Belarus: Agriculture Market Overview
Belarus is a state in Eastern Europe. As part of the former Soviet Union, Belarus had a relatively well-developed, though aging industrial base; it retained this industrial base - which is now outdated, energy inefficient, and dependent on subsidized Russian energy and preferential access to Russian markets - following the breakup of the USSR. The country also has a broad agricultural base which is largely inefficient and dependent on government subsidies. After an initial burst of capitalist reform from 1991-94, including privatisation of smaller state enterprises and some service sector businesses, creation of institutions of private property and development of entrepreneurship, Belarus' economic development greatly slowed. About 80% of all industry remains as state property and foreign investment has been hindered by a climate hostile to business.
Farms structure changes
Belarus is generally characterized as a slow reformer compared to other CIS countries. Agricultural land remains state-owned, except for the land in the small household plots that has been privatized by special legislation. Nevertheless, the share of traditional collective and state farms in agricultural land decreased from 94% in 1991 to 86% in 2015 as nearly 1 million hectares moved to family farms in the process of transition reforms. The number of so-called peasant farms, which began to emerge alongside the traditional household plots since 1991, reached 2,482 in 2015. The share of the agricultural enterprises in 2015 has decreased by 10% and the share of peasant farms has increased by 17% since 2011. There is a notable specialization on key product groups between types of farms. Crop production that can strongly benefit from efficiency gains through scale (i.e, cereals, flax, sugar beet) and animal production that requires considerable investments in infrastructure and machinery (dairy and pigs, also poultry) is mainly undertaken on large agricultural enterprises, whereas labor intensive products, such as potatoes, vegetables are produced on peasant farms. Private farms have negligible shares, but tend to follow the pattern of peasant farms.
Soil fertility management and marketing are among the key technical and managerial challenges facing agricultural producers in Belarus. Agricultural land in Belarus has historically been known to provide much less favorable conditions than the Chernozems (black soils) in neighboring Ukraine, Russia, and Kazakhstan. Agricultural production therefore requires particular attention and investments into building and maintaining soil fertility with specific regard to organic matter content. While large commercial farms are constrained by their limited managerial freedom to react to market signals, small private farms face particular issues related to marketing.
The territory of Belarus is 207,600 kha of which total agricultural area at the beginning of 2015 represented 8,632 kha. The structure of Belarusian economy is characterized by domination of state property in all spheres.
Agrarian production consists of two main branches, namely plant growing (55%) and animal farming (45%). Agriculture is mainly focused on satisfying the needs of the domestic market. Agriculture in Belarus is a reducing sector of the Belarusian economy.
Agriculture makes up 7.5% of national GDP and provides employment of more than 9.7% of the population. The Agricultural sector specializes mainly in cereals which represents 40% of the sowing area.
By individual crop this equates to: wheat – 745 kha, triticale – 528 kha, barley – 552 kha, rye – 323 kha, oats – 152 kha, rape - 414 kha, potatoes - 310 kha, sugar beets - 106 kha, flax - 48 kha, meat and dairy production. Nevertheless, Belarus associates more with potato production which is due to the high demand and consumption of it by the the domestic market. From the data provided by Food and Agriculture Organization Belarus takes second place after Poland for the amount of area sown with triticale (528 kha) and takes fifth place in the world for the amount of area sown with rye (323 kha). Belarus also takes eight place in the world for the amount of area sown with potatoes.
In livestock farming, predominantly the breeding of cattle, pigs, poultry, milk and dairy products, there have been no major shifts in the number of animals between collective and family farms since independence: the family farm sector (mainly households) controlled 11%-16% of the total cattle breeding and 30% – 40% of the number of pigs.
From 2005 till 2010 a governmental program of village revival and development was actioned. In 2007, as part of the program, over $2,5 billion was spent on the agricultural sector development, but the effect was limited and even the government had to admit that. Despite that fact, the program wasn’t stopped. During first three years 666 agro-towns were built with all the necessary infrastructure. Up until 2008 the level of grants reached 60%, whereas the world norm is between 20-30 %. Experts claim that the biggest problem which really stops agriculture development is the absence of private ownership of land. One more thing that could be done to improve agriculture is to launch bankruptcy proceedings of unprofitable enterprises, which, however, is not done by the government for ideological reasons.
Project Manager AMIS
Kleffmann Group Ukraine