TV Party Tonight!

Nothing spices up a TV party in Moscow or Vladivostok like sukhariki (oven-toasted stale bread strips), bounteously lathered in Novichok cold-pressed, KGB-recommended “ecological” sunflower oil.

novich sunflower oil (ben neal:leo vorush)“Yakushev Ecofarm: Product for a Long Life. Limited series. Novichok cold-pressed sunflower oil. Special taste. Recommended by the USSR KGB.” 

If stale bread laced with Novichok is not enough to push you over the edge of cynicism, you can watch NTV’s latest pack of lies, “Dangerous Network,” a thirty-minute legally actionable slander fest about our antifascist comrades from Penza and Peetersburg who have been arrested and tortured by the FSB (the ex-KGB whose seal Novichok sunflower oil bears so proudly) for their non-involvement in a fictitious “terrorist network,” codenamed The Network, and about the lawyers and human rights activists who have been defending them.

If you had ever wondered what Nazi Germany would have been like it if had television, you need look no further than Russia’s NTV and its odious series of hit jobs on everything and anyone that sticks their head above the weeds in the Motherland.

If I were you I’d just skip the NTV mockumentary and slug down a whole bottle of Novichok cold-pressed KGB-approved sunflower oil. It will wash out innards real good, and it might not even kill you in the process. // TRR

Thanks to Ben Neal, Mark Teeter et al., for the heads-up. 

Hygge Сafe & Hotel

DSCN3604.jpgHygge Cafe & Hotel is located at 14D Nekrasov Street, in the heart of Petersburg’s Central District. You can reserve a room there through Booking.com. Photo by the Russian Reader

How are the following two stories, as summarized in business daily Delovoi Petersburg′s morning newsletter to subscribers and regular readers, and the photograph, above, which I shot during yesterday’s snowstorm, connected? I would argue they are profoundly connected, but I will leave it up to you to think the connections through. If you have any bright ideas, feel free to voice them in the comments section.

Who is responsible for the warplane downed in Syria. A Russian SU-25 has again been shot down. The pilot catapulted and, as transpired later, he engaged in combat with the enemy and blew himself up with a grenade, meaning he acted completely like a real war hero. But the hitch is there is no war on, so to speak. The airplane was downed after the the terrorists had been officially defeated. What is more, it was downed in a demilitarized zone.

 

 

Annals of Import Substitution: Got Milk?

Perhaps one of the big reasons the post-embargo Russian dairy industry has failed to achieve “total important substitution,” not mentioned in the otherwise comprehensive article, below, has been its penchant for gulling Russian consumers. Among the gullible is your correspondent, who was moved by the label on this milk carton (“Honest Natural Cow Milk […] from an Ecologically Pure District of Bashkiria”) to buy it the other day. My boon companion, however, immediately pointed out what the side of the carton revealed. In this case, “Honest Bashkir Natural Cow Milk” was actually reconstituted milk powder (“изготовлено из молока нормализованного”), not real milk. Since the embargo set in, every Russian has also encountered literally tons of fake cheese in the shops. Chockablock with palm oil, not milk, and sporting European sounding monikers to make them more attractive to “discerning consumers,” this fake cheese has generated massive popular distrust in domestically produced cheese and other dairy products. TRR

Why Import Substitution Has Failed in the Dairy Industry 
Despite the Produce Embargo, Milk Production Has Declined, Dairy Products Have Become More Expensive, and Demand Has Fallen
Yekaterina Burlakova
Vedomosti
January 22, 2018

“I’ve seen it myself, touched it with my own hands. The country is currently constructing three cheese factories with the capacity to produce fifty, sixty, and seventy tons daily, and in five years we will have forgotten the problem [the shortage of domestically produced cheese] altogether!” Russian agriculture minister Alexander Tkachov said recently, sharing his optimistic plans. “Let’s recall pork, vegetable oil, sugar, vegetables, and fruit. We also imported all this produce. We were seriously dependent.”

Tkachov and his colleagues never tire of talking of how the produce embargo, imposed by Russia in August 2014 on the United States, the EU, Norway, Canada, and Australia, has helped Russian farmers. Greenhouses have been built, orchards have been planted, and so on.

But import substitution has not taken hold in the dairy industry. Milk production has declined, dairy products have become more expensive, and demand for them has fallen off. Why has this happened?

Russia provides itself with only 75% of the dairy products it consumes; the rest is imported, mainly from Belaruas. However, Russia has always suffered shortages of domestically produced raw milk. But the circumstances have worsened. According to Soyuzmoloko, the Russian national dairy producers union, the production of raw milk decreased by two percent to 30.7 million tons between 2006 and 2016.

It is a complex and costly business, says a spokesperson for a dairy company. Vegetable production shows a profit after seven or eight years; fruit production, after four or five. Dairy plants take much longer to show a profit. According to different estimates, it takes between ten and fifteen years to put them in the black. Many potential investors are scared off by such figures, but our source said what the dairy industry needed were serious, long-term investments.

Indeed, the dairy business is considered complicated due to the long time it takes to see a return on investment, says Stefan Duerr, director general of EkoNiva, Russia’s largest milk producer. It generally takes three years to build a dairy plant and put it on line. Dairy production also requires considerable working capital: cows give milk only from the age of three. You have to prepare you own feed, and for that you need land: an average of about three hectares per cow, says Duerr. Pig breeders and poultry farmers have it much easier, since they can buy readymade feed.

Over the past four years, the price of raw milk has increased by about 60% to 25 rubles per kilo, says Artyom Belov, director general of Soyuzmoloko. This occurred after the ruble declined, and demand from processors increased. Yet the net price of milk has decreased after the ruble’s recovery. Belov is certain this makes dairy farming more attractive to investors. In his opinion, state support is also vital. In 2017, compensation of capital expenditures grew from 20% to 30%, while soft loans have been granted at an interest rate of up to 5%.

Investors Have Doubts
Investors still have doubts, however, For example, Rusagro’s principle owner Vadim Moshkovich recently announced he was willing to invest one billion dollars in milk and dairy production. But a decision on the project has not yet been made, says a spokesperson for the agricultural holding company.

“Dairy cow breeding really is a complicated business with a long-term return on investment, even taking subsidies into account. However much we cite the discounted return on investment model, seven years, which is mentioned in the press, we just cannot pull it off in Russia,” he says, raising his hands in dismay.

The processing and production of value-added products is needed to make the project viable. Total vertical integration—from feed production to the manufacturing of dairy products—is thus necessary, he argues.

Other investors have also spoken of possible investments in mega projects. Alexei Bogachov, a minority shareholder in the Magnit grocery store chain, has promised to invest 20 million rubles in a partnership with Rusagro. Miratorg has promised to invest $400 million, while Thailand’s Charoen Pokphand Group has promised to invest one billion dollars. In reality, only Vietnam’s TH Group has launched new, large-scale raw milk production facilities. Last year, the company began construction on dairy farms in Kaluga Region and Moscow Region that will accommodate approximately 40,000 head of dairy cows, and it recently announced plans to build farms in the Maritime Territory. It intends to invest $2.7 billion over the next ten years.

If circumstances on the market do not change, and milk prices do not go down, Belov forecasts it will be possible fully satisfy Russia’s milk needs in ten years. For the time being, processers deal with the milk shortage in different ways. For example, Oleg Sirota, founder of the cheese company Russian Parmesan, will soon bring his own dairy farm on line.  In turn, in order to insure stable supplies of milk, the French company Danone has invested in milk production in Tyumen Region in partnership with Naum Babayev’s Damate Group. The cost of the entire project is 5.6 billion rubles, but Danone’s share of the costs has not been disclosed. According to the agreement between Danone and Damate, all the milk produced at the facility will be sent to the Danone plant for eight years.

The Embargo’s Impact
“We saw that European producers with much lower prices would not arrive the next day, and we realized we could make long-term plans, that we had to invest in domestic production,” said Alexei Martynenko, owner of Umalat, a company that produces brined cheeses.

Almost as soon as the embargo was imposed, Martynenko gave up the day-to-day management of a feed production business and set about vigorously developing Umalat.

“I realized that if I didn’t change anything right away, we would sleep through the chance to grow the company,” he noted.

Many businessmen decided to tackle cheese immediately after imposition of the embargo, which among other things banned the import of cheese from the European Union to Russia. In 2016, according to Nielsen, Umalat was Russia’s leading manufacturer of sulguni, and took third place in the manufacture of mozarella and mascarpone. Since 2014, production at Umalat has doubled to 5,000 tons annually, says Rustem Mustafin, the company’s marketing director.

“The import substitution program and imposition of the embargo came in handy. We would have grown without them, but the growth would probably have been less considerable,” Mustafin continues.

However, the embargo’s impact wore off quite quickly, since it was immediately followed by a substantial downturn in household incomes, he stresses.

Sirota launched cheese production in the summer of 2015. Currrently, he produces semi-solid and hard cheeses, which retail for 800 rubles to 1,600 rubles per kilo. His cheesery’s first batch of parmesan will mature in August, when the embargo will celebrate its fourth anniversary. Currently, Sirota produces 400 kilograms per day. In 2018, he plans to ratchet production up to two tons per day.

Russian manufacturers have been most successful in producing hard and semi-hard varieties such as Russian, Dutch, and Altai, says Andrei Golubkov, a spokesman for Abzuk Vkusa [ABC of Taste], a Russian gourmet grocery store chain. There are also high-quality producers of brie, camambert, mozarella, and burrata. But the supply of good-quality ripened hard cheeses is still limited. The chain now mainly sells hard cheeses from Switzerland, which was not included in the embargo, and the South American countries, says Golubkov. Expensive Russian cheeses account for about 10% of all sales in terms of money and about 5% in terms of volume, Soyuzmoloko’s Belov says.

If the embargo is lifted, many businessmen involved in the manufacture of milk and cheese will be ruined, argues Sirota.

“Even if we could compete in terms of quality, we could not compete in terms of cost. The price of milk in Germany is currently around 20 rubles [per kilo], while it is 34 rubles in Russia,” says Sirota. [According to the industry website clal.it, the price of raw milk in Germany in November 2017 was 38.97 euros per 100 kilograms or approximately 27 rubles per kilo—TRR.]

Milk in Germany costs less due to cheap loans and government subsidies. In Russia, on the contrary, loans are short-term and expensive: they fall due between five and seven years. Investors have not yet managed to launch production, but the money has to be returned. There is always a shortage of good-quality milk for reprocessing. It takes 14 kilos of milk to make one kilo of cheese. Moreover, the highest grade of milk is required to ensure the desired quality of cheese.

Mustafin says Umalat is not afraid the sanctions will be lifted, however. The company has been vigorously promoting its brands, has found its customers, and has produceed cheeses that are better than their imported counterparts.

From Milk to Macaroni
Meanwhile, the consumption of dairy products has decreased by 5% from September 2016 to September 2017, according to Nielsen. Sales of kefir experienced the largest drop: 8.4%. Sales of sterilized milk fell by 7%, yogurt, by 5.8%, and cottage cheese, by 5%. For the first time in recent years, there has been a drop in the consumption of such traditional Russian dairy products as milk, smetana (sour cream), tvorog (cottage cheese), tvorozhki (quark), and ryazhenka (fermented baked milk), notes Anastasia Jafarova, director of customer relations in the department of sales and servicing of consumer panels at GfK Rus, a market research company. Perhaps the main reason is an increase in the average price by 10.4%, explains Jafarova. Price rises have mainly been due to the price rise of the raw material, i.e., the milk supplied by farmers, says a spokesperson at PepsiCo. In addition, a spokesperson for Danone cites other causes. Under the Plato road tolls system, the tolls imposed on heavy cargo vehicles rose by 25% in April 2017, and excise taxes on fuels rose by more than 8%. The decreased demand for dairy products has also been due to a decline in household incomes over the past few years, argues Belov.

The fact that people have started to skimp even on ordinary milk says they are likely to switch to cheaper products, notes Marina Balabanova, Danone’s regional vice-president for corporate relations in Russia and the CIS. This could be macaroni, cereals or other products, she speculates. As never before, Russians are rational in their spending and try to redistribute their expenses as efficiently as possible, says Jafarova. This testifies to the relative adapation to a protracted crisis on the part of Russians.

Agricultural minister Tkachov has also admitted that import substitution has not occurred in the dairy industry. He wrote about it in response to an official query from Communist Party MP Valery Rashkin. Although imports have dropped by 1.9 million tons since 2013, the production of milk has grown only by 1.4 million tons. The minister wrote that the demand for imported dairy products was currently 7.5 million tons. At a production growth rate of three percent annually, total import substitution would take at least nine to ten years. But work is currently underway to increase state support, which would reduce this period to five to six years, Tkachov hopes.

fullscreen-3dv

“How the Consumption of Dairy Products Has Fallen (from June 2016 to June 2017, in percentages). Cheese spread and smoked cheese: –6. Quark: –5. Milk: –4. Yogurt drinks:–4. Firm yogurt: –4. Sour cream: –2. Cottage cheese: –2. Source: GfK Russia.” Infographic courtesy of Vedomosti

We Consume Too Little
A person needs to eat at least three dairy products per day. Eighty percent of the daily recommended intake of calcium is thus supplied. According to Soyuzmoloko, calcium is absorbed most easily this way. Their argument is backed up by the Federal Nutrition and Biotechnology Research Center and the Russian Osteoporosis Association. The Russian Health Ministry recommends individuals consume at least 325 kilos of dairy products annually. But we are far from achieving these norms: individual annual consumption of dairy products was 233 kilos in 2016. However, a top executive at a Russian agricultural holding company argues these claims are a bluff. In Soviet times, there were meat shortages, so dairy products were consumed as the primary source of protein. Circumstances have now changed. Russia now produces enough of its own poultry and pork at affordable prices. So there is simply no longer the need to eat so many dairy products, he explains.

Translated by the Russian Reader

UPDATE!

Up to 25% of Cheese in Russia Is Fake, Smuggled From Ukraine — Watchdog
Moscow Times
January 25, 2018

Up to a quarter of ‘cheese products’ sold in Russia were produced in Ukraine, circumventing Moscow’s embargo on food imports, according to Russia’s state agricultural watchdog.

Russia placed restrictions on food imports, including dairy, from countries that enacted sanctions against Moscow after its annexation of Crimea from Ukraine in 2014. The embargo has been a boon for domestic Russian producers, but consumers have complained about a proliferation of “fake cheese” — dairy products made with milk-substitutes.

Up to 300,000 tonnes of Ukrainian cheese products are entering Russia every year after being repackaged in Belarus, Russia’s agricultural watchdog Rosselkhoznadzor spokeswoman Yulia Melano told the RBC business portal Tuesday.

“In all likelihood, we’re talking about the legalization of Ukrainian cheese or protein and fat products through Belarus,” reads a letter written by Rosselkhoznadzor head Sergei Dankvert that was obtained by RBC.

The Ukrainian ‘cheese products’ mostly consist of vegetable oils, rather than dairy, and are imported via Belarus under the guise of Macedonian or Iranian cheese, according to the letter.

Cheese-like products could account for more than half of all cheeses sold in Russia, Andrei Karpov, the executive director of the Association of Retail Trade Companies (AKORT), was cited as saying by RBC.

Rosselkhoznadzor does not yet regulate cheese products, which are made almost entirely out of milk substitutes, and does not officially track its imports.

Thanks to Mark Teeter for the heads-up

Kefir the Plough

punisher-it's a lonely row to hoe

I cannot discern grace.

A child of God may have the kingdom of grace in his heart, and yet not know it. The cup was in Benjamin’s sack, though he did not know it was there; so thou mayest have faith in thy heart, the cup may be in thy sack, though thou knowest it not. Old Jacob wept for his son Joseph when Joseph was alive; so thou mayest weep for want of grace, when grace may be alive in thy heart. The seed may be in the ground, when we do not see it spring up; so the seed of God may be sown in thy heart, though thou dost not perceive it springing up. Think not grace is lost because it is hid.

Before the kingdom of grace come into the heart, there must be some preparation for it; the fallow ground must be broken up: I fear the plough of the law has not gone deep enough: I have not been humbled enough: therefore I have no grace.

__________________________________________

Today on The Archers:

At Bridge Farm Susan is keen to start promoting the kefir again now that Christmas is over. However, Helen is far too busy, and insists she’ll have to wait for Tom to return from his conference. Susan devises a market research project of her own, and starts pouncing on customers at the Ambridge Tearoom. Fallon and Emma worry that she’s scaring away customers, and do their best to moderate her zeal. Eventually Emma puts her foot down: the Tea Room is not the place for Susan’s market research.

__________________________________________

What Emma says to Susan when she puts her foot down over the latter’s sinister kefirization of the Ambridge Tea Room:

Take Life or Nonlife in the Anthropocene and the Meteorocene. Geology and meteorology are devouring their companion discipline, biology. For if we look at where and how life began, and how and why it might end, then how can we separate Life from Nonlife? Life is not the miracle—the dynamic opposed to the inert of rocky substance. Nonlife is what holds, or should hold for us, the more radical potential. For Nonlife created what it is radically not, Life, and will in time fold this extension of itself back into itself as it has already done so often and long. It will fold its own extension back into the geological strata and rocky being, whereas Life can only fall into what already is. Life is merely a moment in the greater dynamic unfolding of Nonlife. And thus Life is devoured from a geological perspective under the pressure of the Anthropocene and Meteorocene. Life is merely another internal organ of a planet that will still be here when it is not, when we are not, undergoing its unfolding, creating who knows what. Will Life be a relevant concept there? If not, perhaps Nonlife will finally be freed from Life’s anxiety, freed from being Nonlife, or as Luce Irigaray might have said, from being the other of the same, freed to finally be the other of the other.

Until then perhaps we shouldn’t be surprised that the emergence of geontopower is mobilizing very similar techniques and tactics that we saw when we were looking at late liberalism. We hear all around us the coming Event, the catastrophic imaginary orienting and demanding action—the last wave, the sixth extinction. And yet pulsing through various terrains is a very different temporality—the river becomes a polluted dump; the fog becomes smog; rock formations become computer components. Is this why the poetics of the quasi-event stitch together the environmental studies of Rob Nixon, the affective optimisms of Lauren Berlant, and the crumbling worlds of settler liberalism? It is most certainly why we see the constant seduction of older late liberal politics of recognition: the sudden realization, the welcoming of an otherwise into what already exists, the extension of qualities we already most value and create most of our value from to the other.

Get out the musical instruments. Put on the robes. Say a mass of remembrance for the repose of the souls of the dead. Cling to life if even in the form of its mass extinction.

__________________________________________

I can imagine listeners will have a lot to say about the further radicalization of The Archers on this week’s edition of Feedback.