the land issue. Ales, a former Belarusian farmer who was growing vegetables for eight years, anonymously told us about this:

"I was given land, as it was written in the order, from the improved fertile land, I was given 10 hectares for vegetables. As a result, it later turned out that, in fact, this improved land was not suitable for growing vegetables at all. Because the land composition was unsuitable neither for vegetables, nor for grain, nor for anything". 

To improve the fertility of land, it was enough to put dolomite flour into it. This is even done at the state's expense, but it took at least two years to get them to do it. Farmers can get only a bail loan, and interest rates have risen sharply, Ales says:

"I asked the chairman of a neighbouring collective farm to help with machinery. Naturally, I guaranteed payment. And do you know what he said to me: why should I help you at all? That is how our conversation ended. But then, a week later, I called him again and introduced myself as if on the recommendation of the chairman of the executive committee. But there was no recommendation at all. And the next day, even without payment, I already had a tractor ploughing my field”.

Ales says that all the state assistance a farmer can count on is that at least the authorities will not interfere with work. He says that without $15,000 to $20,000, there's no point in get into farming. He himself sold his two cars to invest the money in the land:

"If a farmer deals, say, with vegetables, and has about 50 hectares, if a year was successful, then, excluding all expenses, you can put away a net of about maybe 30-35 thousand dollars."

It turns out that on land, which in Belarus is one of the most infertile in Europe, it is possible to make money even without state support. Statistics also show that the average profitability of farmer’s sales is at least 20 percent, as opposed to less than 5 percent on collective farms. Meanwhile, it is the collective farms that have the best land. By 2025, the government will send them another 8 billion roubles in aid and more than 30 billion in loans.