An agricultural ace in the hole in the Arctic

14.12.2011 — Analysis

Yamal is trying to grant Russia the status of an Arctic country. Northerners have steadily won over the European market with their reindeer products and have become the largest exporters of venison to the Old World. This correspondent for RusBusinessNews has learned that the regional authorities are planning to expand the processing of reindeer and to begin producing pharmaceuticals from reindeer blood and antlers, endocrine-enzyme raw materials, as well as clothing and shoes made of reindeer hide.

A reindeer horn of plenty

The largest herd of reindeer in the world, about 700,000 animals, roams the tundra in Yamal. Four breeding farms are helping to maintain the genetic purity of the species. The head of the Yamalo-Nenets autonomous district, Dmitry Kobylkin, considers it promising that the district is planning to begin advanced processing (up to 95%) of reindeer products.

The Yamalskie Oleni company will be the hub of the regional agribusiness cluster. This hi-tech slaughtering and processing complex was designed by the Finnish company Kometos Oy, which has simplified the procedure of getting all the steps in the production certified to meet European Union standards. Yamalskie Oleni offers more than 60 different products, including meat delicacies and canned foods.

Finns and Germans enjoy the taste of this gourmet meat. One thousand tons of organic meat products have been shipped to Europe since 2008. Not only was the production process certified as meeting European standards, but also the land where the animals graze.

This year the Finnish company Lapin Liha OY purchased 300 tons of venison from Yamal for 1.5 million euros. A total of 160 tons of meat costing one million euros has been shipped to the German company Geti Wilba GmbH & Co. KG. Yamalskie Oleni began using German and Finnish technology to cut and package the meat, so the company could prepare their own products for sale in European shops, while at the same time retaining the venison's nutritional qualities as much as possible. Their foreign business partners are even willing to buy frozen meat, but the Northerners are interested in supplying products with a higher added value.

The director of Yamalskie Oleni, Evgeny Maltsev, stated that the company will continue to work with reliable foreign partners, but they are counting on the domestic market for most of their business. Venison products can already be found on the shelves of 735 stores in Russia, from Moscow to Petropavlovsk-Kamchatsky. In addition, Evegeny Maltsev predicts that demand will grow, because this Arctic delicacy is still a novelty for most Russians.

Yamalskie Oleni's facilities are already operating at maximum capacity. The company will produce more than 1,000 tons of meat in 2011. Businesses in the Chelyabinsk and Tyumen regions have also begun processing venison. The Troitsky cannery produces canned meat, and the Yalutorovsky meat plant offers consumers raw, smoked meat delicacies apart from the canned meat.

Store shipments of venison continue to increase. There are plans to build another five slaughtering and processing facilities in Yamal, in addition to the four already in existence. Dmitry Kobylkin, the regional governor, thinks it is possible that venison exports might even be discontinued and all the meat might be directed to the Russian market.

Yamal ships products abroad that have a high added value. Innovative medications made from reindeer blood, antlers (young horns), and endocrine-enzyme raw materials are tens or even hundreds of times more expensive than the meat. Chinese equipment for processing reindeer blood is currently being installed at Yamalskie Oleni. According to a source in the government of the autonomous district, Chinese companies have long expressed interest in reindeer-breeding projects in Yamal. Twenty-five reindeer parts are listed in the modern encyclopedia of Chinese medicine, from the bones and tendons to the gall bladder and thyroid gland. These are ingredients in 76 different kinds of pills. The South Korean market for antlers is estimated at $1 billion a year, and the Altai reindeer herders have long paved that way with the horns of red deer.

Innovations for the tundra

The Ob basin is Yamal's second agricultural trump card. Valuable species of fish, such as nelma, whitefish, and muksun, require careful restocking, as they have been dramatically depleted in recent years. Experts believe that more than 130 million juvenile fish must be released into the Ob-Irtysh basin each year in order to maintain the population of northern inconnu fish. For example, it is estimated that there is currently a shortage of 34 million young muksun fish in the Ob basin. According to preliminary calculations, this restocking will ensure 100 tons of muksun for commercial processing.

The Yamal government plans to build a plant to breed whitefish in the village of Kharp. The location was chosen at the recommendation of scientists because of its temperature, the composition of its water, and its transportation infrastructure.

Yamal is striving to reduce its dependence on imported food in any way possible. The transportation costs of bringing food products so far north increase their price considerably.

In addition, some of them, such as chicken, can only be shipped to Yamal in frozen form. The only way to provide the region with refrigerated poultry is by establishing local poultry farms. The possibility of locating them in Salekhard and Novy Urengoy is being explored.

It's worth remembering that in the mid-20th century, even grains and vegetables were grown in the Far North in open fields. Now the local residents are preparing to start growing vegetables in greenhouses. The construction of a one-hectare facility is already being planned. These types of farms also allow wild plants, native to the northern regions, to be cultivated.

"Cloudberries can be grown under artificial conditions like bilberries. That was difficult for anyone to imagine. But we tried and found that it's possible to do so in a greenhouse, - said Gov. Dmitry Kobylkin. - There's currently nothing like this anywhere in the world. Cloudberries are rare - they have a very short growing season. If we could make them a year-round product it would be fantastic".

In addition, developing the local agricultural sector will resolve more than just difficulties with the food supply. The arrival of gas drilling has also had an effect on the lives of the peoples of the Far North. Together with Gazprom, OJSC, the government of Yamal is pursuing an ambitious program to preserve their natural surroundings, with a cost estimated at 765 million rubles in 2011. The money is intended to fund environmental activities, the purchase of mobile housing complexes for reindeer herders, and satellite equipment.

Solving the problem of the impoverishment of the grazing lands by developing gas fields will help introduce new techniques to maintain the reindeer. The practice of fencing off their pastures has a successful history in Finland. It solves the problem of providing the reindeer with high-quality food and protecting them from poachers, while also creating jobs for the indigenous population.

The task of training personnel to work under demanding, Arctic environmental conditions is equally vital. According to Evgeny Maltsev, the director of Yamalskie Oleni, not everyone has the strength to work in the Far North. Whenever one of the experienced workers retires, it is difficult to find a worthy replacement.

The authorities of Yamal have taken on an ambitious task - to instill the skills of innovative thinking in the younger workforce. There will be high demand for experts in investment and risk management; high-quality, commercial reindeer breeding stock; project and venture financing; international markets and marketing; and pharmacology and pharmaceuticals. State-funded grants will allow talented young people to attend the best foreign universities that specialize in agribusiness. The creation of an online Yamal University is just around the corner. Through the use of videoconferencing, students at the university will be able to listen to lectures delivered by professors from colleges both in Russia and abroad. And the majority of the students will be representatives of the indigenous peoples of the Far North.

Margarita Romashova