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Barents Region moo-ving down the agricultural vortex

Food production in the Barents Region is becoming more dependent on external supply.

A declining number of cattle brings economic challenges to the fore in the Barents Region. While Norway may be facing job loss in its second largest mainland business, Russia struggles to preserve post-sanctions food supply.

Location

Figures from Patchwork Barents show a declining trend in the number of cattle in the Barents Region. For example, in the period 1999-2012 the number of cattle went down with almost one-third in Troms County (see visualizations below the story). 

Decline in the Norwegian counties was far less dramatic than in other parts of the Barents Region. The biggest changes in cattle husbandry were observed in Northwestern Russia. In Arkhangelsk Oblast, the number of cattle had dropped over 84 percent between 1990 and 2013.  

The largest cattle population has been registered in Northern Ostrobothnia, Finland. Here, the number of cattle has been relatively stable, and significantly higher than in the rest of the Barents Region. About 134,000 livestock units were registered in Northern Ostrobothnia in 2014.

Nenets AO has the lowest number of cattle in the Barents Region, around 680 livestock units (2013). 

Milk covers beef
According to the Norwegian Agricultural Authority, the declining cattle production can be explained by a fall in dairy cattle production. 

“While the number of dairy cattle is decreasing, the amount of milk each cow produces has increased. A shortage of milk in the recent years has led to an extension of milk quotas. This means that dairy cows are held for a longer period before they are slaughtered, so that they can produce more milk,” the authority writes on their website.

Nortura (Norwegian agricultural cooperative for meat processing) adds that the reason behind a declining cattle and beef production is weak economy in the sector. 

EU dependency and job loss
Norway is highly dependent on meat imports from the EU. Nearly twenty percent of the beef currently sold in Norway is imported from the EU, in large part from Germany. 

While EU’s total beef export fell in the first quarter of 2012, export to Norway increased, making Norway EU’s third largest import market for beef (after Russia and Turkey). 

CEO of Nortura, Arne Kristian Kolberg, underlined in the company’s newsletter that the decline in beef production has serious consequences for Norwegian meat industry.

“A further decline will lead to a reduced value creation and job loss in the Norwegian food industry”.

Nortura has decided to deal with the economic challenges by restructuring the national meat industry. As a result, several slaughterhouses, including some in Northern Norway, will most likely be closed, E24 reports. There is little detailed information on the topic, but Nortura is certain that there will be a reduction of jobs.

The industry currently employs 45,000 people and is Norway’s second largest mainland business. 

The number of cattle in Arkhangelsk Oblast has decreased by over 84 % between 1990 and 2013.

Russia struggling to keep in line
A substantial fall in cattle husbandry has been registered in Arkhangelsk Oblast during the last 23 years. The number of cattle went down from 138,200 cows in 1990 to 21,950 in 2013 (- 84 %).  

Production of bovine animals in Russia is not as well developed as pig-breeding or poultry, Neva Product reports. This makes Russia dependent on beef imports. Russia currently imports over fifty percent of its beef consumption (58.9% in 2013, according to the federal database Fedstat). This share has risen by ten percent since 2005. Russia rarely imports fresh beef. For the most part the meat is imported frozen, which makes the fresh product an exclusive delicacy.

The Minister of Agriculture and commerce of Arkhangelsk region, Dimitry Karelsky, confirms to the Regional Government’s press center that the Russian meat market relies on its meat imports. 

“The Russian food market remains dependent on the global situation in many sectors where there is no significant internal counterweight to imports. These sectors include almost the entire meat market,” says Karelsky.

This dependency has become increasingly evident after Russia imposed sanctions on EU-US imports. The prices on beef are rising. In September, Arkhangelsk Oblast registered an increase of 2.3 percent. It is hard to predict whether a strengthened cattle production could stimulate Russia’s self-sufficiency on the food market anytime soon. 

Experts have not given the Russian domestic meat production an optimistic forecast. Meatinfo points out that “negative dynamics was observed in this industry for too long, so increase of production indices is slow.”

Arkhangelsk turning eastwards for support
Governor of Arkhangelsk Oblast, Igor Orlov, reported to RIA Novosti that the region is ready to seek cooperation with Asia and East Europe in order to strengthen the post-sanctions import. 

“We are strongly counting on the good connections that we have established with our closest partners – I would call them good cross-regional and international relations with Armenia and the Pridnestrovian Moldavian Republic.”

Furthermore, Arkhangelsk aims to develop import substitution industrialization, which involves improving regional production and attracting investors to regional agriculture.