The Russian food embargo and food security: can household production fill the void?

Abstract

The food ban announced by President Putin in August 2014 flows from the 2010 food security doctrine. Russia is food insecure in animal husbandry production and relies on imports to meet domestic demand. Households, which account for over 40% of food production, are integral to attaining food security. Russia could reduce meat imports if households would sell more animal husbandry products. The article presents a profile of commercialized households, showing that behavioral variables have significant explanatory power. It examines government policy toward behavioral variables, showing some inconsistency in promoting behavior that increases household meat sales.

Keywords:

• rural Russia
• rural households
• food security
• Russian food embargo

Notes

1. The list of banned products was subsequently amended on August 20 in order to allow some imports that help support domestic production, for example, the importation of hatchling fish (Postanovleniye 2014b).

2. Since 2001, Russia has employed both tariff and non-tariff policies in an attempt to strengthen domestic food producers and shelter them from competition. Some of the methods used in the past will no longer be permitted under WTO rules to which Russia must abide as a member; for instance the use of import quotas (Kiselev and Romashkin 2012).

3. Per capita annual meat consumption rose from 50 kg in 2000 to 74 kg in 2012 (Rosstat 2008d, 19, 2013a, 11).

4. Argentina and Brazil indicated a willingness to supply beef, and the day after Putin’s decree Rossel’khoznadzor approved the export of beef from 90 meat-processing plants in Brazil. Chile is ready to sell more salmon to Russia, replacing the losses from the inclusion of Norway. Ecuador is ready to sell more shellfish to Russia. Belarus said it is willing to increase the export of cheese, milk, and other dairy products; and it can replace Polish apples and Dutch potatoes. Central Asian nations are ready to provide fruits and vegetables. Kazakstan is ready to increase beef exports to Russia as much as sevenfold over 2013. Turkey, which last year sold $1.7 billion worth of food to Russia, predicts that the value of food exports may double. China, which does not support US-backed sanctions against Russia, is also ready to increase food exports to Russia. Likewise, Armenia expressed an interest to increase its food exports as well.

5. In 2013, domestic production fulfilled the following percentage of demand: grain, 99%; sugar, 107%; potatoes, 99.6%; meat and meat products, 77.5%; milk and milk products, 76.6%.

6. The total number of cattle fell from 52.2 million in 1992 to 20 million in 2012. Included in this number is a reduction of dairy cows from 20.2 million to 8.9 million during the same time period. The number of pigs declined from 31.5 million to 18.8 million. The data are for all categories of producers (Rosstat 2013b, 92).

7. But Russia is not only an importer of food, it also has become a grain exporter. In the 2013/14 agricultural year, Russia exported 25 million tons (mt) of grain, including 18 mt of wheat (V 2013/14 sel’khozgodu 2014). Russia is expected to export 27–30 mt of grain during the 2014/15 agricultural year on the strength of a 110 mt harvest (Prognoz 2014). An agricultural year is 1 July–30 June.

8. In 2013, large farming enterprises accounted for almost 49% of the ruble value of food production.

9. The level of households’ output is questioned by some scholars who believe that official statistics are exaggerated (Ioffe, Nefedova, and Zaslavsky 2006, 37). Households’ output continues to depend on various types of assistance from nearby large farming enterprises, which is important because the financial condition of the farm becomes an important variable.

10. The impact of human capital on household food production is likely to increase as villages continue to disappear, the number of villages with fewer than 10 residents grows, and rural depopulation persists (Sil’vestrov 2011; Bondarenko 2013).

11. Milk could be included as a dependent variable, but it is excluded because milk processing plants buy larger volumes from large farms, and due to the fact that milk from the population is sometimes considered to be of substandard quality. Moreover, because milk is a highly perishable commodity, it is often consumed by households.

12. The size of the family refers to the number of people living together in the household. A variable for household labor was created by assigning a labor value to each person depending upon his/her age. The methodology for calculating this variable is employed from previous scholars (O’Brien, Pastsiorkovsky, and Dershem 2000, 87–88).

13. Two days after Putin’s August 6 decree, the first deputy Minister of Agriculture in Belarus said that his country is interested in increasing deliveries of meat, milk, and vegetables to Russia (Agrofakt 2014b). In Brazil, by August 8th, 90 new meat plants were approved to export beef, chicken, and pork to Russia (Reuters 2014).

14. Family farms and small and individual enterprises are registered as “legal persons” and are considered commercial organizations. Dacha plots and collective gardens are used primarily to grow food for consumption and are non-commercial in nature. Private plots are registered to “physical persons” and are legally considered non-commercial entities, although plot operators may market their produce.

15. The amendment pertains to land in permanent use or lifetime use without right of inheritance.

16. Ministry of Agriculture data show that compared to 2012, in 2013, 22 regions increased their number of dairy cows (57 decreased); 28 regions increased their number of pigs (49 decreased); and 34 regions increased their number of poultry (45 decreased). The production of pork increased in 47 regions and production of poultry meat increased in 48 regions (Ministry of Agriculture 2014, 252–7).

17. In addition, a network of regional rural credit cooperatives has emerged, and even though their number has increased, many of them exist only on paper and do not actually operate. For this reason, the impact has been relatively small because they tend to be undercapitalized. Rural credit cooperatives were responsible for over 6% of loans made to small forms of farming in 2008 and 2009, but declined thereafter and fell to 2% in 2012, as borrowers became clients of the big banks (Ministry of Agriculture 2013, 109–110).

18. Corresponding data are not provided in the report for 2013.