An obscure industry struggles for growth

by Yelena Kozlova, Olesya Krechetova at 05/07/2012

The Moscow News

While breeding of the Siberian red deer, or maral, may be an obscure business, in parts of Russia not suited for traditional agriculture, local regions rely on it. During the crisisridden 1990s, for example, it became the driver of the economy in the Altai mountains along the Kazakh, Chinese and Mongolian borders, bringing in money from exports of new-growth velvet antlers.

The antlers and blood of these animals are said to have unique healing properties. Most preserved velvet antlers, used in a variety of medications, go to South Korea, the first country where doctors began using antler products on human patients. However, current international prices for antlers are low, which has slowed the industry’s growth and forced the government to subsidize farms.

Still, Altai maral breeders are not discouraged. A variety of medications sold on the domestic market are being developed in partnership with research centers and pharmaceutical companies. In addition, health tourism is on the rise, and people from all over the world go to Altai to get access to fresh products. Therapeutic baths, for instance, are booked up to 12 months in advance.

Breeding as conservation

Maral is a subspecies of deer inhabiting the mountains and foothills of the taiga. In the 19th century, in pursuit of expensive velvet antlers, poachers nearly wiped out the entire population. Maral farms, the first of which appeared in Altai at the end of that century, were built to save the species.

“They are not domesticated, but they are not quite wild, either,” said Alexander Klepikov, team leader at Nizhny Uimon, one of the region’s largest farms. “We have fenced off 3,000 hectares in the mountains for them.”

However, such breeding conditions create certain difficulties.

“We bought guns for our rangers. Even though golden eagles are endangered species they are a major threat for newborn calves,” Klepikov said. “They watch the area closely, and once a calf is born they swoop down and make a kill. There are swarms of them in the sky as if they know what’s about to happen.”

Antler baths

On average, stags live eight to nine years and have their antlers sawn off seven times over the course of their lifetimes, beginning at age two. Stags with larger antlers (over 10 kilograms) are selected for breeding, which focuses on improving the quality of velvet antlers.

Not far from the boiling tanks used in processing the antlers, there are rooms where visitors can take an antler bath. Famous throughout the world, velvet antler baths have very strong healing properties, and visitors from Russia and abroad come here for them – each farm receives about 150 bath aficionados every six weeks.

“Doctors say that the carbon-13 isotope is released during the cooking of antlers,” said Alexei Nepriyatel, deputy director of the National Medical Research Institute for Velvet Antler Production, based in Barnaul, capital of the Altai region. “When a patient takes an antler bath, the isotope penetrates the skin and subcutaneous tissue, reaching the body’s cells and thus improving recovery.”

Maral blood is also used to prepare therapeutic products. It is believed that blood receives its healing properties after it goes through the growing antlers and becomes almost a cure-all medicine.

“In particular, a bath with maral blood removes lactic acid from the body,” said Alexander Shebalin, technical director of the Moscow Anti-Doping Medical Center and inventor of the maral blood vacuum processing method. “Patients feel a surge of energy and the body is in fact rejuvenated.”

Shebalin was the first person in Russia to take up this business over 20 years ago. Currently, he produces the source material for manufacturing medications – dried blood – in Altai, using special patented equipment that Shebalin and his colleagues have developed themselves.

Difficult times

Valery Repnikov, the director of antler-exporting firm Altaipharm, said that he used to sell antlers at a price of $1,000 per kilogram back in 1995. However, after the Asian economic crisis in 1997, prices for these products fell four times. Ironically, the Russian crisis of 1998 saved the industry.

“Dollar prices fell four times over, whereas ruble prices fell six times over; therefore, ruble prices ended up growing by 50 percent,” Repnikov said. “This is how the industry managed to survive.”

The 2000s, however, were not a good time for the antler market, he said. “The cost of production has increased so much over the past few years that the profitability of maral farms does not exceed 10 to 15 percent now.”

Repnikov believes that prices must reach $450-$500 per kilogram, from a current $200-$350, within the next year or two, otherwise it will be difficult to keep the breeding industry alive. Subsidies of approximately 36.5 million rubles ($1.13 million) from the federal and Altai republic budgets will go to support it this year alone.

“Maral farms are not growing at all, since expanding them would require a profit margin of at least 30 percent,” said Alexander Yermilov, the director of a maral farm. “There are concerns that managers at maral farms may at some point decide that breeding red deer for meat is a more lucrative proposition.”

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