Farmers do not have enough capacity to store potatoes

The expected high potato harvest this season at a total level of almost 20 million tons and the rising cost of imported equipment forced producers to turn to the authorities for additional help to increase the capacity of vegetable storage facilities. The Ministry of Agriculture considers the existing capacities sufficient. However, market participants note that officials rely in their assessments, among other things, on data from private farms, which can store crops for no longer than two months.

Kommersant obtained a letter dated September 7 from the Potato Union to the Ministry of Agriculture with a request to provide support for the creation of additional crop storage capacity.

With a projected record potato harvest for this season of 8 million tons from agricultural holdings, which is 800 thousand tons more than in 2022, there will not be enough capacity to store 300-400 thousand tons of harvested tubers, the letter says. The collection from private farms could amount to another 12 million tons, adds Tamara Reshetnikova, general director of Growth Technologies. The letter does not specify the required amount of assistance; the Kommersant union itself also did not name it.

To free up already filled storage facilities, farmers need to sell up to 1.5 million tons of potatoes before the end of harvesting, which, as the Potato Union points out, forces farms to “get rid of surpluses at lower prices.” This problem is relevant for producers not only of potatoes, but also of other vegetables, says a Kommersant source in the market. According to Rosstat, in 2022, 13.5 million tons of open and protected ground vegetables were harvested in the Russian Federation.

Kommersant’s interlocutor emphasizes that it is mainly small farms that face a shortage of storage facilities and the development of a warehouse base will allow them to “increase the shelf life of products in the off-season.” This situation does not allow stocks to be evenly distributed throughout the year, as a result of which there is less stock in storage during the off-season, which affects retail prices, adds another Kommersant source in the market. Requests sent to Kommersant to the farms remained unanswered.

Farmers periodically request financial support to create additional storage capacity. The Ministry of Agriculture told Kommersant that various state support measures are already in place and further implementation of investment projects for the construction and modernization of storage facilities for potatoes and vegetables is planned. Referring to regional data, the ministry emphasized that there is enough capacity, taking into account the projected production of open-ground vegetables. As of July 1, 2023, their current capacity allows for the simultaneous storage of 8.8 million tons of vegetables and potatoes, which is 10.8 thousand tons more than in January of the same year, the ministry says, and by December 2025 the total capacity should reach 9.3 million tons, by 2026 it is planned to introduce another 521.2 thousand tons.

The Ministry of Agriculture uses data not only from large agricultural holdings, but also from private farms, whose capacity allows storing potatoes for no more than two months, explains Tamara Reshetnikova. According to her, in underground storage facilities of agricultural holdings, vegetables are stored until the New Year; for longer storage in new hangar-type facilities, refrigeration units or gas environment regulators are needed – this is expensive equipment, which is equipped with approximately half of the existing facilities.

The production of this equipment has been established in the Russian Federation since 2015, but components are imported, which is expensive at the current exchange rate, notes Ms. Reshetnikova. Supplies from the EU have recently risen in price by 20% on average, and some have risen in price by 50% or have become unavailable at all, confirms Roman Nuriev, commercial director of Interagro (a supplier of equipment for the food industry), adding that now we have to partially reorient ourselves to purchases from Belarus and China.

According to Mr. Nuriev, about a third of vegetable storage facilities are not equipped with new energy-saving systems. In this case, according to Tamara Reshetnikova, it would be logical to provide farmers with subsidies for electricity costs, similar to industrial greenhouses that receive them in winter.

Ekaterina Rakitina