Required Report - public distribution

**Date:** 2/10/2005

**GAIN Report Number:** RS5011

RS5011

**Russian Federation**

**Planting Seeds**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Randall Hager

U.S. Embassy

**Prepared by:**

Yelena Vassilieva and Dorothy Adams

**Report Highlights:**

The majority of planting seeds used in the Russian Federation continue
to be \"saved\" seeds or seeds that farmers simply save from the
previous year. The use of imported seeds is increasing, but only in the
sectors in which vertical integration is common. After a period of
uncertainty connected with the administrative reform of the Ministry of
Agriculture, the Federal Service for Veterinary and Phytosanitary
Surveillance assumed control of all seed testing and registration.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[Production 3](#production)

[Table 1. Grain Crop Yields by Regions: Production in Metric Tons per
Hectare of Planted Area
3](#table-1.-grain-crop-yields-by-regions-production-in-metric-tons-per-hectare-of-planted-area)

[Seed Supply: Production and Trade by Commodities
4](#seed-supply-production-and-trade-by-commodities)

[Table 2. Yields by Selected Crop, Metric Tons per Harvested Hectare
4](#table-2.-yields-by-selected-crop-metric-tons-per-harvested-hectare)

[Wheat 4](#wheat)

[Chart 1. Imports of Wheat and Meslin Planting Seeds by Months, Metric
Tons
5](#chart-1.-imports-of-wheat-and-meslin-planting-seeds-by-months-metric-tons)

[Barley 5](#barley)

[Table 3. Imports of Barley Planting Seeds (HS Number 1003 00 10),
Calendar Years 2000-2004, Metric Tons
5](#table-3.-imports-of-barley-planting-seeds-hs-number-1003-00-10-calendar-years-2000-2004-metric-tons)

[Rye and Oats 6](#rye-and-oats)

[Corn 6](#corn)

[Table 4. Corn Seed Imports, by Type, CY 1997-2002, Jan. -- Nov. 2003,
Metric Tons.
6](#table-4.-corn-seed-imports-by-type-cy-1997-2002-jan.-nov.-2003-metric-tons.)

[Table 5. Corn Seed Imports (HS Number 1005 10), by Country, CY
1997-2002, and Jan.-Nov. 2003, Metric Tons
7](#table-5.-corn-seed-imports-hs-number-1005-10-by-country-cy-1997-2002-and-jan.-nov.-2003-metric-tons)

[Seeds of other grains 7](#seeds-of-other-grains)

[Sunflower seeds 7](#sunflower-seeds)

[Table 6. Imports of Planting Seeds of Sunflowerseeds (HS Number 1206 00
10), Metric Tons
8](#table-6.-imports-of-planting-seeds-of-sunflowerseeds-hs-number-1206-00-10-metric-tons)

[Seeds of Soybeans and Other Oilseeds
8](#seeds-of-soybeans-and-other-oilseeds)

[Table 7. Imports of Seeds of Soybeans (HS Number 1201 00 10), Metric
Tons, Calendar Years
9](#table-7.-imports-of-seeds-of-soybeans-hs-number-1201-00-10-metric-tons-calendar-years)

[Vegetable seeds 9](#vegetable-seeds)

[Table 8. Imports of Seeds of Vegetables, except red beet and peas (HS
Number 1209 91), Metric Tons, Calendar Years
9](#table-8.-imports-of-seeds-of-vegetables-except-red-beet-and-peas-hs-number-1209-91-metric-tons-calendar-years)

[Seeds of Horticultural Crops 10](#seeds-of-horticultural-crops)

[Sugar Beet Seeds 10](#sugar-beet-seeds)

[Table 9. Imports of Sugar Beet Seeds (HS Number 1209 10), Calendar
Years, Metric Tons
10](#table-9.-imports-of-sugar-beet-seeds-hs-number-1209-10-calendar-years-metric-tons)

[Seed Potatoes 11](#seed-potatoes)

[Table 10. Imports of Seeds of Potato (HS Number 0701 10), Calendar
Years, Metric Tons, by Country
11](#table-10.-imports-of-seeds-of-potato-hs-number-0701-10-calendar-years-metric-tons-by-country)

[Fodder Grass Seeds 11](#fodder-grass-seeds)

[Trade 12](#trade)

[Table 11. Imports of Planting Seeds, Calendar Years, Metric Tons
12](#table-11.-imports-of-planting-seeds-calendar-years-metric-tons)

[Tariffs 13](#tariffs)

[Table 12. Import Tariffs for Planting Seeds
13](#table-12.-import-tariffs-for-planting-seeds)

[Policy 13](#policy)

[Patent Rights 13](#patent-rights)

[Local grain seeds subsidies 14](#local-grain-seeds-subsidies)

# 

# Production

The grain industry constitutes the largest share of the plant production
industry, and therefore, grain seeds make up the main share of the
planting seeds sector by volume. The majority of seeds used are "saved
seeds" or seeds that farmers simply save from the previous year. These
seeds are not improved in any way and this is one of the main reasons
that weather continues to be the major factor in production and
fluctuations in yields.

## Table 1. Grain Crop Yields by Regions: Production in Metric Tons per Hectare of Planted Area

  ------------------------- ------ ------ ------ ------ ------ ------ ------ --------
                            1997   1998   1999   2000   2001   2002   2003   2004\*

  Russia, total             1.65   0.94   1.17   1.44   1.80   1.80   1.58   1.79

  Central Federal District  1.73   1.27   1.08   1.56   1.91   2.06   1.90   1.99

  N.-W. Federal District    1.21   0.95   0.73   1.30   1.37   1.21   1.35   1.76

  Southern Federal District 1.92   1.34   1.88   2.08   2.54   2.70   1.93   2.89

  \- Krasnodar Kray         3.08   2.41   3.37   3.45   3.79   4.09   2.89   4.08

  \- Stavropol Kray         2.01   1.92   1.89   2.10   2.56   3.14   2.07   3.20

  \- Rostov oblast          1.54   1.21   1.43   1.63   2.27   2.34   1.51   2.70

  \- Volgograd oblast       1.42   0.45   0.66   1.17   1.64   1.56   1.45   1.87

  Volga Valley Federal      1.88   0.62   1.04   1.26   1.59   1.59   1.60   1.46
  District                                                                   

  \- Bashkortostan Republic 1.99   0.66   1.32   1.27   1.58   1.86   2.32   2.25

  \- Tatarstan Republic     3.51   1.15   1.62   2.13   3.23   3.19   3.15   2.51

  \- Orenburg oblast        1.37   0.33   0.99   1.00   0.99   1.01   0.95   0.79

  \- Samara oblast          1.86   0.45   1.11   1.25   1.56   1.50   1.42   1.13

  \- Saratov oblast         1.85   0.39   0.86   1.11   1.25   1.42   1.42   1.49

  Ural Federal District     1.64   0.77   1.39   1.09   1.49   1.27   1.40   1.03

  Siberian Federal District 1.05   0.96   0.90   1.26   1.56   1.31   1.13   1.32

  \- Altay Kray             0.58   0.89   0.73   1.29   1.31   1.28   0.95   1.05

  \- Krasnoyarsk Kray       1.80   1.39   1.24   1.61   1.91   1.62   1.81   2.07

  \- Novosibirsk oblast     1.26   0.95   0.99   1.53   1.88   1.41   1.05   1.34

  \- Omsk oblast            1.18   0.76   0.90   0.97   1.99   1.34   1.26   1.44

  Far-Eastern Federal       0.92   0.94   0.75   0.64   0.86   1.31   0.86   0.89
  District                                                                   
  ------------------------- ------ ------ ------ ------ ------ ------ ------ --------

\* Preliminary data.

Note: Total planted area is the sum of winter and spring planted area
and includes any re-planted sown areas.

Source: State Statistical Committee of the Russian Federation

# Seed Supply: Production and Trade by Commodities

There is no official data on planting seed production, availability, and
distribution by type of seed and by region. Therefore, Post uses data
from non-official sources, combined with State Customs trade data.

## Table 2. Yields by Selected Crop, Metric Tons per Harvested Hectare

  -------------- ----------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
  Crop           1991-1995   1996-2000   1997   1998   1999   2000   2001   2002   2003   2004
                 (avg.)      (avg.)                                                       

  Wheat          1.61        1.59        1.84   1.35   1.57   1.61   2.06   2.07   1.78   1.88

  Rye            1.56        1.50        1.92   1.02   1.47   1.58   1.88   1.90   1.86   1.54

  Barley         1.55        1.55        1.76   1.38   1.43   1.67   2.01   1.97   1.96   1.80

  Oats           1.24        1.36        1.61   1.18   1.13   1.47   1.71   1.56   1.68   1.51

  Corn           2.52        2.24        3.13   1.63   1.97   2.12   1.79   2.83   3.25   4.06

  Millet         0.19        0.90        1.27   0.84   0.93   0.82   0.79   0.85   1.39   1.19

  Buckwheat      0.45        0.60        0.68   0.57   0.59   0.69   0.54   0.54   0.82   0.75

  Rice           3.49        2.82        2.34   3.04   2.74   3.49   3.49   3.74   3.17   3.76

  Peas and       1.16        1.29        1.46   1.12   1.07   1.42   1.79   1.59   1.48   1.62
  Pulses                                                                                  

  Sunflowers     0.99        0.77        0.79   0.70   0.74   0.90   0.78   0.98   1.00   1.02

  Soybeans       0.88        0.84        0.88   0.78   0.76   0.81   0.84   0.89   0.98   NA

  Rapeseed       NA          0.64        0.62   0.63   0.65   0.66   0.68   0.72   0.98   NA

  Sugar beets    17.8        15.8        14.8   13.4   16.9   18.8   19.9   21.9   22.7   27.6

  Potato         8.8         10.5        11.1   9.7    9.7    10.4   10.9   10.3   11.6   11.5

  Vegetables     13.8        14.0        14.1   13.4   14.3   14.5   15.5   15.2   16.9   1.69
  -------------- ----------- ----------- ------ ------ ------ ------ ------ ------ ------ ------

Source: State Statistical Committee of the Russian Federation

## Wheat

Wheat production in 2004 increased by 11.2 million metric tons (mmt) due
to high yields of winter wheat in the southern part of the country.
On-farm stocks of seeds are higher this year, but the quality has not
changed and the 2005 crop will again depend, first of all, on weather.
Data on the share of saved seeds in the total stock of available seeds
is not available and although some regions report improvements in the
quality and condition of seeds, most of the 6.3 -- 6.4 mmt demand for
seeds will be met by farmer's "saved" seeds. Imports of wheat and meslin
planting seeds for spring planting increased sharply (mostly from
Kazakhstan) after the low 2003 crop. In January-November 2004, Russia
imported 49,648 metric tons of wheat seeds, including 48,985 metric tons
from Kazakhstan, 284 metric tons from Germany, 233 metric tons from
Lithuania, and 113 metric tons from Poland.

## Chart 1. Imports of Wheat and Meslin Planting Seeds by Months, Metric Tons

![](media/image2.wmf)

# 

# Barley

The 2004 barley crop decreased by 768,000 metric tons, or four percent,
to 17.2 mmt. The demand for barley seeds is estimated at 2.75 mmt a year
and despite decreased production, the supply of "saved" seeds will be
enough for the production of feed barley, which constitutes the bigger
portion of the crop. Increasing production of beer and growing domestic
production of malt raised demand for good quality malting barley seeds.
However, the high Euro/Ruble exchange rate made direct imports of seeds
from France more expensive than a year ago, and importers switched to
less expensive seeds from other countries. Domestic research and
breeding of malting barley seeds is improving and given the high value
of the Euro, imports of barley seeds in 2005 are not expected to exceed
3,000 metric tons.

## Table 3. Imports of Barley Planting Seeds (HS Number 1003 00 10), Calendar Years 2000-2004, Metric Tons

  ---- ------------------- --------- --------- --------- --------- ---------
                           2000      2001      2002      2003      Jan-Nov
                                                                   2004

                                                                   

       \--The World\--     1 758.7   96.7      282.1     3 131.7   1 870.4

  1    France              39.7      0.0       93.0      2 127.5   0.0

  2    Germany             59.0      62.2      183.5     344.0     149.9

  3    Lithuania           0.0       0.0       0.0       265.2     300.0

  4    Poland              0.0       0.0       0.0       245.0     589.0

  5    Denmark             0.0       0.0       0.0       58.0      0.0

  6    Other European      0.0       0.0       0.0       57.3      0.0
       Union                                                       

  7    Austria             0.0       0.0       0.0       34.7      28.1

  8    Ukraine             0.8       14.0      0.0       0.0       444.3

  9    Estonia             0.0       0.0       0.0       0.0       358.9

  10   Kazakhstan          1 634.3   0.0       0.0       0.0       0.0

  11   United Kingdom      0.0       0.0       0.0       0.0       0.3

       Other not mentioned 25.0      25.0      5.6       0.0       0.0
  ---- ------------------- --------- --------- --------- --------- ---------

Note: ranked by quantity in CY 2003

Source: State Customs Committee of the Russian Federation

## Rye and Oats

Rye production decreased by 31 percent and oats production decreased by
four percent in 2004. Rye is the second most important food crop in the
country and the significantly smaller crop means a larger percentage of
it will be "saved" for planting. However, these saved seeds will meet
total demand of approximately 750,000 metric tons. According to official
information from Tatarstan Republic, the main rye producer, a shortage
of good quality seeds may result in a lower crop next year and the use
of grain from the 2004 crop may decrease both yields of winter rye and
the quality of the grain. Production of oats was better and the demand
for seeds will easily be met by "saved" seeds. Significant improvements
in the quality of rye and oats seeds are not foreseen and these seeds
are not a priority for domestic seed breeding laboratories. Post does
not forecast any imports of seeds of rye and oats in 2005.

# Corn

Corn for grain production has been increasing from 0.85 mmt in 2001 to
3.46 mmt in 2004, with steadily increasing yields from 1.8 tons per
hectare in 2001 to more than four tons per hectare in 2004. Weather
played a significant role in achieving high yields in 2004, but the role
of improved seeds was also significant. Given the increasing demand for
corn, the demand for planting seeds is forecast to increase from 250,000
metric tons in 2004 to around 300,000 metric tons in 2005. The major
share of this demand will be met by local hybrids developed by seed
breeding institutes in southern Russia, but imports of corn seeds are
forecast to increase in 2005 to 8,000 metric tons.

## Table 4. Corn Seed Imports, by Type, CY 1997-2002, Jan. -- Nov. 2003, Metric Tons.

  ---------- ----------------------------- ------- ------- ------ -----------
                                           2001    2002    2003   Jan-Nov
                                                                  2004

             100510 SEED NOT SWEET CORN    8 805   5 153   5 465  6 489

  10051015   Simple hybrids                3 807   3 192   3 617  4 287

  10051013   Three cross hybrids           1 104   214     861    304

  10051011   Double hybrids and top cross  1 481   734     473    936
             hybrids                                              

  10051019   Other                         1 567   819     274    736

  10051090   Other                         846     194     239    226
  ---------- ----------------------------- ------- ------- ------ -----------

Source: State Customs Committee of the Russian Federation

## Table 5. Corn Seed Imports (HS Number 1005 10), by Country, CY 1997-2002, and Jan.-Nov. 2003, Metric Tons

  ---- ------------------- ------------ ------------ ----------- -----------
                           2001         2002         2003        Jan-Nov
                                                                 2004

       \--The World\--     8 805        5 153        5 464       6 489

  1    Ukraine             1 205        902          1 595       789

  2    Yugoslavia          2 665        1 209        1 331       2 018

  3    Hungary             387          753          987         1 340

  4    France              353          432          673         295

  5    Moldova             2 398        891          387         460

  6    Kazakhstan          1 584        858          177         341

  7    Romania             0            40           137         252

  8    United States       128          1            94          495

  9    Austria             0            1            25          112

  10   China               0            28           19          0

  11   Slovakia            0            0            18          99

  12   Croatia             5            0            13          10

  13   Germany             0            0            5           46

  14   Other European      9            39           0           0
       Union                                                     

  15   Canada              0            0            0           80

  16   South Africa        0            0            0           150

       Other               70           0            0           0
  ---- ------------------- ------------ ------------ ----------- -----------

Source: State Customs Committee of the Russian Federation

## Seeds of other grains

Imports of other seeds of grains were low and not included in customs
data. However, the creation of the company "Kuban-rice" in Krasnodar
(joint project of Razgylay-Ukros and the administration of Krasnodar
Kray) could mean increased investments in the improvement of domestic
seeds and technologies for rice production.

## Sunflower seeds

Sunflowerseed production has been growing during the last four years due
in part to better seeds. Yields grew from 0.7 tons per hectare in 1999
to 1.02 tons per hectare in 2004 and on some farms in the southern part
of the country, yields of commercial sunflowerseeds exceeded 1.5 metric
tons per hectare. Total demand for better quality seeds is growing along
with the demand for sunflowerseeds to fill expanding domestic crushing
capacity. Domestic breeders are working on improvements to native
varieties (especially to shorten the vegetation period and improve
resistance to diseases) in an effort to increase production in more
northern parts of the country. However, the majority of producers'
demand for good quality, high yielding seeds are still filled by
imports. Imports increased to 3,306 metric tons in 2004, a 32 percent
increase from the previous year, and imports from the U.S. constituted
over 25 percent of total imports. To some extent, imports from the U.S.
versus imports from the EU were stimulated by a favorable exchange rate,
but mutual research conducted by Russian and American breeders in this
field was also a factor.

## Table 6. Imports of Planting Seeds of Sunflowerseeds (HS Number 1206 00 10), Metric Tons

  ---- ------------------ --------- --------- -------- --------- -------------
                          CY 2000   CY 2001   CY 2002  CY 2003   Jan-Nov 2004

                                                                 

       \--The World\--    1 980.5   1 081.6   2 164.1  2 507     3 306

  1    Moldova            663.9     579.6     910.0    539       679

  2    Turkey             104.0     0.1       172.0    566       805

  3    United States      0.0       55.0      206.1    382       837

  4    Spain              77.5      121.5     33.6     333       108

  5    France             405.2     148.4     322.0    302       206

  6    Yugoslavia         113.0     93.2      93.3     185       196

  7    Romania            0.0       0.0       54.0     96        104

  8    Hungary            31.5      42.5      230.9    58        142

  9    Other European     0.0       34.9      64.1     39        16
       Union                                                     

  10   Ukraine            584.2     2.5       59.0     0         120

  11   Germany            0         0         0        0         70

       Other              1.2       3.8       19.2     6         23
  ---- ------------------ --------- --------- -------- --------- -------------

Source: State Customs Committee of the Russian Federation

## Seeds of Soybeans and Other Oilseeds

According to experts, Russia increased production of soybeans in the
European part of the country in 2004 by over 500,000 metric tons.
Imports of seeds of soybeans increased in 2003, but from only two
countries, the U.S. and China. All imported seeds of soybeans are
assumed to be conventional varieties, as planting of GMO seeds is not
allowed. Demand for soybeans is large and growing along with Russia's
intent to increase production of poultry, and, starting this year,
swine. However, a significant increase in seed imports is not forecast
due to official restrictions on GMO seeds.

Currently, some administrations allocate budgetary support for the
development of regional varieties of soybeans. This is likely the reason
why one of the biggest milk processors in Tatarstan decided to start
production of soybeans even though they have never been a traditional
product in Tatarstan. In the spring of 2004, the company purchased
super-elite and elite seeds of soybeans to grow on 1,000 hectares in 17
enterprises in six regions. The next step is to develop primary seed
production together with the Agricultural Institute of Tatarstan and the
association *Elite Seeds of Tatarstan.* After that, they plan to
increase the area planted to soybeans in the Republic to 20-25,000
hectares to produce commercial soybeans for soy protein and diet food
products. However, it is unlikely that this approach will lead to
increased commercial production of soybeans at the national level.

## Table 7. Imports of Seeds of Soybeans (HS Number 1201 00 10), Metric Tons, Calendar Years

  --- -------------- --------- --------- ---------- ---------- ----------
                     2000      2001      2002       2003       Jan-Nov 04

                                                               

      \--The         14                  5.5        217        161
      World\--                                                 

  1   China          14                  5.5        97         161

  2   United States  0                   0          120        0
  --- -------------- --------- --------- ---------- ---------- ----------

Source: State Customs Committee of the Russian Federation

Other oilseeds crops are produced from domestic varieties and any
imports are generally used by research and breeding institutes for
improvement of traditional domestic varieties on a temporary bases.

## Vegetable seeds

Production of vegetables continues to increase, mostly on private plots
and specialized farms. The list of vegetables produced in Russia has
expanded significantly and demand for a wider range of varieties and
types is increasing. \[Sources claim that a significant portion of
vegetable seeds may be imported by private companies under certificates
of conformity that are given to a certain company for a certain period
from a list of vegetable products or seeds and may not be captured in
official data.\] Official imports of vegetable seeds more than doubled
in 2004 to reach 1,050 metric tons mainly from the Netherlands, France,
and Germany.

## Table 8. Imports of Seeds of Vegetables, except red beet and peas (HS Number 1209 91), Metric Tons, Calendar Years

  ------ ----------------------- -------- -------- -------- -------------------
  Rank   Country                 2001     2002     2003     Jan-Nov 2004

         \--The World\--         443      476      442      1 050

  1      Netherlands             67       74       135      125

  2      France                  83       107      71       111

  3      Germany                 45       67       40       27

  4      Poland                  28       16       32       21

  5      Italy                   10       20       32       36

  6      Czech Republic          23       12       29       9

  7      Uzbekistan              41       16       20       33

  8      Moldova                 2        4        14       42

  9      Denmark                 38       13       10       13

  10     Hungary                 0        18       10       2

  11     United States           9        27       9        44

  12     Ukraine                 1        20       8        526

  13     Tajikistan              8        5        6        10

  14     New Zealand             35       35       5        1

  15     India                   0        0        5        3

         Other                   52       44       16       45
  ------ ----------------------- -------- -------- -------- -------------------

Source: State Customs Committee of the Russian Federation

## Seeds of Horticultural Crops

Trade in seeds of horticultural crops depends on domestic demand, but as
with trade in vegetable seeds, official customs data does not reflect
the genuine situation. The market of these seeds is expanding along with
growing domestic income.

## Sugar Beet Seeds

Imports of high yield seeds increased and sugar beet yields more than
doubled in 2004. The growth in yields was stable and the use of imported
seeds largely mitigated weather risks. Producers included as part of
vertically integrated chains with sugar refineries were able to fully
capture the benefits of imported seeds such as the high level of
germination and higher yields. However, this intensive integrated
production of sugar beets is limited to the southern part of the
country. Farmers who are unable to deliver sugar beets directly from the
fields to processors generally do not use imported seeds due to the
expense and they tend to incur losses during storage. According to
official information from Krasnodar Kray, by December 15, 2004, losses
during storage exceeded 160,000 metric tons (approximately three to four
percent of the crop). Along with the further development of vertical
integration, imported seeds with guaranteed higher yields will become
more attractive than domestic seeds, but in regions where vertical
integration is less developed, demand for domestic varieties that are
cheaper and better suited to local storage conditions will prevail.
According to unofficial data, the average price of domestic seeds varied
from 300 Rubles per kg to 400 Rubles per kg, while the price of imported
seeds is almost ten times higher.

Domestic demand for sugar beet seeds is estimated at 8,500 -- 9,000
metric tons and the share of imported seeds increased from approximately
ten percent in 2003 to sixteen percent in 2004. In January -- November
2004, half of the imported 1,487 metric tons of seeds came from Germany
and France. In 2005, imports of seeds will continue to increase along
with the development of vertical integration, but at slower pace, given
that the area for intensive production is limited.

## Table 9. Imports of Sugar Beet Seeds (HS Number 1209 10), Calendar Years, Metric Tons

  ------------- ------- ------- ------- ------- ------- ------- ------ ---------
                1997    1998    1999    2000    2001    2002    2003   Jan-Nov
                                                                       2004

                                                                       

  \--The        1 054   391     320     372     430     528     863    1 487
  World\--                                                             

  Germany       374     37      59      35      113     128     271    467

  Belgium       18      38      38      54      32      111     158    132

  Denmark       54      31      24      26      65      116     152    92

  France        125     64      71      18      96      102     113    255

  Kyrgyzstan    218     140     97      25      15      39      77     57

  Switzerland                                           4       47     0

  Yugoslavia    1       1       0       0       5       22      29     11

  European      0       0       0       0       8       0       16     163
  Union                                                                

  Lithuania     0       0       5       0       0       0       0      0

  Italy         161     0       0       21      0       0       0      110

  Ukraine       15      29      8       133     0       0       0      191

  Other         88      51      17      61      96      6       0      9
  ------------- ------- ------- ------- ------- ------- ------- ------ ---------

Source: State Customs Committee of the Russian Federation

## Seed Potatoes

Russia harvested 35.6 mmt of potatoes in 2004, two percent less than
last year, but nine percent more than in 2003. During the last two
years, yields were higher than the average during the 1990s. The
majority of the supply is still produced on small plots, but production
on commercial-size farms is also growing. Most of the seed potatoes are
saved from the previous year and the quality of these seeds deteriorates
from year to year. However, processing companies (potato chips, potato
for French fries, etc.) are contracting with farms to ensure a steady
supply of needed raw materials and providing a better quality seed
stock.

Imports of seed potatoes increased in 2003, but then dropped again in
2004. Post forecasts that imports of seed potatoes will return to 9,000
metric tons along with an expected increase in the production of
potatoes for processing. European countries will remain the main
suppliers of seed potatoes. However, officially reported imports of
seeds potatoes may well be distorted by recent phytosanitary issues with
the EU.

## Table 10. Imports of Seeds of Potato (HS Number 0701 10), Calendar Years, Metric Tons, by Country

  ----------------- ---------- ---------- ---------- --------- -------------
                    2000       2001       2002       2003      Jan-Nov 2004

                                                               

  \--The World\--   121 813    17 268     6 274      9 997     5 790

  Netherlands       89 060     3 493      3 141      5 499     3 250

  Germany           1 046      2 045      1 295      2 600     1 446

  Finland           761        660        532        910       454

  Sweden            0          9          55         500       0

  Poland            29 147     60         530        355       159

  United Kingdom    183        9          680        316       281

  Lithuania         233        315        00         129       100

  Austria           0          0          0          60        0

  Denmark           0          0          0          40        65

  China             53         113        0          34        0

  Azerbaijan        0          0          41         0         0

  France            39         0          0          0         35

                                                               

  Other             1 291      10 565     0          0         0
  ----------------- ---------- ---------- ---------- --------- -------------

Source: State Customs Committee of the Russian Federation

## Fodder Grass Seeds

Demand for fodder grass seeds is growing slowly. Russia imported over
2,900 metric tons of fodder grass seeds in CY 2003 and almost the same
amount during the period January- November 2004. Imports in CY 2005 are
forecast to exceed 3,000 metric tons. Planting seeds of fodder grasses
are imported mostly from Germany, Netherlands, Denmark, and Canada.
Denmark was the main supplier in 2003 with almost 1,570 metric tons,
including 173 tons of fescue seeds, 106 tons of rye grass seeds, 71 tons
of seeds of Kentucky blue grass and 1,219 tons of seeds of other grass
plants. Imports of grass seeds from the U.S. were small, only three
tons.

# Trade

Table 11 shows the structure and dynamics of seeds imports in 2000 --
2004.

## Table 11. Imports of Planting Seeds, Calendar Years, Metric Tons

  ---------- ---------------------- -------- ------- ------- ------- ---------
                                    2000     2001    2002    2003    Jan-Nov
                                                                     2004

  07011000   Potato, for sowing     121 813  17 268  6 274   9 997   5 790

  07131010   Peas, for sowing       1 696    338     244     232     461

  07031011   Onion, Sets            4 289    2 753   4 726   7 162   7 465

  07133310   Beans, for sowing      668      177     11      13      10

             Subtotal               128 466  20 537  11 256  17 404  13 726

                                                                     

  10019091   Wheat and meslin seed  1 577    218 803 18 005  70 219  49 648
                                    471                              

  10030010   Barley, for sowing     1 759    97      282     3 132   1 870

  100510     Corn for sowing, not   29 027   8 805   5 153   5 465   6 489
             sweet corn                                              

  10061010   Rice, for sowing       0        0       0       0       0

  10070010   Sorghum, hybrids for   1        10      12      7       0
             sowing                                                  

             Subtotal               1 608    227 714 23 453  78 823  58 007
                                    258                              

                                                                     

  12010010   Soybeans, for sowing   14       0       6       216     161

  12021010   Peanuts, for sowing    0        0       0       0       0

  12040010   Flax, for sowing       1 647    0       0       17      0

  12050010   Rape or colza seeds,   176      52      14      53      49
             for sowing                                              

  12060010   Sunflowerseeds, for    1 980    1 082   2 164   2 507   3 306
             sowing                                                  

             Subtotal               3 818    1 134   2 184   2 793   3 516

                                                                     

  1209       Seed, fruits and       4 500    2 861   3 974   4 461   5 908
             spores, for sowing                                      

             including:                                              

  120910     Sugar beet seed, for   372      430     528     863     1 487
             sowing                                                  

  120921     Alfalfa, Lucerne, seed 2 171    146     161     0       29

  120922     Clover seed            53       113     118     108     96

  120923     Fescue seed            111      148     159     323     385

  120924     Kentucky blue grass    55       71      155     171     151

  120925     Rye grass seed         167      296     236     95      194

  120926     Timothy grass seed     4        9       2       1       3

  120929     Seeds of other grass   596      1 396   1 859   2 211   1 987
             plants                                                  

             Total fodder grasses   3157     2179    2690    2 909   2 845

  120930     Herbaceous plants,     21       31      44      45      37
             seeds                                                   

  120991     Vegetable seeds,       976      443     476     442     1 050
             except red beet and                                     
             peas                                                    

  120999     Seeds of other         345      209     235     202     491
             Herbaceous plants and                                   
             forest trees 1209                                       
  ---------- ---------------------- -------- ------- ------- ------- ---------

Source: State Customs Committee of the Russian Federation

## Tariffs

Table 11 provides information on current import tariffs for planting
seeds. There have been no changes over the last year. Trade in seeds
within the members of the Customs Union (Russia, Belarus, Kazakhstan,
Kyrgyzstan, Tajikistan) remains duty free.

## Table 12. Import Tariffs for Planting Seeds

  ---------- ------------------------------ ------------------------------
  HS number                                 Import

  07011000   Potato, for sowing             5%

  07131010   Peas, for sowing               15%

  07031011   Onion, Sets                    15%

  07133310   Beans, for sowing              15%

  10019091   Wheat and meslin seed          5%

  10030010   Barley, for sowing             5%

  100510     Corn for sowing, not sweet     5%
             corn                           

  10061010   Rice, for sowing               10%, not less than 0.03 euros
                                            per 1 kg

  10070010   Sorghum, hybrids for sowing    5%

  12010010   Soybeans, for sowing           5%

  12021010   Peanuts, for sowing            5%

  12040010   Flax, for sowing               5%

  12050010   Rape or colza seeds, for       5%
             sowing                         

  12060010   Sunflowerseeds, for sowing     5%

  1209       Seed, fruits and spores, for   5%
             sowing                         
  ---------- ------------------------------ ------------------------------

Source: State Customs Committee of the Russian Federation

# Policy

The reorganization of the Ministry of Agriculture led to a period of
uncertainty as to which organization would be handling the supervision
of seeds testing and registration. Only at the end of 2004 did it become
clear that most of the functions of the former Seed Inspection Service
will be given to the Federal Service for Veterinary and Phytosanitary
Surveillance.

## Patent Rights

According to seed breeders, farmers have increased the use of patented
seed varieties and hybrids that allow them to increase yields, in some
cases by 0.5-0.6 tons per hectare. However, despite existing patent
laws, farmers reportedly do not usually pay the required royalties and
the selections centers do not have enough money to pay for legal action
to recoup the losses.

## Local grain seeds subsidies

To supply the areas that do not have access to saved seeds often
involves lengthy transportation times, during which the quality of the
seeds may deteriorate and the seeds may become infected. For example, in
2004 in Irkutsk Oblast, there were no shipments of planting seeds free
from infection according to the local plant protection station. The most
frequently observed disease was "root rot," which infected 32.7 percent
of all seeds. The necessity of treating the seeds with chemicals prior
to planting is widely acknowledged and the oblast budget generally
covers seventy percent of the expenses, according to an Agronews article
of17.05.04).

Another example of local subsidies for elite seed breeding is from
Primorskiy Kray, which allotted 51.6 million rubles for development of a
regional breeding program. These funds will be distributed among 17
local feed farms with which the Kray administration will conclude
contracts for the production of high yield seeds of grain, soybeans, and
rice.