https://orcid.org/0000-0003-2846-2306
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ABSTRACT
In May 2018 President Putin challenged the agricultural sector to increase the value of food exports to $45 billion by 2024, up from $26 billion in 2018. The article surveys opportunities for increasing the export of grain, meat, and dairy. Supply and demand factors for Russian food exports are examined. Obstacles to the expansion of food exports are also considered. Russia’s export model is supported by significant state interventions in the agricultural sector. The article concludes that despite significant obstacles, there is a reasonable chance that Putin’s target goal can be reached.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1. The full title of the decree was ‘On national goals and strategic tasks for the development of the Russian Federation to 2024ʹ.
2. Food exports are defined as commercial sales of raw and processed agricultural, fish, and seafood products to foreign countries. The value of food assistance provided by Russia is excluded, which currently is negligible.
3. In 2017, the United States was the largest food exporter in the world at $149 billion.
4. The interesting question, one that I have not seen commented on, is where did the $45 billion number come from? Did Putin just pluck it out of the air or was it based on calculations and projections? I do not have the answer, but it would be surprising if Putin simply made up this number.
5. According to the 2016 agricultural census, there were approximately 7,600 medium and large enterprises (exclusive of small enterprises, microenterprises, private farms and individual entrepreneurs), and 290 million hectares of land in rural areas, of which 90 million hectares are agricultural land.
6. In contrast, Ioffe and his colleagues find that agricultural production in Russia’s European north and non-black earth zone is a function of proximity to the largest city in a region; and food production in the south is a function of soil fertility (Ioffe & Nefedova, Citation1997; Ioffe, Nefedova, & de Beurs, Citation2014; Ioffe, Nefedova, & Zaslavsky, Citation2006). With state financial support for land improvement and irrigation, as well as subsidies for fertiliser and acquisition of farm machinery, southern regions have increased their food production substantially since the early 2000s. The strong rebound in agricultural production in southern regions such as Stavropol’ kray is all the more remarkable given the litany of problems that afflicted Russian agriculture in the 1990s and that continued into the first half decade of the 2000s (Ioffe, Citation2005). Overall, the nominal ruble value of agricultural production increased by over 280 percent during 2004-2018 (Rosstat, Citation2007, p. 528, Citation2018a, p. 636). The point is that traditional factors such as location, land quality, and population density are accurate predictors of agricultural production.
7. A concentration is seen in other ways as well. Four deep water ports export the majority of Russia’s grain: Novorossiisk, Tuapse, Taman’, and Kavkaz (Ganenko, Citation2018a, pp. 18-19). During the 2017/18 agricultural year, the top ten grain exporting companies accounted for 75% of the exported volume (Diatlovskaia, Citation2018b, Citation2018c).
8. In September 2018, Minister of Agriculture Dmitrii Patrushev, whom Putin appointed in May 2018, pledged to surpass Putin’s goal by increasing food exports to $50 billion by 2024 (Ministerstvo sel’skogo khoziaistva Rossiiskoi Federatsii, Citation2018b).
9. Financial support for food exports is a subset of the larger budget for agriculture. During 2019-2025 the state program for agriculture calls for expenditures of R2.3 trillion from the federal budget. The agricultural program could be extended to 2030 (with additional funding) to run concurrently with the program for the development of rural territories.
10. Storage infrastructure is particularly weak in Siberian regions.
11. It is estimated that Depot attracts 15,000 people a day on weekdays and double that number on weekends.
12. A study of consumer preferences towards domestically produced cheese in the city of Perm found that most do not consider locally produced cheese as unsafe, but also feel that it is lower quality than imported cheese. The authors also found that consumers’ preferences for imported cheese rise as education and income levels increase (Yormirzoev, Teuber, & Li, Citation2019). The results may suggest that local cheese is lower quality than that produced in central Russia in regions surrounding Moscow. Thus, while this study is interesting, the conclusions are conditioned by: (1) the grade of cheese that interviewers inquired about; (2) the quality of locally-produced cheese in Perm; and (3) the type of food store where consumers were interviewed. These three variables are not explained by the authors and thus their arguments warrant further testing.
13. According to Rosstat data, in 2010 urban dwellers consumed an average of 42.3 kilograms of milk and 6.6 kilograms of cheese; in 2017, they consumed 47.2 kilograms of whole milk and 6.9 kilograms of cheese. Rural dwellers consumed 59.3 kilograms of milk and 4.2 kilograms of cheese in 2010; in 2017 consumption of whole milk fell to 54.2 kilograms of milk while cheese rose to 5.3 kilograms.
14. Africa was the only continent that experienced an increase in the number and percentage of undernourished people during 2000-2015. In 2016 for the whole of Africa, 19% of the population was undernourished and 26% suffered from severe food insecurity. The most serious occurrences were in East Africa with 32% of the population undernourished and 32% severely food insecure; Middle Africa had 25% undernourished and 33% food severely insecure; and Sub-Sahara Africa had 21% undernourished and 29% severely food insecure (Food and Agriculture Organization (FAO), Citation2017b, annexe 1).
15. Because grain is the most important of Russia’s food exports in both volume and dollar value, the list of top customers is generated from importers of Russian grain based on volume. The top 30 purchasing countries account for 90% of Russia’s grain sales. Generally, top agricultural trading partners (imports and exports) are Egypt, China, Turkey, South Korea, and Kazakhstan.
16. Negotiations were held with Chica, Japan, Vietnam, Singapore, South Korea, Philippines, Morocco, India, Thailand, Hong Kong, OAE, Qatar, Kuwait, Tunisia, Brazil, Argentina, and other countries.
17. From ancient drawings and writing it is clear that food was of central importance to the exercise of state power. Food was used as currency, as a form of payment for taxation, and was the basis for foreign trade. Foreign trade was especially important because it necessitated not only a merchant fleet but naval forces to protect trade routes. Naval forces required manpower and thus the state got into the business of employing and deploying military manpower.