Sanctions & Counter-Sanctions as the Engine of Russian Agriculture Development

The American media continues to hone the image of Russia as the center of global evil. National Interest published an article in July saying that Russia plans to reap the benefits of climate change for its agriculture. According to American experts, by 2028 Russia will be able to control 20% of world grain exports and limit grain exports… for political purposes, using grain as a “potential weapon of hybrid war”.

According to Bloomberg, in 2020, Russia will again take the first place in the world in grain production.

According to Russian Deputy Prime Minister Viktoriya Abramchenko, exports of Russian agro-industrial complex products increased by 18% in the first half of 2020 compared to the same period last year and amounted to more than $13 billion in value terms. By the end of 2020, in accordance with the certificate of the federal project “Export of agricultural products”, Russia should export agricultural products and food for $25 billion.

Now the main importer of Russian agricultural products is China. Exports of Russian agricultural products to Turkey and Kazakhstan are growing. In general, Russian agricultural products are delivered to 149 countries, and the list is expanding.

Russia is increasing not only grain production. In the first six months of 2020, almost all major groups of products, especially vegetable oils, meat products, and sugar, demonstrated positive dynamics of exports of agricultural products. Exports of the Russian food and processing industry in the first half of the year amounted to $2.1 billion, an increase of 25%. The positive dynamics is mainly due to sugar, the supplies of which increased by 4.8 times compared to last year.

Almost all analysts admit that one of the main reasons for the rapid development of the Russian agricultural industry was the sanctions imposed by the west, and Russian counter-sanctions (restrictions on imports of western products), which gave an impetus to the growth of domestic production. Imports of food products from the European Union to Russia fell by 40%, freeing up the market for domestic products.

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State assistance to agricultural producers also played a role. They were granted preferential loans at a rate of up to 5% per annum, and the amount of grants for farmers was significantly increased. A preferential tariff for grain transportation was introduced, new terminals were built in ports, and a network of wholesale and distribution centres was created. At the end of the year, Russian producers managed to significantly expand their market share not only in grain, but also in fruit, vegetable, cheese, dairy, and meat products. According to the Financial Times, if in 2013, before the western sanctions and retaliatory trade embargo, Russia imported 35% of food, now this figure has fallen to 20%.

And if we talk about the prospects, Russia has a huge amount of free farmland – no one in the world has this. Climate warming will also have a positive impact on Russian agriculture. As predicted by the University of Kansas, compared with the end of the 1980s, the average air temperature in those areas of Europe and Asia where grain is grown will increase by 1.8 degrees by 2020 and by 3.9 degrees by 2050. In combination with the development of technologies, this will allow Russia to introduce an additional 57 million hectares of land into agricultural circulation.

Russia has already completely replaced imported pork and chicken with domestic products, has become the world’s leading producer of sugar beet, and the harvest of greenhouse vegetables in the country is growing by an average of a third every year. “Russia could be a food superpower, given its vast soil and water resources,” the Wall Street Journal wrote back in 2015. “It may still become one…”

Russia indeed can. And for those who have the desire, let them call it a “potential weapon of hybrid war”.

Vladimir Malyshev

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