By Vladislav Vorotnikov
Russia’s poultry industry is short by 6,000 workers, Russia’s agriculture ministry reported in late 2020, citing an estimate provided by Russian poultry organizations. During a meeting, the ministry confirmed, in particular, a worrying shortage of personnel in the production facilities of the largest companies, Cherkizovo and GAP Resource. GAP Resource said on its own behalf that the problem is associated with a gradual exodus of the Russian population from small towns, where most of Russia’s industrial poultry farms are based, to large metropolises. Cherkizovo added that the booming e-commerce industry was luring some workers away from poultry farms because the migrant workers they normally relied on could not travel due to the Covid-19 pandemic. “The current situation could reduce a range of poultry products normally available on Russian grocery shelves, while in a negative scenario it could lead to a total drop in production,” GAP Resource warned.
Sergey Lakhtyukhov, general director of the Russian Union of Poultry Farmers, said the labor crisis in Russian poultry farming peaked in late summer 2021. “Today slaughterhouses and processing facilities in particular have labor issues. The agricultural sector has been affected by this problem to a lesser extent,” Lakhtyukhov said, adding that some measures have been implemented by the Russian Ministry of Agriculture to attract more migrants from the CIS region.
Competitive labor market
“The growing e-commerce segment, where wages are exorbitant, was driving workers away from the poultry sector,” Lakhtyukhov noted, adding that this problem is seen in Russia and beyond. The situation is similar in Poland, Europe’s largest poultry exporter. Krzysztof Hajłasz, an expert at the Polish Export Center, said that in addition to travel restrictions, quarantine and deportation mandates, labor costs have jumped due to general inflation. “It has the biggest impact on blue-collar workers and pushes them to seek higher salaries. Fortunately, small businesses often employ mostly family members. They are less likely to leave a family business, so these operations are less impacted by migration to higher-paying jobs. Large-scale production and slaughterhouses suffer the greatest impact, as a significant percentage of their workforce is made up of non-EU citizens – mostly Ukrainians,” Hajłasz said.
Distancing requirements and quarantine measures imposed to prevent the spread of Covid-19 have driven up labor costs, along with increased competition for workers, which is becoming increasingly fierce. Anatoly Nasenya, a member of the Belarusian National Assembly, said the country is facing a labor shortage, with the number of vacancies in 2021 rising to 74,000, while the unemployment rate hit an all-time high 0.2% of the working-age population. Nasenya added that Belarusian farmers are struggling to recruit workers, which he believes could be satisfied by attracting foreigners.
Anna Sergienko, marketing manager of Poultry Ukraine, is less pessimistic. She said she was not aware of any Ukrainian poultry companies with labor shortages. However, Ukraine is at the forefront in terms of migration in Eastern Europe. In the first ten months of 2021, 600,000 Ukrainians left the country – the highest figure on record, the State Statistical Service estimated. Between 2010 and 2020, up to 2.6 million citizens left the country, representing almost 10% of the country’s total workforce.
Modification of working conditions
Galina Bobyleva, president of the Russian Union of Poultry Producers, said poultry farm managers need to design tools to attract workers. Raising wages is a safe bet, she says. With the average monthly salary at a Russian industrial poultry farm being 50,000 rubles (US$700) at most, compared to 90,000 rubles (US$1,200) in food delivery, there is still plenty of room to attract people. . At least in theory. A source from a local poultry company said that in 2022, most companies in the Eurasia Union would need to increase wages by 20% to retain staff, especially in farms near major cities where there are there is some competition for workers. The source noted that salaries have already increased by 20% since the start of the pandemic.
In September 2020, Russian poultry farmers asked the Ministry of Agriculture to change labor laws by reducing staff insurance payments so that they could obtain additional funds to increase salaries. At the same time, the Russian Ministry of Labor announced its intention to try to attract more immigrants to work in agriculture. The ministry estimated that by 2022 the share of immigrants in the Russian poultry industry could be close to 50%. Before the Covid-19 pandemic, Russia hosted up to 12 million migrant workers, mainly from Central Asia: Tajikistan, Turkmenistan, Kyrgyzstan and Uzbekistan. During the first confinements in May 2020, a significant proportion of them returned home hoping to return in a few weeks. The subsequent end of the air link with Central Asia took them by surprise.
These labor market issues may have been revealed by the Covid-19 pandemic, but they are expected to last longer, meaning poultry farmers should prepare for worsening conditions in the years to come. The current crisis in Eastern Europe is believed to be associated with a so-called “demographic chasm”. The Russian Academy of Sciences has predicted that the working-age population in Russia will shrink by 7 million by 2030. This demographic chasm is not limited to Russia, as it is also seen in other former communist states: Bulgaria, Romania, Serbia and Ukraine. The working population of Central and Eastern European countries – with the exception of Turkey – is expected to decline significantly over the next 30 years, due to low or negative net birth rates and emigration, as shown by research conducted by the International Monetary Fund in 2019. Bulgaria, Poland, Latvia and Ukraine risk losing up to a third of their working-age population during this period.