Sergei Shelin: Isolationism Has Corrupted Russia

vhuo87jzsh8j2vtaThe label from a bottle of Port Wine 777. Courtesy of Collectionerus

Isolationism Has Corrupted Russia
The Sukhoi Superjet 100’s crash shows what happens when a country isolates itself from the world while trying to keep up with the 21st century’s Joneses 
Sergei Shelin
Rosbalt
May 7, 2019

Only Murmansk Region announced an official day of mourning for the people who perished at Moscow’s Sheremetevo Airport on May 5. There was little expectation a national day of morning would be announced, since the protocol for such things, adopted by the country’s leaders for their own convenience, do not stipulate a national day of mourning after disasters of this magnitude. It is thus neither a matter of heartlessness nor the upcoming Victory Day holiday.

The Sukhoi Superjet 100s have not been grounded, however. True, the authorities are currently pushing the hypothesis the crash was caused by pilot error. This is a more intelligible and attractive explanation than the hypothesis that was cooked up just the other day as a diversion, the one about how some passengers, allegedly, prevented other passengers from escaping because they were trying to get their luggage out of the burning plane. Nothing has yet been proven, however, although hardly anyone would argue with the fact that the first passenger jet designed and built in Russia since the Soviet Union’s collapse has been a failure.

The Super Jet was produced long before the current falling out with the west. Its designers made generous use of imported parts, hoping the plane would sell like hotcakes abroad. Today, the few foreign airlines whom Sukhoi managed to persuade to purchase the planes, for example, the Mexicans, complain about the Super Jet’s unreliability, design flaws, and delays in procuring spare parts. It would seem they are looking for a good excuse to stop flying the planes.

The flip side of these failures has been the attempt to force Russian airlines to operate the plane, especially Aeroflot. What would grounding the plane mean now? It would be tantamount to bringing the entire undertaking to a close. Clearly, the Russian state’s ambitions and collective self-interest have coalesced to oppose this decision. The Super Jets are still flying, and we can only hope everything will work out for the best.

Such semi-Russian, semi-foreign collaborations are feasible and normal if the general contractor is not having a spat with the outside world, and airlines are free to choose which airplanes they fly. This was not quite the case from the get-go, but when Russia’s quarrel with the west gained momentum, all the worst aspects of the venture elbowed their way to the fore, turning into a self-sustaining process.

The deeper Russia sinks into isolation, the worse the links in all business chains function, while state protectionism constantly increases for anything that resembles import substitution or at least apes it. The number of failures and breakdowns in all parts of Russian society, some of them involving fatalities, sometimes without them, thank God, inevitably grows.

What is the difference between yesteryear’s Soviet isolationism and the current Russian isolationism? The former was preprogrammed to generate victims and hardship. They were merely part of the system. We need not talk about Stalin’s horrors. Even during its final decades, the Soviet Union was still typified by universal poverty, quite strong societal discipline, and the ruling class’s relative modesty. This state of affairs was maintained by a ragtag ideology and a still palpable fear of the state machine. Isolation was vouchsafed, of course, by the Soviet Union’s lagging behind the outside world. But it did not weigh heavy on every aspect of life and all at the same time. People moved into Khrushchev-era blocks of flats, regarding them as the last word in modern housing. They drank 777 brand “port wine,” having no clue how real Portuguese port tasted.

On the other hand, the Soviet military-industrial complex competed successfully with the rest of the world, at least until the early 1980s. Even though it was a byproduct of military aviation, Soviet civil aviation was quite impressive. The country’s professional communities, including the period’s passenger airline pilots, maintained a strict work ethic longer than Soviet society at large. Crashes were not so rare, however. But they were usually covered up not only due to totalitarianism but also because the information revolution had not yet happened.

The Soviet regime seemed invincible almost to the bitter end. Current attempts to resurrect it, despite their impressive magnitude, are laughable.

Today’s Russia is not the Soviet Union.  It does not have the stamina to compete in arms races and so forth with the outside world. It has even less will to self-denial, both among the elites and the grassroots. People have been adapting to the plans of the authorities to lock them up in a besieged fortress forever, but their life hacks are completely different from what they were in the last century.

Many Russians who have the right skills, experience, and education have been leaving abroad to work. By the way, their ranks have included hundreds if not thousands of the country’s best commercial pilots. Several millions of people, each of them capable of doing something well, have emigrated from Russia during Putin’s twenty-year reign.

Meanwhile, the majority of Russians, who have stayed in Russia, have tried to make themselves as comfy as they can in their import-substitution society, hoping either for special perks or state welfare, or perks and welfare all at once.

Since isolation has kicked in, independent business, already frail, has almost gone extinct. But the bureaucratized “state-minded” capitalists who took over the entire business field have nothing in common with the dexterous captains of Soviet management. As they get filthy rich through import substitution, today’s Russian magnates would never think of depriving themselves of the outside world’s blessings. They do not pretend to be farsighted. Simple minded, they loudly demand that the isolationist feast go on, becoming more creative as it proceeds. From time to time, the peculiarity of their exclamations spices up the sad circumstances, but not much.

Many people laughed at Viktor Linnik, president of Russian agribusiness giant Miratorg, and the National Meat Association when they called on the government to ban individuals from bringing small amounts of sanctioned European produce back to Russia. They were especially amused when Linnik said, “Jamon should be eaten in Spain, while Parmesan cheese should be eaten in France.”

The most striking thing about what Linnik said was not his confusion about Parmesan cheese’s national provenance, but the ease with which one could continue his line of though by saying, for example, that Russian bread should be eaten in Russia and, consequently, it was time to stop exporting grain, one of the few export sectors in which Russia has been blossoming. Would you tell me only a crazy blowhard would suggest such a thing? I doubt you would. Many things that had seemed impossible have already happened during the current orgy of import substitution, which consists of equal portions of greed and persecution mania.

Russia’s newfangled twenty-first-century isolationism not only vouchsafes the country will lag behind others. It is a species of intellectual, moral and professional corruption. It means no lessons can be learned from accidents and disasters. It means decadence, decay, and collapse are fobbed off as a decent, normal life.

Translated by the Russian Reader

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Nastiness Is a Warm Gun: The Kremlin’s Cowboys

bd1bf37b99A Miratorg worker tending calves. Courtesy of Readovka

Business Russian Style, or, What is Miratorg, and What Do You Eat with It?
Dmitry Zhuravsky
Readovka
April 30, 2019

How Did a Company Importing Meat from Brazil End Up Getting Most of Russia’s Agricultural Subsidies? 
Miratorg’s own website identifies it as the largest agribusiness investor in Russia. The company is owned the Linnik twins, Viktor and Alexander. Viktor serves as the company’s president. It was Viktor Linnik who, last week, proposed tightening controls on the luggage of people entering Russia and increasing penalties for the illegal import of meat-based products. Today, he encouraged Russians to stop thinking about Parmesan cheese and start thinking more about the country’s growth. To rub it in, he dubbed everyone disgruntled with such proposals “blowhards.”

We should point out right off the bat that the fact Prime Minister Dmitry Medvedev’s wife’s maiden name is Linnik is only a funny coincidence, one which the Linnik twins have never tired of mentioning when they are interviewed by journalists.

The facts back this up. Blood relatives of the Russian state’s second most important person could not have established a giant agribusiness company that keeps all its accounts and founding capital outside Russia.

One hundred percent of Miratorg’s shares are owned by Cypriot offshore companies: 99.99% by Agromir, Ltd. (despite its Russian acronym, the company is registered in Nicosia), and 0.01% by Saudeid Enterprises, Ltd. (also registered in Nicosia).

Nevertheless, Miratorg is on the Russian federal list of so-called backbone companies and, since 2015, due to Russia’s self-imposed ban on meat and produce imports, it has been dubbed a strategic company. These regalia allow the Cypriot-based company to obtain loans from Vnesheconombank at discounted rates, which means it borrows part of its operating capital by drawing on the future pensions of Russians. (We published a detailed analysis of this scheme in a previous article.) It also means Miratorg can apply to the government for subsidies to pay back these selfsame loans.

A Success Story
Considering Viktor Linnik’s current circumstances, Miratorg’s origins appear laughable. The company was initially established to import meat from Holland and Brazil to Russia. To make the job easier, two years after the company was founded, in 1997, Miratorg opened a subsidiary in the Kaliningrad Sea Fishing Port, through which it imported meat to mainland Russia. Miratorg did business this way for nearly ten years. In 2005, it purchased a stake in two BelgoFrance-owned pig farms in Belgorod Region. The import company was transformed into a full-fledged agribusiness.

Kaliningrad Sea Fishing Port. Courtesy of Readovka

Miratorg went on to co-found a farm in Kaliningrad Region. A little later, it moved into Bryansk Region, which has become the company’s second home.

It was also in 2005 Miratorg was chosen to be involved in the National Priority Projects, a program for growing “human capital,” announced by Vladimir Putin on September 5, 2005. Until Dmitry Medvedev was elected president, the program, which included promoting the agricultural sector as one of its priorities, was overseen by the current Russian prime minister. Since 2008, when Medvedev was inaugurated president, the agricultural growth program has had its own line item in the federal budget.

Current Realities
Miratorg is currently Russia’s largest meat producer. According to Kontr.Focus.ru, an online service for assisting in doing due diligence on potential clients and business partners, Miratorg, Ltd., has founded thirty-six subsidiaries in eight regions of Russia. In 2017, the company produced 415,000 tons of pork, 114,000 tons of poultry, and 82,000 tons of beef.

Russia’s regions regard Miratorg as a valuable investor whom nearly any governor would be glad to welcome into his neighborhood. According to Miratorg’s website, the company has made a total of 200 billion rubles in investments. The advent of an agricultural market player of this caliber in a region means a guaranteed inflow of money from the federal budget in the form of subsidies from the government’s agricultural sector growth program and  Miratorg’s own investments.

On paper, Miratorg is a real find for regions heavily dependent on federal government subsidies. Aside from the federal agricultural subsidies it brings with it, Miratorg contributes to regional budgets through the land it leases. Its farms provide jobs while they are being builty and after they are brought on line. In addition, it pays taxes in the regions. The company is not a burden but a blessing, or so it would seem.

Russian Prime Minister Dmitry Medvedev and Miratorg President Viktor Linnik. Courtesy of Readovka

Taking advantage of its status, Miratorg moves confidently around Russia. In the regions, it has become accustomed to acting suddenly and brazenly. The company often receives land under indefinite gratuitous bailments by order of the federal government, whose decrees are personally signed by Prime Minister Medvedev.

Miratorg usually acts in full compliance with the law, although the effects of how it does business trip up regional governments. After three years, the land it leases free of charge is transferred from regional ownership to Miratorg’s ownership.

Last summer, the Bryansk Commercial Court adjudicated a conflict between the Bryansk Meat Company (Miratorg’s local subsidiary) and the Bryansk Regional Government. Miratorg tried to prove that members of a district council had violated the law by refusing to sell them land they had been leasing. According to law, a company that has leased agricultural land for three years has the right to purchase it and continuing farming it. Only two conditions must be met for the deal to go through: the relevant regulatory authorities must have no objections, and the land must be used for its original purpose.

The Bryansk Meat Company had complied with these terms, but local councilors had not signed off on the deal. Originally, they had agree to lease the land to the investor. Later, Miratorg’s subsidiary decided to trick the council and buy the land. Consequently, the local council was not paid the rent promised to it and did not profit from Miratorg’s presence in the district.

Instead of a lease, the local council was offered a one-time payment, which is transferred to the council’s accounts when the investor buys the land. Bryansk Meat Company’s farm occupies thirteen parcels of land totaling 7,398,700 square meters. Under the terms of the sale of the parcels to Miratorg, the average assessed value of one square meter of land is a mere 1.6 rubles. It is a great deal for Miratorg, but not for Bryansk Region.

We found reports of similar law suits ongoing between Miratorg and local governments in other regions of Russia.

Nastiness Is a Warm Gun
Since 2009, Miratorg has also confidently been colonizing Kursk Region. Its investments there began with the Pristen District, but currently the company operates in thirteen districts in the region. Its facilities in Kursk Region include the Pristen Pig Farm, Blagodatnoye Agricultural Enterprise, Renaissance Farm, Fatezh Lamb, and Miratorg Kursk, Ltd. According to Miratorg’s figures, it invested 17 billion rubles on its agribusiness facilities in Kursk Region between 2009 and 2017. In the Pristen District, it built two pig-breeding facilities with three sites each, while in the Oboyan District it built two pedigree breeding units.

Currently, Miratorg is building what will be Europe’s largest refrigerated slaughterhouse with a capacity to process 4.5 million head of hogs or 400,000 tons of meat in slaughter weight. Miratorg has also been building seven pig farms in two other districts in the region.

3fe1ac38af.jpgA billboard showing Miratorg’s assets in Kursk Region. Courtesy of Readovka

Why has Miratorg invested so much in Kursk Region? For the same reason it has invested heavily in Smolensk, Bryansk, Kaluga, Kaliningrad, and other regions in Russia. The Russian federal budget supports domestic industrial agricultural enterprises with subsidies. Some of the federal government’s assistance is earmarked for the largest players in agribusiness, the strategic, “backbone” companies we mentioned earlier. Some of the assistance is filtered through regional government budgets, where it is meant to boost small companies and support local producers. When Miratorg sets up a subsidiary in a region, it automatically grabs the lion’s share of federal subsidies for itself.

In Russia, there are no limits on the subsidies a particular agricultural holding company can receive. By using the subsidiaries it has established in the regions, a national agribusiness company can qualify for regional subsidies. For example, in 2016, the Bryansk Meat Company was awarded 98% of all subsidies earmarked in the federal budget for promoting agriculture in Bryansk Region.

At the same time, Miratorg has been officially designated as a strategic, “backbone” enterprise. Accordingly, the company and its subsidiaries also receive subsidies for pursuing particular projects. Since 2014, Vnesheconombank has lent Miratorg $871.5 million to expand meat production. Thanks to sleights of hand such as this on, in 2016, Bryansk Meat Company left not only farms in Bryansk high and dry in terms of financing but also farmers nationwide by hogging 90% of all subsidies earmarked for agriculture. The total amount of subsidized loans was 33.6 billion rubles, and this financing was obtained by a single Miratorg subsidiary for a single year.

The company has been feeding off this program since it was founded in 2005. Miratorg has received hundred of billions of rubles in subsidies over this period.

The more subsidiaries it gets, the more lines of credit Miratorg can receive. The story  of its rise to the top bears a strong resemblance to the way Yevgeny Prigozhin built his school cafeteria catering monopoly in Moscow. There is one signal difference, however: whereas Concord Catering’s contract implies that Prigozhin’s food production facility does the work for which it was contracted and pays back its debts out of the profit generated by the facility, some of Miratorg’s loan agreements contain an interesting loophole. It can fulfill its obligations to Vnesheconombank one of two ways, either the way Concord Catering does it, by paying back its debts out of its profits, or by selling off its founding shares in its subsidiaries to pay off its loans. Meaning, hypothetically, Miratorg can rid itself of some of its subsidiaries.

Where Do Miratorg’s Profits Go?
Considering the billions in government subsidies it receives annually, Miratorg and its owners do not even have to run a good business to live high on the hog. According to open sources, Miratorg’s profits shrunk fivefold in 2016, amounting to a mere five billion rubles, despite the fact the company received several tens of billions of rubles in subsidies from the Russian federal government.

Nevertheless, Miratorg is the main supplier of meat for huge fast food chains such as McDonalds and Burger King. It has also launched its own cafes and supermarket chain. Miratorg’s profits, which are incomparable to the subsidies paid to the company, end up not in Russian bank accounts, but in offshore accounts in Cyprus.

d79d3fe745.jpgA  Miratorg supermarket, newly opened somewhere in Russia. Courtesy of Readovka

Miratorg’s operations do not resemble an attempt to promote Russian agriculture, but rather a scheme for spiriting federal money out of the country. Given Miratorg is the industry leader in terms of land assets and government support, it should also have come to monopolize supermarket shelves. Its status as a strategic enterprise and the subsidies it receives simply oblige it to aspire to this end. The government’s plan was to have Miratorg replace all the imported meat banned from supermarkets with domestically produced meat.

Instead, Miratorg annually receives several hundreds of billions in subsidies allocated by the government to support the country’s agriculture. Miratorg spends the money to purchase land, which it uses, along with shares from its regional subsidiaries, as collateral to obtain more loans.

Ultimately, instead of building a successful business and resurrecting Russian domestic agriculture according to the government’s plan, Miratorg merely filches money from the federal budget. As long as it keeps feeding the “Cypriot butchers,” real hardworking Russian farmers will have to get by without substantial assistance. Eventually, the whirligig of subsidies could lead to the complete collapse of Russian agriculture as such.

Thanks to Anna Klimenko for the heads-up. Translated by the Russian Reader

Are Russians Eating Well?

DSCN1832A fruits and vegetables stall at the famous Hay Market (Sennoy rynok) in downtown Petersburg, September 29, 2018. Photo by the Russian Reader

Eating Their Fill: Russia’s Food Security in the Wake of Crimea
Have Russians Eaten Better After the Government Moved to Defend Them from Western Food? 
Yevgeny Karasyuk
Republic
December 6, 2018

Soon after the embargo that was imposed four years ago in response to the stance of western countries on Crimea, analysts warned Russia itself would primarily suffer from food anti-sanctions.

“We won’t heighten the Russian Federation’s food security at all. In fact, we will reduce it,” Natalya Volchkova, a professor at the New Economic School, said at the time.

Of course, the criticism of the experts was ignored. No one in government questioned the policy of forced import substitution. Most Russians even imagined it was a rare instance when the government made a good decision. Only a few years ago, 71% of the populace [sic] spoke in favor of limiting imports.*

Time has passed, and the experts to whom no one listened have compiled figures showing where the policy has taken the country. A recent report, authored by a group of researchers from RANEPA, provides an analysis of its consequences.

Import substitution in the food sector was an obsession and, at the same time, a source of pride for ex-agriculture minister Alexander Tkachov. His replacement, Dmitry Patrushev, son of the Russian Security Council’s secretary and a none-too-successful state banker, has changed little in the government’s take on the situation. The new minister is certain Russia has reached a level of self-sufficiency above 90% in terms of basic food staples. Thus, Alexei Gordeyev, deputy prime minister for agriculture and an ex-agriculture minister himself, is convinced Russia has successfully carried out import substitution.

Food imports actually did slump sharply—by 46%—from 2013 to 2016. Although an unbiased analysis if how Russian producers succeeded in turning the tables and quickly saturating the market with their own products would point to the ruble’s sudden devaluation, rendering foreign imports uncompetitive, as had already happened in recent history, rather than to the success of the anti-sanctions.

Whatever the cause of Russia’s newfound food independence, however, it has not lead to food security. Citing the international standard, the authors of RANEPA’s report define food security as “the physical and economic availability of safe nourishment, sufficient for an active, fulfilling life.” In other words, there really are more domestically grown and produced food items in Russia nowadays, but the bulk of the populace has less and less access to them.

“Caloric Value of the Russian Diet.” The blue line indicates caloric value, while the dotted line indicates the recommended daily caloric intake per family member in kilocalories. The light purple area indicates the number of Russians who suffer from obesity, in thousands of persons, while the shaded dark purple area indicates the number of Russia who suffer from anemia, also in thousands of peoples. Source: Rosstat and RANEPA. Courtesy of Republic

Last year, Russia was ranked forty-first in the Global Food Security Index, compiled by the Economist Intelligence Unit, meaning that it ranked lower than it had in 2013, when it ranked fortieth. This was due, among other things, to insufficient funding of research and a reduction in the variety of food products.

According to official statistics, food accounts for approximately 35% of expenses in Russian household budgets, which is a high proportion when compared with the OECD countries, among which even the highest percentages, achieved by Poland and Mexico, fall short of 25%. Independent evaluation of spending on food, however, claim that the proportion of Russian family budgets spent on food is actually over fifty percent. Given the almost continuous drop in the real incomes of Russians, the selection of products has declined in quality and abundance. On average, Russian households continue to skimp on everything they can do without, as confirmed by the compilers of the Coffee and Milk Index, as published by Romir, a Russian marketing research company. (The index tracks sales of chocolate, coffee, milk, and bottled water.) RANEPA’s researchers noted the discrepancy between the excess fat in the food and bread Russians eat and the low number of calories in their diets.

By closing the borders to imports and showering the domestic agro-industrial complex with generous state subsidies—1.2 trillion rubles [approx. 15.9 billion euros] in the past six years from the federal budget alone—the regime has persuaded itself it has been filling the nation’s bellies and improving its health. Its expectations were exaggerated, however. Oversaturated with cheap carbohydrates, the standard fare eaten by many Russians remains unbalanced and low on energy. “This is borne out by widespread anemia among the populace as a whole and children in particular,” RANEPA’s researchers write. The number of Russians who suffer from obesity has grown for the same reason.

Obviously, these problems cannot be written off as temporary glitches in demand in the domestic food market, whose revival has been unanimously trumpeted by former agriculture ministers and the current agriculture minister. Rather, they are the natural consequence of systemic problems with the natural resources economy that shoulders the burden of the Kremlin’s geopolitical capers. The average Russian family often simply cannot afford a plentiful variety of healthy, high-quality food.

The authors of RANEPA’s report have emphasized this.

“Neglecting this fact can lead to a distorted picture of the state of food security,” they write.

However, there is still very little chance the alarming conclusions of the experts will be heard this time around, forcing the government to make adjustments to its food policy.

* How did they do that? Was a nationwide referendum held? The author, of course, is referring to a so-called public opinion poll in which, at best, a thousand or two “ordinary” Russians were asked loaded questions, to which they gave the “right” answers. {TRR}

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Russians Spend 30% of Their Budgets on Food
Georgy Tadtayev
RBC
December 17, 2018

Russians spend nearly a third of their household budgets on food. Russia lags behind Montenegro, Latvia, and Turkey in this sense. Russians spend less than seven percent of their budgets on culture and leisure.

According to RIA Rating, as reported by RIA Novosti, Russians spent 31.2% of their household budgets on food in 2017.

The estimate of the percentage of their household budgets people in forty European countries, Russia, Kazakhstan, and Turkey spend on food was based on information from the IMF and national statistics agencies. Russia ended up in the bottom ten of the ranking, ranking 31st. Its nearest neighbors were Montenegro (29.7%) and Latvia (31.7%).

Ukrainians spend the greatest portion of their household budgets on food: 50.9%. People in Kazakhstan (46%, 39th place) and Moldova (43.4%, 38th place) also spend more than 40% of their budgets on food.

Western European countries topped the rating. Luxembourg came in first place. Residents of the duchy spend a mere 8.7% of their money on food. Close behind Luxembourg were Great Britain (10%) and the Netherlands (10.6%).

The agency also ranked countries according to percentages of income spent on alcohol and cigarettes. Residents of three Balkan countries—Romania (8.2%), Bulgaria (5.1%), and Serbia (4.7%)—spend the most on bad habits. Luxembourg (1.3%), Moldova (1.5%), and Cyprus (1.6%) spend the least on alcohol and cigarettes. Russia ranked 24th: Russians spend 3% of their househould budgets on bad habits.

Sweden was the top-ranked country in terms of spending on culture and leisure: Swedes spend 18.7% of their budgets for these purposes. Moldovans spend the least on leisure and culture: 1.3%. Russia ranked 21st: Russians spend 6.9% of their money in this category.

Translated by the Russian Reader

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.

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“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

Cotton in Volgograd: An Immigrant’s Story

The White Gold Immigrant
Alexandra Dontsova
Takie Dela
December 5, 2017

Oybek Kimsanbayev’s life is like a Hollywood film: a brilliant scientific career, crushing failure, departure from his native country, work on a construction site, and his first experiments with cotton in Russia.

A heated discussion was underway at Volgograd State Agricultural University. Local and university officials were telling a visiting deputy agriculture minister about the local curiosity: cotton. Imagine, they told the deputy minister, it grows here, and the quality is even excellent. They dreamed aloud how it would be grown on an industrial scale. All that was needed was state support and processing complexes.

While the officials were singing cotton’s praises to the deputy minister from Moscow, a man with a haggard face stood in the doorway of the conference hall. He nervously bit his lips, alternating his gaze between the floor and the audience. Oybek Kimsanbayev heads a group of scientists who have developed varieties of cotton capable of growing in the Volgograd Region’s climate. The region is recognized as the northernmost point in the world where it is possible to grow cotton. Although he was the most important person in the room, Kimsanbayev was not on the list of speakers.

Oybek Kimsanbayev waiting to be interviewed. Photo by Alina Desyatnichenko for Takie Dela

Everyone except the man who had made the conversation possible talked about cotton and the prospects of its cultivation in Russia. (Given a skillful approach, Russian cotton might challenge the US and China’s hold on the market.) However, at some point, the university’s rector realized the discussion lacked something and gestured for Kimsanbayev to come and sit down at the round table at a place that had happily been  vacated.

Construction and Cotton

Kimsanbayev tells journalists nearly the same story when asked why he started researching cotton in Russia, adding that he is very grateful. Were it not for reporters, few people would know of his work, and he scarcely would have been able to get the ear of the authorities.

“In 2006, a cooperation agreement was concluded between Taskhent State Agricultural University and Volgograd State Agricultural University. Researchers launched projects on alternative crop production, meaning cultivatings crops that have not usually been grown in a particular area. One lab worked on reviving cotton growing in Russia. The outcome was a project for generating ultra-early ripening, high-quality varieties with a high fiber yield,” Kimsanbayev says at one go.

“And the non-official story? Why did you start researching cotton in Volgograd?”

We are sitting in small cafe in the Hotel Volgograd. It is pouring rain outside. Opposite our table is a group of foreigners. Judging the by patches on their blazers, they are FIFA officials, who have arrived in the city to monitor construction of the city’sstadium for the 2018 World Cup.

Kimsanbayev is forty-three years old. Aside from Tashkent Agricultural University, he has a degree from the University of Seoul, taught at Columbia University, ran a lab, worked for the president of Uzbekistan in the early noughties, and at the age of thirty-five became the youngest doctor of agricultural sciences in his country. He has published hundreds of scientific papers, and he has developed and co-developed some two dozen varieties of cotton. Until 2012, he led an international project for creating ultra-early ripening cotton varieties.

Kimsanbayev shows the work his lab does. Photo by Alina Desyatnichenko for Takie Dela

It was at this high point that Kimsanbayev’s life, chockablock with prospects and ambitious plans, fell apart overnight. Due to a mistake he discusses reluctantly, he was forced to leave Uzbekistan.

“Yeah, I have a big mouth. I was working with a Russian university. We had established a distance-learning platform for Uzbek children. But not everyone liked what we were doing. So it happened I lost my job and could not find another one.”

Professor Kimsanbayev was forced to go to Russia to work as an ordinary migrant worker. An acquaintance in Volgograd hired him to work for his company, to “make some moves,” as Kimsanbayev puts it.

“The helter-skelter was not my thing, and I went and got a job at a construction site. I was an ordinary unskilled laborer, along with other men from my country. I don’t see anything shameful about working with my hands. If I have to, I’ll wash floors. Or work on building the stadium.”

Chance brought Kimsanbayev together with good people who took him to Volgograd State Agricultural University. After a long interview with the rector and after he supplied the university with his academic credentials, Kimsanbayev was appointed a lecturer in the agricultural technology department. Realizing the worth of their new faculty member, the university rented a flat for him. He was given the chance to do what he does best: experiment with cotton.

Not Just Cotton Wool

The first year, Kimsanbayev planted only 25 acres. The professor did everything himself in a field the size of four typical dacha plots. He sowed it, plowed it, watered it, and did battle with weeds and pests. Many people doubted the seeds would sprout.

“I brought an international collection of cotton seeds to Volgograd: 97 varieties from all the cotton-producing countries, from Latin America, the US, China, India, and so on. I selected 25 varieties, which sprouted in the local climate. I narrowed these down to three varieties. That is how we arrived at an ultra-early ripening cotton in Volgograd, a variety that matures between April and September.”

The following year, the experimental cotton field had grown to eight hectares. To help him with the work, Kimsanbayev hired Uzbek agronomists and encouraged the university’s students to join them. The outcome: not only did the cotton seeds sprout, but the field turned into a white carpet in due time.

“As they say, I woke up famous one day. Reporters and local officials came to see me in the field. Now everyone believed Volgograd cotton was a reality. However, we are faced with other problems. We have to convince farmers it is worth growing cotton, that the crop is economically profitable: the price of one kilo of raw cotton is equal to the price of thirty kilos of wheat. In addition, we need specialist agronomists. So, basically, I promote cotton and, of course, train students. I don’t work alone. Several scientists, including Igor Podkovyrov and Taisiya Konotopskaya, have been working on cultivating new varieties with me and training specialists.”

Kimsanbayev now heads the university’s Center for Applied Genetics, Selective Breeding, and Cotton Seed Production. In total, 109 hectares were planted with cotton this year.

Oybek Kimsanbayev in the lab. Photo by Alina Desyatnichenko for Takie Dela

Kimsanbayev says that Allah loves him. Otherwise, he would not have sent him so many trials and so many people, willing to help him just like that, without asking anything in return.

“There have been deplorable circumstances when my life was not worth a penny. Yet people helped him. But there are things I really regret. I once behaved disgracefully and therefore moved away from my family. So the burden of guilt would not drag me down, I simply shoved off to Russia, frankly. That is why I have worked so hard, so that, down the line, my family—my dad, my brother, my wife and our three children—would be proud of me. That is my own real goal in the work I do.”

“What did you do that was disgraceful?”

“I don’t want to talk about it.”

“When was the last time you were in Tashkent?”

“I constantly have meetings and business trips. My schedule is crazy. I just got back from Astrakhan, where the region’s governor and I discussed a plan for sowing 200 hectares of cotton in the spring. I haven’t been home for four months.”

Kimsanbayev suddenly falls silent. The expression on his face changes noticeably when the conversation turns to family and children. His eldest daughter and son are seventeen and sixteen, respectively, while his youngest son is five.

“I miss them, of course. I’m really afraid of losing my family due to my work.”

“Why don’t you move them to Volgograd?”

“Where would I put them? In a rented flat on a monthly salary of 27,000 rubles [approx. 390 euros]? Listen, your questions are making me depressed, and it’s raining outside as it  is.”

Later, Kimsanbayev confesses he bought tickets for home right after our interview.

Potatoes on Mars

The cotton harvest is nearing completion in the university’s experimental field. The agronomist Bahadir or, as he introduces himself, Boris, specially recruited from Tashkent for the experiment outside Volgograd, shows me how to pick cotton. It is fairly straightforward. You pull the fiber from the boll. If it gives, you keep pulling until you have all the white cotton in your hand.

University students help pick the cotton. The white caps from the cotton plants are quickly deposited into sacks. Soft as a cat’s paw, the fiber is pleasant to the touch. The softness is a small reward for one’s efforts. Pulling the cotton from the boll without being pricked is nearly impossible.

A student from Volgograd State Agricultural University picks cotton. Photo by Alina Desyatnichenko for Takie Dela

There are several unusual rows on the edge of the large field. The cotton there is not white, but dirty yellow and brownish green. It transpires that this year the Volgograd researchers bred a special variety of colored cotton. Someone joked the military ordered green cotton for sewing its uniforms.

Since Oybek Kimsanbayev joined its faculty, Volgograd State Agricultural University became the only university in Russia where cotton scientists are trained.

“Do you know how I enticed students into studying cotton? I said they would be rare specialists, and they would especially in demand abroad. But I hope, nonetheless, that Russian farmers realize the crop is quite profitable economically. This year, for example, there was overproduction of wheat in southern Russia. Farmers cannot sell the grain at a good price, while there is simply nowhere to store such yields. Consequently, they are making a loss. And this isn’t the first year we’ve seen this scenario. So, farmers need to switch to other crops, including non-traditional crops. Cotton could be one of those crops.”

“Where else in Russia could cotton be grown?”

“Currently, Volgograd Region is the northernmost area in the world where cotton is planted. The crop could be planted farther south, in Astrakhan, Kalmykia, Stavropol, and Krasnodar. Just imagine, in Volgograd Region, in one of the districts along the Volga River there are one and a half million hectares of cropland lying fallow. If you sow all that land with cotton, and the yield from one hectare is around one ton, Russia could reshape the world cotton market. It would simply crash it. Russia would not be dependent on imported cotton, which is especially vital given ongoing western sanctions and Uzbekistan’s refusal to export raw cotton to Russia. The really funny thing is that cotton was once grown in these parts. However, the technology was lost over the last decades. So now we folks at the university are once again developing techniques for cultivating cotton and breeding new varieties.”

The harvested cotton is loaded into a trailer for the journey to the warehouse. Photo by Alina Desyatnichenko for Takie Dela

The cotton from the experimental field is of very high quality. Its quality has impressed the local textile mill and a Moldovan company, almost the only full-cycle plant in the CIS where raw cotton is processed and fabric produced. It is they who are hurrying the researchers in Volgograd to breed varieties that would yield 3,000 kilos a hectare.

“Next year, six times more cropland will be sown with cotton seed in Volgograd Region alone: 630 hectares. Plus there will be 200 hectares in Astrakhan Region. We are negotiating with Kalmykia. We provide scientific support to all the farmers. Recently, at an ag expo in Moscow, I spoked with your agriculture minister, Alexander Tkachov. He told me a program for supporting cotton growing in Russia was in the works. I think the availability of state support would ultimately convince farmers to take up cotton.”

“Do industrialists try and recruit you? The salaries are definitely higher in industry than at a regional university.”

“I’ve had offers. But I turned them down. I would have to work as an agronomist or seed cultivator whose job would be to increase gross crop yields. I don’t find that interesting. I’m a scientist. I’ve created a variety, I’ve let it go to work, and I’ve set myself a new goal.”

“Do you have a new goal?”

“I do. Roughly speaking, our project aims to study alternative crop production. Meaning that we cultivate crops in places where they usually don’t grow. Have you seen the movie The Martian, in which an astronaut grows potatoes? They took the idea from reality. Thirty years ago, the Soviet cosmonaut Vladimir Dzhanibekov was the first person to grow cotton in outer space. My objective is to cultivate varieties of different crops that would adapt to all natural conditions, so that no amount of frost could damage them. I have proven this is possible. However grandiloquent it might sound, the job of farmers is to feed the world. If plants can yield crops under any conditions, imagine how that would change a country’s economy.”

The agronomist Bahadir shows off Volgograd’s know-how: colored cotton. Photo by Alina Desyatnichenko for Takie Dela

Cotton is the only crop that has several sets of genetic chromosomes. That is why it is perfect for different experiments.

“How do they relate to your work and success in Uzbekistan? Are they kicking themselves for letting such a valuable employee go?”

“I don’t know whether they’re kicking themselves. But I have been offered a prestigious job and a high post. I’m not ready to go back yet.”

Translated by the Russian Reader

Annals of Import Substitution: Ricotta Days

Because of the severe if not crippling margarine deficit in this district of the ex-capital of All the Russias, I have been reduced to buttering my toast with ricotta.

Pictured, above, is Unagrande Ricotta, my preferred brand, and the brand all the shops in my neighborhood (half of which are Dixie chain supermarkets) seem to have in stock all the time, suddenly.

Despite the Italian-sounding name, however, and Unagrande’s cutesy-pie Italian-tricolor-as-heart logo, it is manufactured not in Italy, which as an EU member, is subject to Putin’s anti-sanctions against the import of most EU produce to Russia.

What has bitten Russian taste buds especially hard has been the sudden absence of decent cheese, which, before the Putin regime decided to rule the world, had been imported to Russia in large quantities, mostly because the majority of domestic Russian cheeses were neither particularly tasty nor plentiful.

Crimea-is-oursism changed all that.

Russians traveling abroad now consider it their patriotic duty to stock up on cheese before heading back to the Motherland, where they will consume it with relish themselves or, since Russians like to share, to divvy up among their friends or have a cheese-tasting party. Likewise, Europeans welcoming friends from the Motherland have been known to serve their country’s finest cheeses before and after dinner.

There are even black market Estonian and Finnish cheese outlets, practically operating in broad daylight, in the farther flung corners of the city. A friend of mine has bought such zapreshchonka (banned goods) in these establishments, usually housed in inconspicuous kiosks, on several occasions.

No, my daily ricotta is produced not in Italy, as the name and the packaging insistently suggest, but at 130 Lenin Street in the town of Sevsk, in the far western Russian region of Bryansk.

Despite its exalted status as the new ricotta capital of Russia, Sevsk is a modest town whose population, according to the 2010 census, was 7,282.

To their credit, however, the Sevskians produce their delectable Unagrande Ricotta from whey, pasteurized cream, and salt. That’s it.

Unagranda Ricotta contains zero percent of the detestable and environmentally ruinous palm oil that other Russian cheese manufacturers have pumped into their cheeses, also bearing European-sounding names, to make up for real milk and cream, which have been in short supply and are more expensive, of course.

So I doff my cap to the honest dairy workers of Sevsk, who have managed to produce a delightful 250-gram tublet of perfectly edible and utterly non-counterfeited ricotta, which sells for 144 rubles (a bit over two euros) at my local Dixie.

I would still like to know, however, what has happened to all the margarine. TRR

Image courtesy of planetadiet.com

Today’s Sponsored Post

“Government of St. Petersburg. Import Substitution and Localization Center. Rosa, 941-6453. Made by Us, Made for Us. Open Your Own Office at the Import Substitution and Localization Center. www.importnet.ru. Lenexpo, Pavilion No. 4.” Photo by the Russian Reader

Since I have to pay the bills like any other tiresome kvetcher and blogger, today’s post is sponsored by the Petrograd Import Substitution and Localization Center, and by lonely Rosa, who can be reached at the telephone number listed above.

Remember, whatever it is you need, cheese or sex, keep it local! Don’t import when you can make it yourself!

__________

Landwehr Canal, Berlin

The canal where they drowned Rosa
L., like a stubbed out papirosa,
Has almost virtually gone wild.
So many roses have moldered since that time,
It is no mean feat to stun the tourists.
The wall, concrete forerunner of Christo,
Runs from city to calf and cow
Through fields blood has scoured.
A factory smokes like a cigar.
And the outlander pulls up the native gal’s
Frock not like a conqueror,
But like a finicky sculptor,
Getting ready to unveil
A statue fated to live a while
Longer than the reflection in the canal
Where Rosa was canned.

Source: Radio Svoboda. Translated by the Russian Reader