Russia-Billions invested in beef industry.

RUSSIA-DOCTOR,DOCTOR HEAL THY SELF.

Russia has spent the equivalent of $8 billion during the past four years to import breeding cattle and establish a beef and milk industry, but has precious little to show for it.

Last year, Russia produced a scant half of the three million tonnes of beef consumed by the country’s 140 million people, and domestic production was down significantly from 2000.

National milk production was up only one per cent from 2007. This risible performance has sparked a lively debate in Russia because since 2005 the federally financed program has imported 100,000 breeding cattle from Australia, Europe and elsewhere. (Canada and the U.S. were only late contributors because of mad cow disease.)

These beasts were meant to provide the foundation for the development of a national herd of dairy and beef cattle that would make Russia not only self-sufficient in meat and milk products, but an exporter as well.

But now politicians and public commentators are asking how could so much money be spent on so many supposedly healthy breeding cattle with so little to show for it?

Russia has spent the equivalent of $8 billion during the past four years to import breeding cattle and establish a beef and milk industry, but has precious little to show for it.

Last year, Russia produced a scant half of the three million tonnes of beef consumed by the country’s 140 million people, and domestic production was down significantly from 2000.

National milk production was up only one per cent from 2007. This risible performance has sparked a lively debate in Russia because since 2005 the federally financed program has imported 100,000 breeding cattle from Australia, Europe and elsewhere. (Canada and the U.S. were only late contributors because of mad cow disease.)

These beasts were meant to provide the foundation for the development of a national herd of dairy and beef cattle that would make Russia not only self-sufficient in meat and milk products, but an exporter as well.

But now politicians and public commentators are asking how could so much money be spent on so many supposedly healthy breeding cattle with so little to show for it?

There is a host of answers, which together add up to a model of how not to embark on a sectoral stimulation program.

First is that Russia has little cultural history in beef production, and no groundwork was done to prepare Russian farmers for what is involved in developing a national beef herd in the modern world of high-tech agriculture.

Then, Russian beef market operators point out that farmers are used to dealing with chickens and pigs, where the payback time on stock development projects is considerably shorter than the six- to eight-year cycle involved in developing a viable and profitable beef or dairy herd.

In addition, even within the cattle business, Russian farmers have always considered beef cattle a secondary and inferior business to dairy herds.

Russia being Russia, of course, a significant amount of the $8 billion Moscow fed into this project never got to the farming operations to which it was directed. A good deal got side-tracked into the pockets of swarms of intermediaries.

And when prime imported breeding stock did start arriving in 2006 and onwards, few people had put much thought or work into what to do with them.

Proper cow byres had not been constructed; there had been no significant training of the people who were to look after and nurture the breeding stock; and even a guaranteed supply of suitable feed has not been assured.

Even when the question of housing the cattle has been addressed in advance, there is only a small number of companies in Russia that have the expertise and equipment to build modern cow byres. This market dominance has given some of them the confidence to demand prepayment for their work, which in these times of crunched credit has snagged some of the projects into total stagnation.

The bias among Russian farmers toward dairy cattle also meant that they tended to concentrate on getting money back from milk production and did not take the long-term view of using these assets to improve the country’s genetically impoverished national herd.

But Russian farmers and officials insist they are not entirely to blame for the sad showing of this program. They insist some of the countries they have been dealing with have been playing them for suckers and sending them sick and inferior cattle.

Of the first 85,000 breeding cows imported, they say, 15,000 had to be put down because of illness.

The Australians have come in for particular criticism, which may not be entirely fair because the export of live cattle is a billion-dollar business in Australia. Producers pride themselves on only sending out top-quality cattle and tending them with qualified stockmen and veterinarians during their voyage to their new homes.

But Russian officials contend cattle from Australia have consistently been underweight. One shipment apparently arrived with 60 per cent of the cattle infected with leptosirosis, and another turned up at the Black Sea port of NovoRossick with half the animals dead. Moscow also carps that the Australians did not supply Russia with the equipment needed to make use of the information chips implanted in the cattle’s ears.

Moscow has not given up on the cattle project, however.

Two weeks ago, Deputy Prime Minister Victor Zubkov announced a new approach. Moscow is going to put up the equivalent of another $2.6 billion to provide small family farms with milk herds of about 100 animals with the aim of supplying local markets.

It’s more limited, but sounds a more sensible approach.