This post first appeared on Russia Insider
One of the fastest growing areas of the Russian economy over the long-term is agriculture.
In July the agricultural sector grew by 8.5% year on year. August's growth rate will be even higher. Growth is being driven both by improving productivity and increasing hectarage of production.
The Federal Statistics Agency reported on Monday that the recorded weight of grains was 72.5 million tons, up an astonishing 20.1% from a year ago. This is the single most important component of the agricultural index given that Russia is a major net exporter of grains. Other segments also show a rapidly expanding agricultural sector. Dug up weight of sugar beet for example was up 30% on the year.
The growth in production comes from increasing productivity, specifically improvements in soil fertility and greater investment in seed, together with better and expanding land use and warmer temperatures. Productivity, as measured through average grain yield per hectare, was up in all regions. Rostov was most impressive with productivity up 41%.
Interestingly, Crimea also saw a very large increase in production with a total grain yield of 1.1 million tons, up 83% year on year.
Russia's ban on western food imports by giving space to domestic producers will further stimulate growth in this sector. The effect should start to come through next summer.
This post first appeared on Russia Insider
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