Agriculture and Food Industry in Russia, Ukraine, Belarus and ...

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Agriculture and Food Industry in Russia, Ukraine, Belarus and Kazakhstan Market Research Department, SCHNEIDER GROUP May 2018

Transcript of Agriculture and Food Industry in Russia, Ukraine, Belarus and ...

Agriculture and Food Industry in Russia,

Ukraine, Belarus and Kazakhstan

Market Research Department, SCHNEIDER GROUP

May 2018

Contents

Executive Summary

Chances and Opportunities

General Socio-Economic Indicators

General Socio-Economic Statistics: Food Baskets and Subsistence Minimum

Role in the National Economies

Main Agricultural Regions

Agriculture and Food Foreign Trade

Key Regulations

Appendix: Milk and Cheese Industry

accounting | ERP | import | legal | tax 2

This report is the extended version of the our analysis of the agricultural sector in Russia, Ukraine, Belarus and Kazakhstan. It

offers a special insight on the Milk and Cheese industry of the countries, detailed information on the production and

consumption, average price, imports and exports of milk products and cheese, and shares of key market players in four

countries.

We would be happy to provide you with analysis on any specific subject you are interested in.

To learn more, please contact us

Executive Summary (1)

accounting | ERP | import | legal | tax 3

Market size

Combined size of the food markets of Russia,

Ukraine, Belarus and Kazakhstan totaled

USD 294bn* in 2017.

The Russian market, with sales at

c. USD 247,6bn in 2017 or 84% of the combined

market size, is the largest.

This proportion is broadly repeated in the

allocation of population among these countries.

Imports vs. local production

Local production dominates all the markets in

value terms.

Imports are between 17% and 28% in value

terms, with a similarity of import shares in Russia

and Ukraine (17-18%) and in Belarus and

Kazakhstan (25-28%).

Fruit and meat remain the most imported

categories among agricultural goods both in value

and volume terms.

Main export shares in Russia are taken by cereals

and fish products (36,2% and 17,1%). *Devaluation of local currencies has significantly affected sales in foreign

currency terms

Relative market size by country from a total

of USD 294bn based on sales in 2017, %

Sources: National Statistical Agencies, BMI

84%

9%

4% 3%

Russia

Ukraine

Belarus

Kazakhstan

18%

17%

28%

25%

82%

83%

72%

75%

Russia

Ukraine

Belarus

Kazakhstan

Imports

Local production

Food imports vs. local production

in USD terms in 2016, %

Sources: National Statistical Agencies, Customs Services

4 accounting | ERP | import | legal | tax

Role of agriculture in the national economies

Agricultural production accounts for a significant

role in the national economies of Ukraine and

Belarus (20,6% and 22,1% of GDP). These

numbers are smaller for Russia (7,5%) and

especially Kazakhstan (3,6%). However,

Kazakhstan’s agricultural sector is among the most

promising in the world

This allocation can be partially explained by the

favorable climatic and geostrategic conditions.

Agricultural sectors in most of the countries suffer

from the lack of farming efficiency and remain

below their potential.

All agricultural markets grew over the last years

despite the difficult economic environment. The

Belarussian market has grown the most by 18,2%

on average (compared to the Russian – 7,8%).

High level of regional concentration of

agricultural output is typical for Russia.

There’s been a permanent increase in production

and consumption of fresh vegetables and low-fat

meat, which reflects the preferences and

purchasing power of the population.

Food production, % of GDP

Sources: National Statistical Agencies, IMF

Development of food sales in local currencies, %

Sources: National Statistical Agencies, BMI

7,5

20,6 22,1

3,6

Russia Ukraine Belarus Kazakhstan

11

6

31 29

9 8

22

3 5

35

12

7 5

15 15

12

9

14 11

10

Russia Ukraine Belarus Kazakhstan

2013 2014 2015 2016 2017

Executive Summary (2)

5 accounting | ERP | import | legal | tax

Average subsistence minimum, 2017

Sources: National Statistical Agencies

Executive Summary (3)

$172,2

$61,1

$158,3

$75,0

Russia Ukraine Belarus Kazakhstan

Food basket and subsistence minimum

Based on changes in economic environment

the value of consumer baskets (subsistence

minimum) and therefore food baskets is

reviewed at different time periods by the

governments and a number of regional

authorities.

Subsistence minimum is established for various

population groups. It is the highest in Russia

with more than $172 and the lowest is in

Ukraine – $61.

Russian Food Embargo

In August 2014, Russia imposed an embargo on

the import of products from the EU, the U.S. and

a number of other countries in response to the

restrictive measures applied against Russia.

Since then a significant restructuring of the

agricultural sector, including the foreign trade, in

four countries has been observed.

The agricultural legislation in all the countries is

moving towards establishment of the

comprehensible Agricultural Law. It is currently

the most complex in Ukraine (on average, 1000

regulations for the agro-industrial sector).

Milk and Cheese industry

Belarus is leading in milk and cheese production,

import and export among all four countries.

The highest prices for milk and cheese through

the years remain in Russia.

The highest per capita milk and cheese

consuming countries are Belarus and Russia.

The markets are quite concentrated. Usually,

there are 5-7 leaders controlling more than 50%

of the market.

Chances and Opportunities (1)

Russia

Russia is a major market with 146,8mn inhabitants, of which 74%

live in cities and towns and 26% live in rural areas.

77mn people are working-age (aged 15-72).

Average life expectancy at birth: 70,1 years.

According to OECD, 54% of those aged 25-64 have attained a

university degree.

12th largest economy in the world in 2017 measured by GDP in

real terms: USD 1 530bn.

6th largest economy in the world in 2017 measured by GDP based

on PPP valuation: USD 4 010bn.

GDP per capita in 2017 at current prices: USD 10 610 (and USD

27 830 based on PPP).

Annual progress in World Bank’s Ease of Doing Business 2018

ranking: 35th place in 2017 (2016: 40th).

Corruption Perceptions Index score (Transparency International):

29 in 2017 (2016: 29).

accounting | ERP | import | legal | tax 6

Significant opportunities

offered by the large

market

Sources: Russian Ministry of Finance, National Statistical

Agencies, Central Bank, UNDP, The World Bank, IMF,

Tradingeconomics.com, own estimates

Average exchange rates were used.

Indicators 2017

General govt gross debt, USD bn 266,2

General govt gross debt to GDP, % 17,4%

Consumer credit, USD bn 194

Consumer credit to GDP, % 12,7%

Human Development Index (HDI) 0,804

Unemployment, % 5,2%

2032 2170 2231

2031

1326 1283

1530

2011 2012 2013 2014 2015 2016 2017f

GDP, USD bn

Chances and Opportunities (2)

Ukraine

Ukraine is a big market with 42,5mn inhabitants, of which 70% live in

cities and towns and another 30% live in rural areas.

24mn people are working-age (aged 15-70).

Average life expectancy at birth: 72 years.

According to the Ukrainian Institute of Demographics and Sociological

Research, 76% of those aged 25-64 have attained a university

degree.

62nd largest economy in the world in 2017 measured by GDP in real

terms: USD 109,3bn.

50th largest economy in the world in 2017 measured by GDP based

on PPP valuation: USD 368,8bn.

GDP per capita in 2017 at current prices: USD 2 580 (and USD 8 710

based on PPP).

Annual progress in World Bank’s Ease of Doing Business 2018

ranking: 76th place in 2017 (2016: 80th).

Corruption Perceptions Index score (Transparency International): 30

in 2017 (2016: 29).

accounting | ERP | import | legal | tax 7

A large market with great

potential

Indicators 2017

General govt gross debt, USD bn 82,4

General govt gross debt to GDP, % 75,6%

Consumer credit, USD bn 4,3

Consumer credit to GDP, % 3,9%

Human Development Index (HDI) 0,743

Unemployment, % 9,4%

Sources: IMF, UNDP, The World Bank,

Tradingeconomics.com, own estimates

Average exchange rates were used.

163 176 181

132

91 93 109

2011 2012 2013 2014 2015 2016 2017f

GDP, USD bn

Chances and Opportunities (3)

Belarus

Belarus is a major market with 9,5mn inhabitants, of which 77% live

in cities and towns and 23% live in rural areas.

7,2mn people are working-age (aged 15-72).

Average life expectancy at birth: 74,1 years.

According to OECD, 19% of those aged 25-64 have attained a

university degree.

82nd largest economy in the world in 2017 measured by GDP in

real terms: USD 54,4bn.

74th largest economy in the world in 2017 measured by GDP

based on PPP valuation: USD 178,9bn.

GDP per capita in 2017 at current prices: USD 5 760 (and

USD 18 930 based on PPP).

Annual progress in World Bank’s Ease of Doing Business 2018

ranking: 38th place in 2017 (2016: 37th).

Corruption Perceptions Index score (Transparency International):

44 in 2017 (2016: 40).

accounting | ERP | import | legal | tax 8

Indicators 2017

General govt gross debt, USD bn 27,7

General govt gross debt to GDP, % 51%

Consumer credit, USD bn 1,3

Consumer credit to GDP, % 2,4%

Human Development Index (HDI) 0,796

Unemployment, % 1%

A bridge between the EU

and the EEU

Sources: IMF, UNDP, The World Bank,

Tradingeconomics.com, own estimates

Average exchange rates were used.

59,7 63,6

73,1 76,1

54,6 47

54,4

2011 2012 2013 2014 2015 2016 2017f

GDP, USD bn

Chances and Opportunities (4)

Kazakhstan

Kazakhstan is a major market with 18mn inhabitants, of which 53%

live in cities and towns and 47% live in rural areas.

12,8mn people are working-age (aged 15-64).

Average life expectancy at birth: 72 years.

According to the CIS Interstate Statistics Committee, 34% of those

aged 25-64 have attained a university degree.

59th largest economy in the world in 2017 measured by GDP in

real terms: USD 160,8bn.

45th largest economy in the world in 2017 measured by GDP

based on PPP valuation: USD 477,6bn.

GDP per capita in 2017 at current prices: USD 8 840 (and

USD 26 250 based on PPP).

Annual progress in World Bank’s Ease of Doing Business 2018

ranking: 36th place in 2017 (2016: 35th).

Corruption Perceptions Index score (Transparency International):

31 in 2017 (2016: 29).

accounting | ERP | import | legal | tax 9

The Central Asian tiger

Indicators 2017

General govt gross debt, USD bn 34,1

General govt gross debt to GDP, % 21,2%

Consumer credit, USD bn 13,2

Consumer credit to GDP, % 8,2%

Human Development Index (HDI) 0,794

Unemployment, % 5%

Sources: Tradingeconomics.com, IMF, UNDP,

The World Bank, own estimates

Average exchange rates were used.

200 216

244 227

184

137

161

2011 2012 2013 2014 2015 2016 2017f

GDP, USD bn

General Socio-Economic Statistics (1)

Population by Age Group

10 accounting | ERP | import | legal | tax

Russia’s population age groups, % of population Ukraine’s population age groups, % of population

Belarus’s population age groups, % of population

Sources: World Bank, UN, BMI

Sources: World Bank, UN, BMI

Sources: World Bank, UN, BMI

Kazakhstan’s population age groups, % of population

Sources: World Bank, UN, BMI

16,9% 18,4%

9,7% 10,7%

45,2% 41,6%

14,3% 12,2%

13,9% 17,2%

2016 2026

>65 years

55-64 years

25-54 years

15-24 years

0-14 years

146,6m 147m

15,5% 16,3%

10,3% 9,3%

44,5% 42,4%

13,7% 13,1%

16,1% 19,0%

2016 2026

>65 years

55-64 years

25-54 years

15-24 years

0-14 years

42,5m 42,4m

15,7% 17,7%

10,7% 10,2%

45,0% 41,4%

14,0% 13,3%

14,7% 17,4%

2016 2026

>65 years

55-64 years

25-54 years

15-24 years

0-14 years

9,6m 9,2m

25,7% 27,6%

14,7% 14,1%

42,5% 40,0%

9,8% 9,7%

7,4% 8,6%

2016 2026

>65 years

55-64 years

25-54 years

15-24 years

0-14 years

17,7m 19,4m

General Socio-Economic Statistics (2)

Russia: Food Basket and Subsistence Minimum

11 accounting | ERP | import | legal | tax

Product

Average expected consumption

per capita annually, kg

Workers Retirees Children

Bread products (bread and pasta

goods in terms of flour; flour, grains,

beans)

126,5 98,2 77,6

Potatoes 100,4 80 88,1

Vegetables and melons 114,6 98 112,5

Sugar and confectionery (in

terms of sugar) 23,8 21,2 21,8

Meat products 58,6 54 44

Fish products 18,5 16 18,6

Milk and dairy products (in

terms of milk) 290 257,8 360,7

Eggs, number 210 200 201

Vegetable oil, margarine and

other fats 11 10 5

Other products (salt, tea,

spices) 4,9 4,2 3,5

Russia’s food basket establishes the thresholds

of consumption of specific products by different

population categories. They differ from one

region to another.

It is reviewed every five years and is approved

as a Federal Law.

Russia’s food basket – federal average

Source: Federal Law 227-FZ dated 03.12.2012

The food basket is part of the consumer basket,

which also includes non-food products, utilities

and services (156 lines in total).

Based on changes in prices and the economic

environment in general, the value of the

consumer basket ("subsistence minimum") is

reviewed quarterly by the federal government

and regional authorities. It is established for the

three population groups as above. This level for

Moscow was 55% higher than for the rest of the

country in 2017.

4 000

6 000

8 000

10 000

12 000

2013 2014 2015 2016 2017

Per capita

Working age

Pensioners

Children

Russia's subsistence minimum by population

group, RUB per month

Source: National Statistical Agencies

General Socio-Economic Statistics (3)

Ukraine: Food Basket and Subsistence Minimum

12 accounting | ERP | import | legal | tax

Similarly, Ukraine’s food basket establishes the

minimum expected levels of consumption of

specific products by different population

categories.

It was last reviewed in October 2016; changes

are approved as a Government Decree.

Ukraine’s food basket – average

Source: Government Decree No. 780 dated 11.10.2016

The food basket is part of the consumer

basket, which also includes non-food products,

utilities and services (296 lines in total).

The government reviews the value of the

consumer basket ("subsistence minimum") at

least once a year. It is established for the four

population groups as above.

Until 2017, the minimum wage level was very

close to that of the subsistence level. Effective

from 1 January 2017, minimum wage was

doubled.

Ukraine's subsistence minimum by population

group, UAH per month

Source: minfin.com.ua

Product

Average expected consumption

per capita annually, kg

Able to work Non-working

population

Bread and bakery 114,4 113,2

Cereals 9 10,7

Potatoes 95 108

Vegetables (including salted

and pickled) 94 83,5

Fruit and berries 80 47,3

Sugar and confectionery 37 22,5

Vegetable oil and margarine 9,1 8,2

Meat and meat products 53 38

Fish and seafood 13 11,5

Milk and dairy products 143,5 122,3

Eggs, number 220 187,5

Tea and other hot drinks 0,9 0,83

Salt and spices 3,3 2,77

800

1 000

1 200

1 400

1 600

1 800

2013 2014 2015 2016 2017

Overall

Children under 6

Children aged 6-18

Able to work

Unable to work

250

300

350

400

Jul-16 Aug/Oct-16

Nov-16/Jan-17

Feb/Apr-17

Family of 4

Young family of 3

Working population

Retired population

Students

General Socio-Economic Statistics (4)

Belarus: Food Basket and Subsistence Minimum

13 accounting | ERP | import | legal | tax

The food basket in Belarus establishes average

expected levels of consumption of specific

products by different population categories: a

family of four, a young family of three, a

working age person, a pensioner, a student, a

child under 3, a child aged 3-6 and a child aged

6-18.

Food basket in Belarus – average

Sources: Decrees of the Ministry of Labor and Social Welfare No 107 dated 29.12.2014

and No 146 dated 14.12.2009

It is reviewed every five years, previous

revision was in 2014; changes are approved as

a Decree of the Ministry of Labor and Social

Welfare.

The food basket includes more than 100 lines.

Considering price changes, the value of the

consumer basket ("minimum consumer

budget") is reviewed by the government at least

every four months. The price level of the

previous quarter is used as a basis for

calculation.

Minimum consumer budget by select population

category in Belarus, BYR per month

Source: Ministry of Labor and Social Welfare, myfin.by

Product

Average expected consumption

per capita annually, kg

Working

population Retired population

Bread and bakery 130,3 100,4

Cereals 16,1 9,5

Potatoes 124,1 91,3

Vegetables 142,5 95,1

Fruit and fruit juices 73,8 54,8

Sugar and confectionery 43,9 28,1

Vegetable oil and margarine 8,8 6,9

Meat and meat products 60,7 43,4

Fish and seafood 15,4 9,5

Milk and dairy products 152,7 151,1

Eggs, number 270,1 160,6

Tea 0,8 0,6

Salt 3,7 2,9

General Socio-Economic Statistics (5)

Kazakhstan: Food Basket and Subsistence Minimum

14 accounting | ERP | import | legal | tax

The food basket in Kazakhstan establishes the

thresholds of consumption of specific products

by different population categories: population in

general, children aged 0-13, adolescents 14-17

(boys and girls), population able to work >18

(men and women) and pensioners.

The food basket includes more than 40 lines.

Food basket in Kazakhstan – average

Source: Joint Decree of the acting Minister of Health and Social Development No. 623

dated 27.07.2015 and acting Minister of National Economy No. 585 dated 31.07.2015

The basket was last revised in 2005. A new

revision process was launched in

December 2016. The Ministry of Labor and

Social Welfare has been responsible for the

process.

Based on changes in prices and the economic

environment in general, the value of the

consumer basket ("minimum consumer

budget") is reviewed by the government at least

every year; changes are approved in the Law

on Kazakhstan’s National Budget.

Minimum consumer budget in Kazakhstan, KZT per

month

Source: Law on Kazakhstan’s National Budget for 2017-2019 No. 26-VI dated 29.11.2016

20 000

21 000

22 000

23 000

24 000

25 000

2015 2016 2017

Product

Average expected

consumption per capita

annually, kg

Working

population

Retired

population

Bread and bakery 156,37 116,65

Cereals 19,8 15,1

Potatoes 94,1 85,3

Vegetables 99,2 76,9

Fruit and fruit juices 30,1 22,8

Sugar and confectionery 22 16,6

Vegetable oil and margarine 11,32 9,26

Meat and meat products 50,5 40,6

Fish and seafood 9 7,6

Milk and dairy products 117,3 95,2

Eggs, number 147 113

Tea 0,87 0,67

Salt and spices 2,91 2,23

Role in the National Economies (1)

Key Sector Statistics 2017

accounting | ERP | import | legal | tax 15

Russia Ukraine Belarus Kazakhstan

Agricultural employment, % of

total working population 9,2% 17,6% 9,6% 16,2%

Food production employment, %

of working population 2,6% 3,6% 3,9% 3,5%

Average salary in agriculture,

USD 322 215 249 278

Average salary in food production,

USD 426 254 380 279

Food sales, USD bn 247,6 26,3 11,1 8,9

Arable land, % of land area 7,5% 56,2% 30% 10,9%

Cattle stock, thou. heads 18 644 3 628 4 188 6 745

Annual milk output, thou. tons 31 120 10 329 7 141 5 459

Sources: National Statistical Agencies, World Bank, U.S. Department of Agriculture, UN Food and Agriculture Organization,

CLAL (Italy)

Role in the National Economies (2)

Agriculture and Food Production

16 accounting | ERP | import | legal | tax

Global perspective: GVA contribution of

agriculture in certain countries in 2016, %

Sources: World Bank

In terms of the agriculture sector’s contribution

to GVA, Russia is in the group of 15 countries

(where the share is between about 4% to 5% of

GVA).

Other major emerging economies (like China,

India and Indonesia) each display a share of

more than 8% of GVA.

Food production in Ukraine and Belarus makes

about 25% of total industrial production, which

considerably exceeds these numbers for

Russia and Kazakhstan.

The highest per capita value of produced

agricultural goods is in Belarus (1 095 USD).

4,7%

13,7%

7,9%

4,8% 5,5%

17,4%

8,6%

2,4% 3,8%

14,0%

7,0%

1,6% 1,6% 1,0%

4,2% 12%

25% 25%

9%

Russia Ukraine Belarus Kazakhstan

Food production in 2016, % of total industrial

production

Sources: National Statistical Agencies

655

450

1 095

273

Russia Ukraine Belarus Kazakhstan

Food production in 2016, USD per capita

Sources: National Statistical Agencies

Role in the National Economies (3)

Agriculture: Key Facts

High level of regional concentration of

agricultural output is typical for Russia. Central,

Southern and Volga Federal Districts account

for about 70% of agricultural production.

A large number of people in Kazakhstan and

Ukraine live in rural areas, including potential

agricultural labor force (47% and 30%

respectively).

Until now, Kazakhstan’s agricultural industry

has suffered from lack of efficiency due to poor

soil quality on one hand and lack of

mechanized farming and overuse of harmful

chemicals on the other hand. At the same time

Kazakhstan’s agricultural sector is among the

world’s most promising.

Due to lack of investment, Belarussian and

Ukrainian agricultural sectors perform far

below their potential. In Belarus it is mostly

represented by state-run collective farms and a

small number of privately run farms. In Ukraine

the government is beginning to aim at

attracting foreign investment.

17 accounting | ERP | import | legal | tax

Land category, % of total land area

Ukraine is rich in black soil which is very fertile

due to humus (special organic substance).

Along with favorable climatic conditions this

makes the country very competitive in the

world of agriculture.

The level of bureaucracy in the agricultural

sector in all four countries is still very high.

An increase can be noted in the production of a

number of agricultural segments in Russia,

Belarus and Kazakhstan since 2012, as seen

below.

Sources: World Bank, UN Data

7,5

56,2

30

10,9 13,3

71,2

42,5

80,4

Russia Ukraine Belarus Kazakhstan

Arable land Agricultural land

Role in the National Economies (4)

Production of Key Agricultural Goods

Average change in production of main crops in

2012-2017, %

Average change in production of main animal goods

in 2012-2017, %

18 accounting | ERP | import | legal | tax

-110 -80 -50 -20 10 40 70 100 130

Apples

Barley

Buckwheat

Carrots

Cereals

Corn

Oats

Potatoes

Rye

Sugar beet

Tomatoes

Fresh vegetables

Wheat

Ukraine Russia Kazakhstan Belarus

-40 -20 0 20 40 60

Eggs

Beef and Veal

Poultry

Pork

Lamb

Milk

Ukraine Russia Kazakhstan Belarus

Sources: National Statistical Agencies, UN Data, FAO Sources: National Statistical Agencies, UN Data, FAO

Role in the National Economies (5)

Food Production and Consumption

Average change in consumption of some of the

products in 2013-2017, %

Average production of sugar beet, oats and

barley in Kazakhstan rose by more than 100%.

A considerable growth in wheat (94%) and corn

(86%) production has taken place in Russia. An

average decrease of up to 70% in production of

crops is seen in Belarus and Ukraine.

Most of the animal products in all the countries

showed a growth in production. There was a

considerable increase in lamb and chicken

production in Belarus (50% and 30%

respectively) and pork in Russia (30%).

Meat consumption indicated an average drop

for pork and raise for poultry in all the countries.

A considerable increase in beef and veal

consumption (76%) is seen in Belarus.

A high rise in soybean meal production has

been observed in Russia and Ukraine and in

consumption in Kazakhstan (86%, 78% and

61% respectively).

There’s been a permanent increase in

production and consumption of fresh

vegetables in all four countries starting from

1990th, which reflects the preferences and

purchasing power of the population.

19 accounting | ERP | import | legal | tax

-70 -20 30 80

Barley

Corn

Oats

Rye

Soybean Meal

Sunflowerseed Oil

Wheat

Beef and Veal

Poultry

Pork

Ukraine Russia Kazakhstan Belarus

Sources: National Statistical Agencies, UN Data, FAO

Role in the National Economies (6)

Other Foods and Drinks

The growth in production of fish (including

canned fish) since 2012 has been seen in all

four countries. The highest growth can be

noted in Kazakhstan (15%).

Total per capita consumption of alcohol

showed a considerable growth in Belarus

(28%) and a slight increase in Russia. There

was a decrease in alcohol consumption in

Kazakhstan and Ukraine.

The highest per capita consumption of

alcohol remains in Russia (107 litres).

There was a general decrease in wine

consumption in the countries. However, in

Kazakhstan it has recently shown a constant

growth (27%) despite religious views of its

population.

A considerable growth in per capita beer

consumption is seen in Belarus in 2014-2016.

There has been a general increase in non-

alcoholic drinks consumption in all the

countries.

Hot drinks such as tea and coffee account up to

76% of all non-alcoholic drinks sales in Ukraine. 20 accounting | ERP | import | legal | tax

Beer consumption per capita, litres

Non-alcohol drinks y-o-y sales growth in

national currencies, %

52,2 50,8

58,3

73,0

70,1

29,7 27,6 27,3 26,9 26,5

54,6 52,6

51,1 49,4 49,1

68,8 70,0 68,5

68,3

67,9

2013 2014 2015 2016 2017f

Belarus Kazakhstan Ukraine Russia

22,5

12,2 15

11,4

3,5

8 12,8

10,8 8

33,8

14,4 13,6

9,3

5 5,3 8,7

2014 2015 2016 2017f

Belarus Kazakhstan Ukraine Russia

Sources: National Statistical Agencies, BMI

Main Agricultural Regions (1)

Russia, 2017

21 accounting | ERP | import | legal | tax

Region name Output,

USD bn

% of

total Poultry Meat Milk

Cereals &

Leguminous Sunflower Sugar beet Vegetables Potatoes Tomatoes

Fruit &

Berries

1 Krasnodar 7,1 7,3%

2 Rostov 5 5,1%

3 Tatarstan 4,4 4,5%

4 Belgorod 3,9 4,1%

5 Stavropol 3,5 3,6%

6 Voronezh 3,4 3,5%

7 Saratov 3 3,1%

8 Bashkortostan 2,9 3%

9 Altai 2,6 2,7%

10 Volgograd 2,5 2,6%

1 2 3 4

5

6 7 8

9

10

Region name

% of total fixed

investment in

agriculture

% of region’s

total fixed

investment

Krasnodar 4,4% 8,3%

Rostov 1,9% 5,5%

Tatarstan 2,9% 5,2%

Belgorod 2,6% 17,8%

Stavropol 3,3% 25,5%

Voronezh 5,3% 17,6%

Saratov 0,7% 4,3%

Bashkortostan 1,7% 4,5%

Altai 0,8% 11,8%

Volgograd 0,7% 3,3%

Fixed investment in agriculture

Source: National Statistical Agencies, regional websites

Icons made by Smashicons, Freepik from www.flaticon.com

Main Agricultural Regions (2)

Ukraine, 2017

22 accounting | ERP | import | legal | tax

Region name Output,

USD bn

% of

total Poultry Meat Milk

Cereals &

Leguminous Sunflower Sugar beet Vegetables Potatoes Tomatoes

Fruit &

Berries

1 Vinnytsya 0,77 8,3%

2 Dnipropetrovsk 0,57 6,1%

3 Kiev 0,55 5,9%

4 Poltava 0,54 5,8%

5 Kharkiv 0,53 5,7%

6 Khmelnitskiy 0,52 5,6%

7 Cherkasy 0,5 5,3%

8 Odesa 0,44 4,7%

9 Kherson 0,42 4,5%

10 Chernihiv 0,41 4,4%

1 2

3 4 5 6 7

8 9

10

Region name

% of total fixed

investment in

agriculture

% of region’s

total fixed

investment

Vinnytsya 6,7% 40,6%

Dnipropetrovsk 7,1% 10,9%

Kiev 8,2% 12,4%

Poltava 7,1% 23,6%

Kharkiv 6% 18,4%

Khmelnitskiy 3,6% 20,2%

Cherkasy 5,4% 42%

Odesa 5,2% 15,7%

Kherson 4,7% 51,7%

Chernihiv 4,3% 40,6%

Fixed investment in agriculture

Source: National Statistical Agencies, regional websites Icons made by Smashicons, Freepik from www.flaticon.com

Main Agricultural Regions (3)

Belarus, 2017

23 accounting | ERP | import | legal | tax

Region name Output,

USD bn

% of

total Poultry Meat Milk

Cereals &

Leguminous Flax Rape Sugar beet Vegetables Potatoes

Fruit &

Berries

1 Minsk 2,02 24,2%

2 Brest 1,58 18,9%

3 Gomel 1,35 16,2%

4 Grodno 1,34 16,0%

5 Vitebsk 1,03 12,3%

6 Mogilev 1,02 12,2%

1

2 3

4

5

6

Region name

% of total fixed

investment in

agriculture

% of region’s

total fixed

investment

Minsk 31,1% 13,2%

Brest 17,5% 18,2%

Gomel 15,2% 11,3%

Grodno 13,9% 9,1%

Vitebsk 12,7% 14,3%

Mogilev 9,7% 13,7%

Fixed investment in agriculture

Source: National Statistical Agencies, regional websites Icons made by Smashicons, Freepik from www.flaticon.com

Main Agricultural Regions (4)

Kazakhstan, 2017

24 accounting | ERP | import | legal | tax

Region name Output,

USD bn

% of

total Poultry Meat Milk

Cereals &

Leguminous Sunflower Sugar beet Vegetables Potatoes Tomatoes

Fruit &

Berries

1 Almaty 1,99 15,8%

2 South

Kazakhstan 1,6 12,7%

3 North

Kazakhstan 1,57 12,5%

4 East Kazakhstan 1,41 11,2%

5 Akmolinsk 1,17 9,3%

6 Kostanai 1,11 8,8%

7 Zhambyl 0,78 6,2%

8 Karaganda 0,76 6%

9 Aktobe 0,62 4,9%

10 Pavlodar 0,6 4,8%

1

2

3

4 5 6

7

8 9

10

Region name

% of total fixed

investment in

agriculture

% of region’s

total fixed

investment

Almaty 12,1% 8,1%

South Kazakhstan 10,8% 7,9%

North Kazakhstan 20,5% 38,2%

East Kazakhstan 5,3% 4,2%

Akmolinsk 10,1% 13,8%

Kostanai 10,8% 19%

Zhambyl 5,5% 8,2%

Karaganda 2,7% 2,7%

Aktobe 2,9% 2,3%

Pavlodar 15,7% 11,2%

Fixed investment in agriculture

Source: National Statistical Agencies, regional websites Icons made by Smashicons, Freepik from www.flaticon.com

Agriculture and Food Foreign Trade (1)

Russia

25 accounting | ERP | import | legal | tax

Russia’s agricultural and food imports and

exports, USD bn

Sources: National Statistical Agencies ,FAO, Customs Services

22,9 21,1

24,9

16,3 17,1

20,8

2015 2016 2017

Imports

Exports

34,7% 32,8% 36,2%

17,4% 17,9%

17,1%

10,5% 11,8% 11,9%

4,8% 4,0% 3,0%

2,6% 2,6% 2,4%

2,5% 2,8% 2,4%

1,3% 1,8% 2,1% 1,4% 1,3% 1,2%

24,9% 25,0% 23,8%

2015 2016 2017

Other categories

Milk and milkproducts

Meat and meatproducts

Vegetables

Soft and alchoholdrinks

Tobacco andtobacco products

Vegetable oil

Fish and fishproducts

Cereals, incl. wheat

Russia’s agricultural and food exports,

% of total revenue

16,3bn 17,1bn 20,8bn

Main export shares in Russia are taken by

cereals and fish products (36,2% and 17,1%).

Vegetable oil share in export amounts 11,9%.

Fruit and meat remain the most imported

categories among agricultural goods both in

value and volume terms. Considerable amount

of vegetables, fish, dairy products and

drinks are also imported.

Except for animal fat, cow meat and salt, a rise

in import of main products in volume terms has

been observed compared to 2016. The highest

growth is seen in the import of prepared food

(36,6%), vegetables (36,3%) and fish (3,2

times).

Sources: National Statistical Agencies ,FAO, Customs Services

Agriculture and Food Foreign Trade (2)

Russia

26 accounting | ERP | import | legal | tax

Main food imports, thou. tons

16% 17% 18% 19%

16% 14% 10% 10%

9% 8% 9% 10%

11% 9%

9% 10%

5% 7% 8%

7%

8% 8% 6%

7%

7% 6%

6% 6%

4% 5%

5% 5%

4% 5% 5%

5%

5% 5% 5% 5%

3% 5% 5% 4%

13% 12% 12% 12%

2014 2015 2016 2017

Other categories

Tobacco and tobaccoproducts

Processed vegetables, fruit,nut products

Vegetable oils

Tea & Coffee

Fish, crustaceans andmollusks

Vegetables

Oilseeds, other seeds andgrain, straw and fodder

Milk and dairy products

Soft and alcoholic drinks

Meat and meat products

Fruit

35 063 22 888 21 098

Main food and beverage imports, USD mn

13% 15% 16% 16%

10% 12%

14% 15% 6%

9%

10% 10% 12%

10%

9% 9% 7%

7%

10% 7% 8%

8%

7% 7% 5%

5%

3% 6% 7%

5% 5%

5% 5% 5%

5% 5% 7%

6% 5% 5%

19% 16% 16% 14%

2014 2015 2016 2017

Other categories

Tomato

Milk and dairyproducts

Fish and fish products

Potato

Apples

Cereals

Meat and meatproducts

Vegetable Oils

Banana

Citrus Fruit

24 863 12 683 10 590 9 520 9 985

Source: National Statistical Agencies ,FAO, Customs Services Source: National Statistical Agencies ,FAO, Customs Services

19% 16% 17% 17%

34% 33% 33% 32%

5% 5% 6% 6%

43% 46% 44% 45%

2014 2015 2016 2017

Finished food industryproducts

Animal or plant fats andoils

Plant products

Live animals andlivestock products

6% 6% 5% 6%

52% 55% 53% 52%

23% 23% 26% 26%

19% 17% 16% 16%

2014 2015 2016 2017

Finished food industryproducts

Animal or plant fats andoils

Plant products

Live animals andlivestock products

Agriculture and Food Foreign Trade (3)

Ukraine

27 accounting | ERP | import | legal | tax

Agricultural and food exports, % of total amount

Agricultural and food imports, % of total amount

16,6bn 14,6bn 15,3bn

6,1bn 3,5bn 3,9bn

There has been a slight growth both in Ukraine’s

import and export in value terms since 2014.

The main share in Ukraine’s export through the

years has been taken by plant products.

About 26% of the country’s exported products are

animal products.

Ukrainian consumers show higher preference for

domestically produced goods.

Tea and coffee industries present major

opportunities for importers.

Ukraine tends to introduce protectionist

measures towards the local meat industry.

Ukraine’s agricultural and food imports and

exports, USD bn

16,7

14,6 15,3

17,8

6,1

3,5 3,9 4,3

2014 2015 2016 2017

Exports

Imports

17,8bn

4,3bn

Source: National Statistical Agencies ,FAO, Customs Services Source: National Statistical Agencies ,FAO, Customs Services

Source: National Statistical Agencies ,FAO, Customs Services

61% 59% 64% 63%

11% 14% 13%

11% 3% 2%

1% 2%

26% 24% 21% 24%

2014 2015 2016 2017

Prepared foodstuffs,beverages and tobaccogoods

Animal or vegetable fatsand oils

Vegetable products

Live animals and animalproducts

Agriculture and Food Foreign Trade (4)

Belarus

28 accounting | ERP | import | legal | tax

Agricultural and food exports, % of total amount

Agricultural and food imports, % of total amount

Source: National Statistical Agencies

Source: National Statistical Agencies

4,2bn 5,5bn 4,4bn

19% 11% 13% 12%

34% 50% 48% 47%

4%

3% 4% 4%

44% 36% 35% 37%

2014 2015 2016 2017

Prepared foodstuffs,beverages and tobaccogoods

Animal or vegetable fatsand oils

Vegetable products

Live animals and animalproducts

4bn 4,8bn 4,4bn

An increase has recently been observed in both

import and export of Belarus in value terms.

The main share in Belarussian import and export

through the years has been taken by vegetable

products (about 50% and 60% respectively).

More than 35% of food imported to Belarus is

prepared food.

Belarus has a strong domestic agricultural

sector that continues to grow, along with

investment in industry technologies.

Belarus’ food export sector benefits from the

restrictions concerning Russian foreign trade.

4,8bn

4,8bn

Belorussian agricultural and food imports and

exports, USD bn

4,8 4,4

4,0 4,5

5,5

4,4 4,2

4,8

2014 2015 2016 2017

Imports

Exports

Source: National Statistical Agencies , FAO

Agriculture and Food Foreign Trade (5)

Kazakhstan

29 accounting | ERP | import | legal | tax

4% 4% 4% 4%

84% 85% 87% 85%

3% 3% 3% 5% 10% 9% 6% 6%

2014 2015 2016 2017

Finished food industryproducts

Animal or plant fats andoils

Plant products

Live animals andlivestock products

Agricultural and food exports, % of total amount

Agricultural and food imports, % of total amount

Source: National Statistical Agencies

1,6bn 2,2bn 1,7bn

18% 15% 15% 17%

42% 44% 44% 45%

2% 2% 2% 2%

38% 38% 38% 37%

2014 2015 2016 2017

Finished food industryproducts

Animal or plant fats andoils

Plant products

Live animals andlivestock products

1,6bn 2,5bn 1,9bn

1,9bn

1,8bn

Source: National Statistical Agencies

A growth both in import and export has been

observed in Kazakhstan in value terms since

2016.

A large share in the country’s export through

the years has been taken by plant products

(about 85%).

Prepared food products play a considerable

role in Kazakhstan’s import sector (37%).

Food preferences of Kazakhs move towards

processed and packaged food. However, the

authorities tend to support local food

processing industry by keeping higher taxes

on imports.

Kazakhstan’s agricultural and food imports and

exports, USD bn

Source: National Statistical Agencies , FAO

2,2

1,7 1,6

1,9

2,5

1,9

1,6 1,8

2014 2015 2016 2017

Exports

Imports

Agriculture and Food Foreign Trade (6)

European Union and the USA

In August 2014, Russia imposed an embargo

on the import of products from the EU, the U.S.

and a number of other countries* in response to

the restrictive measures applied against

Russia.

Since then the recession in the Russian

economy including the agriculture and food

industry has been observed. It started to

recover slightly at the end of 2016.

There has been a significant restructuring of

the import-export sector in Russia, which has

also influenced the trade relations within the

CIS.

30 accounting | ERP | import | legal | tax

European Union Trade with Russia, Imports

in USD mn

European Union Trade with Russia, Exports

in USD mn

Sources: European Commission, National Statistical Agencies

0

200

400

600

800

1 000

1 200

2013 2014 2015 2016

Live animals; animalproducts

Vegetable products

Animal or vegetablefats and oils

Foodstuffs,beverages, tobacco

0

2 000

4 000

6 000

8 000

2013 2014 2015 2016

Live animals;animal products

Vegetableproducts

Animal orvegetable fats andoilsFoodstuffs,beverages,tobacco

U.S. Trade with Russia (Jan.-Oct.), in USD mn

Source: Ministry of Economic Development of the Russian Federation

0,00

2 000,00

4 000,00

6 000,00

8 000,00

10 000,00

12 000,00

14 000,00

2016 2017

Export

Import

*Canada, Australia, Norway, Ukraine, Albania, Montenegro, Iceland, Lichtenstein

Agriculture and Food Foreign Trade (7)

Geography of Imports, Russia

Food products with the highest share of

import to Russia from outside the CIS, 2017

Food products with the highest share of import

to Russia from the CIS, 2017

31 accounting | ERP | import | legal | tax

Belarus; 98,6%

Belarus; 54,6%

Belarus; 70,2%

Belarus; 92,0%

Belarus; 70,7%

Belarus; 83,3%

Azerbajan; 30,4%

Kazakhstan; 38,7%

98,7%

56,6%

73,6%

99,7%

75,0%

87,7%

54%

62,4%

Fresh meat

Poultry

Fish dried orsalted

Milk

Butter

Cheese

Tomatoes

Melons

Brazil; 51,3%

Brazil; 90,5%

Argentina; 40,8%

Faroe Islands; 63,9%

Faroe Islands.; 39,3%

Vietnam; 30,6%

Egypt; 58,2%

China; 30,8%

Ecuador; 96,2%

Turkey; 38,1%

Israel; 45,9%

Iran; 37,5%

China; 37,9%

Turkey; 40,3%

85,7%

97,8%

93,4%

90,5%

96,1%

99,1%

79,4%

86,4%

100%

98,9%

74,3%

65,7%

65,4%

67,8%

Frozenmeat

Pork

Meatproducts

Fresh fish

Frozen fish

Fish fillet

Potatoes

Onion

Bananas

Citrus fruit

Roots

Cucumbers

Cabbage

Grapes

Sources: National Statistical Agencies, Customs Services

Sources: National Statistical Agencies, Customs Services

Agriculture and Food Foreign Trade (8)

Geography of Imports, Belarus

32 accounting | ERP | import | legal | tax

Imports to Belarus in 2012, thou. tons Belarus Exports to Russia, thou. tons

Lithuania; 68%

Poland; 22%

Norway; 92%

Russia; 87%

Poland; 59%

Poland; 55%

Netherlands; 20%

Ukraine; 28%

0 20 40 60

Beef freshor frozen

Poultry

Fresh fish

Cheese

Cabbage

Roots

Potatoes

Tomatoes

Main countries

Total

Imports to Belarus in 2017, thou. tons

Ukraine; 98,5%

Lithuania; 24%

Norway; 88%

Russia; 80%

Poland; 52%

Netherlands; 30%

Ukraine; 56%

Turkey; 57%

0 40 80 120 160 200

Beef freshor frozen

Poultry

Fresh fish

Cheese

Cabbage

Roots

Potatoes

Tomatoes

Main countries

Total

131,9

128,0

21,1

182,0

80,6

355,1

78,6

166,1

100,6

103,9

2,4

141,9

39,0

33,6

12,5

16,2

Beef freshor frozen

Poultry

Fish driedor salted

Cheese

Tomatoes

Potatoes

Cabbage

Roots

2012

2017

Charts show the restructuring in the import-

export sector since 2012. During this period,

the total food export from Belarus to Russia has

increased by 1,7 times in volume terms.

A growth in the export of banned products

from Belarus to Russia is seen (e.g. export of

dried and salted fish, potatoes and roots has

increased by 8,8; 10,3 and 10,6 times

respectively).

Ingredients, packaging and labeling define the

market status of most of the imported products,

including those re-exported within the EEAU.

Sources: National Statistical Agencies, Customs Services

Sources: National Statistical Agencies, Customs Services Sources: National Statistical Agencies, Customs Services

Agriculture and Food Foreign Trade (9)

Sanctions Brief Overview

33 accounting | ERP | import | legal | tax

On 6 August 2014 Russian president signed a Decree № 560 "On the application of certain

special economic measures to ensure the security of the Russian Federation". The Decree

prohibits import of certain agricultural products, raw materials and foodstuffs originating from

certain countries into the territory of the Russian Federation for one year.

On 7 August 2014, Russian government issued Decision № 778 defining the list of products

banned and the countries concerned.

The list of banned products was first modified by the Russian government Decision from

20/08/2014 № 830.

The embargo was extended until 5/08/2016 by the Russian government Decision from

25/06/2015 № 625 which also modified the list of banned products.

The Decision № 625 was further modified on 27/05/2016 by means of Decision № 472 to

provide for possibility to import certain products if destined for the production of baby food.

A further prolongation of the embargo until 31/12/2017 was introduced by the Presidential

Decree № 305 from 29/06/2016.

On 30 June 2017 the validity of the embargo was again prolonged until 31/12/2018 by the

Presidential Decree № 293.

On 25 October 2017 the Russian Government with its Decree № 1292 extended the scope of

the embargo.

Agriculture and Food Foreign Trade (10) Banned Products

34 accounting | ERP | import | legal | tax

CN CODE PRODUCT

0103 (excluding 0103 10 000 0) Live pigs (excluding purebred breeding animals)

0201 Meat of bovine animals, fresh or chilled

0202 Meat of bovine animals, frozen

0203 Pork, fresh, chilled or frozen

0206 (excluding 0206 10 100 0, 0206 22 000 1.0206

29 100 0, 0206 30 000 1.0206 30 000 3, 0206 41

000 1, 0206 49 000 1, 0206 80 100 0, 0206 90 100 0)

Food by-products of cattle, pigs, sheep, goats, horses,

donkeys, mules or hinnies, fresh, chilled or frozen

(excluding goods for the production of pharmaceutical

products)

0207 Meat and edible offal of the poultry indicated in line

0105, fresh, chilled or frozen

0209 Pork fat, separated from lean meat, and poultry fat,

not flushed or not extracted in another way, fresh,

chilled, frozen, salted, in brine, dried or smoked

Out of 0210 Meat salted, in brine, dried or smoked

Out of 0301, 0302, 0303, 0304, 0305, 0306, 0307,

0308

Live fish (excluding hatchlings of salmon (Salmo

salar), trout (Salmo trutta, Oncorhynchus mykiss),

flatfish-turbot (Psetta maxima), capemouth

(Dicentrarchus labrax), live ornamental fish)

35 accounting | ERP | import | legal | tax

CN CODE PRODUCT

0302, 0303, 0304, 0305, out of 0306, out of 0307,

0308

Fish and crustaceans, molluscs and other aquatic

invertebrates

0401, 0402, 0403, 0404, 0405, 0406 Milk and dairy products (excluding specialised lactose

free milk and specialised lactose free dairy products

for dietary health food and dietary protective nutrition)

0701 (excluding 0701 10 000 0), 0702 00 000, 0703

(excluding 0703 10 110 0), 0704, 0705, 0706, 0707

00, 0708, 0709, 0710, 0711, 0712 (excluding 0712

90 110 0), 0713 (excluding 0713 10 100 0), 0714

Vegetables, edible roots and tubers (excluding seed

potatoes, seed onions, hybrid sweet corn seeds, pea

seeds)

0801, 0802, 0803, 0804, 0805, 0806, 0807, 0808,

0809, 0810, 0811, 0813

Fruit and nuts

1501 Pork fat (including lard) and fat Poultry, other than the

fat of heading 0209 or 1503

1502 Fat of cattle, sheep or goats, other than the fat of

heading 1503

1503 00 Lard stearin, lard-oyl, oleostearin, oleooyl and animal

oil, not emulsified or unmixed, or not prepared in any

other way

1601 00 Sausages and similar products of meat, meat offal or

blood; final food products based thereon

Agriculture and Food Foreign Trade (11)

Banned Products

36 accounting | ERP | import | legal | tax

CN CODE PRODUCT

From 1901 90 110 0, From 1901 90 910 0, From

2106 90 920 0, From 2106 90 980 4, From 2106 90

980 5, From 2106 90 980 9

Food stuff and finished products (excluding BADs);

vitamin-mineral complexes, flavor additives; protein

concentrates (of animal and plant origin) and their

mixtures; food fibre; food additives (including complex

additives)

From 1901 90 990 0 Food stuffs and finished products manufactured on

the basis of the cheese production technologies and

containing 1.5 % or more of milk fat

From 2501 00 Salt

Agriculture and Food Foreign Trade (11)

Banned Products

Key Regulations in Agriculture (1)

Ukraine The agrarian sector is one of the main budget-forming sectors of the national economy. Its special role is mostly defined by the favorable natural and climatic conditions and its geographical location. In general, the agrarian legislation in Ukraine is characterized by:

an excessive number of normative legal acts, different in their legal force;

unsystematic inclusion of agrarian and legal norms in laws;

the large proportion of regulations that often contradict or duplicate the previously adopted normative acts, which gives ground for their double interpretation and application.

On average there are more than 1000 regulations for the agro-industrial complex in Ukraine. The Constitution of Ukraine forms a framework for the development of agrarian law. It recognized the land, its subsoil, water and other natural resources as objects of the property right of the Ukrainian people.

Ukrainian legislation stipulated legal restrictions on operations for the sale and purchase of agricultural lands. State registration is required even if it concerns agricultural tenancy.

The established in the Art. 13, 14 of the Constitution land competences are specified in the Land Code of Ukraine (25 October, 2001).

Important laws in the regulation of agrarian relations:

"On the state agrarian policy framework for the period until 2015" from October 18, 2005 (on 21 March, 2018 the Verkhovna Rada of Ukraine registered a draft Law "On the framework of the state agrarian policy and state policy of rural development", №8171);

"On the priority of the social development of the village and agro-Industrial complex in the National Economy" from October 17, 1991;

"On the farm" from June 19, 2003

"On the privatization of property in the agro-industrial complex" from July 10, 1996

"On Fixed Agricultural Tax" from December 17, 1998

"On seeds and garden material", from December 26, 2002;

"On the livestock breeding" from December 21, 1999;

"On the agricultural output wholesale markets" from June 25, 2009; etc.

37 accounting | ERP | import | legal | tax

Key Regulations in Agriculture (2)

Belarus The main direction of the agrarian legislation

development is defined in the "Concept for the

Improvement of the Legislation of the Republic of

Belarus, approved by the Decree of the President

of the Republic of Belarus" on 10 April 2002

№205, as well as the "State Program for

Development of Agricultural Business in the

Republic of Belarus for 2016-2020", approved by

the government Resolution №196 from 11 March,

2016.

Basic normative acts regulating relations in the

sphere of agriculture:

The Law of the Republic of Belarus from

February 18, 1991 "On the Farm Economy";

The Law of the Republic of Belarus from

December 2, 1994 "On the veterinary";

The Law of the Republic of Belarus from

September 28, 1994 "On breeding in animal

husbandry";

The Law of the Republic of Belarus from

February 14, 1997 "On Seeds";

The Law of the Republic of Belarus from

December 25, 2005 "On Plant Protection";

The Law of the Republic of Belarus from

August 5, 2009 "On Land Reclamation";

The Decree of the President of the Republic of

Belarus from July 13, 1999 №27 "On the

introduction of a single tax for producers of

agricultural products";

The Decree of the President of the Republic of

Belarus from January 27, 2003 №40 "On the

management improvement of the

organizations of agro-industrial complex";

The Land Code of the Republic of Belarus,

2008;

The Water Code of the Republic of Belarus,

1998;

The Forest Code of the Republic of Belarus,

2000; etc.

It is worth noting that land purchase and leasing

procedure is strictly governed by a number of

legal acts, including Decrees of the President.

According to the rules, land plots are provided to

foreign entities under the results of the auction

and only via leasing, unless the investment

agreement provides for otherwise.

38 accounting | ERP | import | legal | tax

Key Regulations in Agriculture (3)

Kazakhstan Over the past years, the Parliament of

Kazakhstan has adopted more than 30 laws,

including the Farm Law, regulating relations in

the agrarian sector. Private ownership of

agricultural land has been introduced. The

agrarian legislation of Kazakhstan is based on

the Constitution of the Republic of Kazakhstan,

international norms and standards. The land is

state owned. Kazakh non-state companies may

privately own land plots granted for agricultural

commodity production. However, the right of

permanent land use cannot belong to foreign

land users.

Among the main legislative acts can be identified:

The Law of the Republic of Kazakhstan "On

state regulation of the development of the

agro-industrial complex and rural areas" (July

8, 2005);

The Law of the Republic of Kazakhstan "On

the farm economy" (March 31, 1998);

The Law of the Republic of Kazakhstan "On

agricultural partnerships and their associations

(unions)" (December 25, 2000);

Kazakhstan 2050" Strategy;

"The Law of the Republic of Kazakhstan "On Grain" (January 19, 2001);

The Law of the Republic of Kazakhstan "On Seed Production" (February 8, 2003);

The Law of the Republic of Kazakhstan "On the Protection of Selection Achievements" (June 13, 1999);

The Law of the Republic of Kazakhstan "On the Development of the Cotton Industry" (July 21, 2007);

The Law of the Republic of Kazakhstan "On livestock breeding" (9 July 1998);

The Law of the Republic of Kazakhstan "On Veterinary Medicine" (July 10, 2002);

Regulations on the procedure and conditions for the organization of leasing in agriculture, approved by the Government of the Republic of Kazakhstan (1998);

"The cotton market monitoring rules", approved by the order of the Minister of Agriculture of the Republic of Kazakhstan (October 3, 2007);

The Development Program "Agribusiness 2020";

The Law of the Republic of Kazakhstan from 29 October, 2015 "On Agricultural Cooperatives", etc.

39 accounting | ERP | import | legal | tax

Special Focus:

Milk and Cheese Industry

300

500

700

900

1100

1300

1500

2013 2014 2015 2016 2017

Russia Ukraine Belarus Kazakhstan

Milk and Cheese Industry: Key Indices (1)

41 accounting | ERP | import | legal | tax

Average price of milk, USD per ton

Milk and milk products consumption, kg per capita

Source: United States Department of Agriculture, BMI, National Statistical Agencies

150

180

210

240

270

300

2012 2013 2014 2015 2016

Russia Ukraine Belarus Kazakhstan

Milk production, kg per capita

150

250

350

450

550

650

750

2013 2014 2015 2016 2017

Russia Ukraine Belarus Kazakhstan

Charts show changes in Milk and Cheese

industry over a five-year period.

In general, there has been an increase in price

of milk and milk products, as well as all

categories of cheese in recent years.

Milk and cheese production in Belarus

considerably exceeds its consumption in the

country.

There has been a general decrease in milk and

cheese import in all four countries.

A growth in cheese production, consumption

and export has been observed in Belarus.

Source: Euromonitor, National Statistical Agencies

4,00

6,00

8,00

10,00

12,00

14,00

16,00

2013 2014 2015 2016 2017

Russia, Processed Cheese Russia, Hard Cheese

Russia, Soft Cheese Ukraine, Processed Cheese

Ukraine, Hard Cheese Ukraine, Soft Cheese

Belarus, Processed Cheese Belarus, Hard Cheese

Belarus, Soft Cheese Kazakhstan, Processed Cheese

Kazakhstan, Hard Cheese Kazakhstan, Soft Cheese

Milk and Cheese Industry: Key Indices (2)

42 accounting | ERP | import | legal | tax

Average price of cheese, USD per kilo

Source: Euromonitor, National Statistical Agencies

1

2

3

4

5

6

7

8

9

2013 2014 2015 2016 2017

Russia Ukraine Belarus Kazakhstan

Cheese consumption, kg per capita

Source: United States Department of Agriculture, BMI, National Statistical Agencies

Cheese production, kg per capita

0

5

10

15

20

25

2013 2014 2015 2016 2017

Russia Ukraine Belarus Kazakhstan

0

100

200

300

400

500

2013 2014 2015 2016 2017

Russia Ukraine Belarus Kazakhstan

0

50

100

150

200

250

300

350

2013 2014 2015 2016 2017

Russia Ukraine Belarus Kazakhstan

Milk and Cheese Industry

Imports and Exports

43 accounting | ERP | import | legal | tax

Milk import, thou. tons

43

Milk export, thou. tons

Source: UNdata, National Statistical Agencies

0

100

200

300

400

500

2013 2014 2015 2016 2017

Russia, Import Russia, Export

Belarus, Import Belarus, Export

Cheese import and export, Russia and Belarus,

thou. tons

Cheese import and export, Ukraine and

Kazakhstan, thou. tons

0

10

20

30

40

50

60

70

2013 2014 2015 2016 2017

Ukraine, Import Ukraine, Export

Kazakhstan, Import Kazakhstan, Export

Source: UNdata, National Statistical Agencies

28

23 4 4 3

38

Danone RussiaGroup of Cos

Wimm-Bill-DannProdukty Pitania OJSC

Molvest CJSC

Magnit PJSC

Pyaterochka OJSC

Other compamies

Milk Industry: Top 5 Players

Market Share in 2017, %

44 accounting | ERP | import | legal | tax

Russia

Source: Euromonitor, National Statistical Agencies

Kazakhstan Ukraine

Belarus

13,1

10,2

7,7

6,7 5,3

57

Savushkin ProduktOJSC

Minskiy MolochniyZavod N 1 OJSC

Unimilk PruzhanyJLLC(Danone)Babushkina KrynkaOJSC

Molochny GostinetsSOE

Other companies

17,8

11,8

10,6

9,4 9,2

41,2

Agroprodukt Asia LLP

Food Master JSC

Raimbek Agro LLP

Wimm-Bill-Dann ProduktyPitania OJSC

RG Brands JSC

Other companies

23,3

16,2

8,4 5,7 4,7

41,7

Lustdorf TOV

Molochny Alliance ZAT

Danone TOV

Wimm-Bill-Dann UkrainePAT

Bilotserkivskiy MolochniyKombinat TOV

Other companies

Belarus

13,8

13,7

10,7

6,2 5

50,6

Slucky SyrodelnyKombinat OJSC

Beryezovsky SyrodelnyKombinat OJSC

Savushkin ProduktOJSC

Borisovski MolochnyKombinat OJSC

Shchuchinsky MSZOJSC

Other companies

4,7 4,7

4,3 3,7

2,9

79,7

Wimm-Bill-DannProdukty PitaniaOJSC

Hochland RusslandLLC

Lactalis Vostok JSC

Syr Starodubskiy TnVKarat OJSC

Ryazanskiy ZPSOJSC

45 accounting | ERP | import | legal | tax

Cheese Industry: Top 5 Players

Market Share in 2017, % Russia

Ukraine

22,1

9,9

12,4

9 7,4

39,2

Food Master JSC

Wimm-Bill-DannProdukty Pitania OJSC

MilkiLand UkraineSubsidiary

Molochny AllianceCJSC

Hochland RusslandLLC

Other Companies

Kazakhstan

7,4

6,8

6,7

6

4,6

68,5

Pyryatynsky SyrzavodCollective Enterprise(Molochny Alliance)

ShostkynskyMiskmolkombinat OJSC

Mensky Syr OJSC(Milkiland Ukraine)

Dubnomoloko PJSC

Molochnik OJSC(Ukrproduct Group)

Source: Euromonitor, National Statistical Agencies

46 accounting | ERP | import | legal | tax

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Market Research Department

Christoph Spank

Market Research Team Leader

[email protected]

Tatiana Bibikova

Market Research Analyst

[email protected]

Taisiya Filina

Junior Project Manager

[email protected]

Maria Samundjan

Senior Project Manager

[email protected]

Arianna Manili

Trainee

[email protected]

Nikita Kolomiez

Trainee

[email protected]

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47 accounting | ERP | import | legal | tax