The Food Embargo and Choice of Priorities

Abstract

The article focuses on the concept of national interest, for the sake of which the Russian government implemented an embargo on the supply of food to Russia. It is shown that its implementation had a positive effect for agricultural producers and a negative effect for consumers. The economies of the countries that fell under the embargo did not suffer as a whole: the share of their food exports increased because they were able to shift to other markets. In Russia, the effect of the embargo was blurred by the devaluation of the ruble, as a result of which much of the public largely avoided imported food because it was more expensive. The growth of Russian production, especially of meat, in the context of a reduction in effective demand led to a change in prices. External benefits to other countries came in the form of reexporting food to Russia. When enacting countersanctions, other priorities could have been chosen, which would have been more effective and less negative for the Russian public.

Keywords:

• food embargo
• agricultural producers
• importers
• consumers
• countersanctions

Notes

1. Presidential Decree “On the Application of Special Economic Measures in Order to Ensure the Security of the Russian Federation,” no. 560 of August 6, 2014.

2. United States, Canada, Norway, European Union, and Australia. Attributed also to countries that supported the sanctions (Montenegro), and those that have signed an agreement on association with the European Union (Ukraine).

3. See www.rbc.ru/politics/21/12/2015/5677fd939a7947057e007a4f; https://news.rambler.ru/articles/33687311/.

4. See http://tass.ru/info/2728444#K/.

5. See www.warandpeace.ru/ru/news/view/92815/.

6. This is evident if we compare the price of providers that fell under the embargo, and those who did not, but had previously supplied its products to a limited extent and at a higher price (Russian Federal Customs Service).

7. Information here and elsewhere on foreign trade operations is taken from statistics of the Federal Customs Service, Russia.

8. See http://infoline.spb.ru/news/?news=141555/.

9. See www.servis-expo.ru/news/rejting-top-20-krupnejshih-proizvoditelej-svininy-v-rossii-po-itoga m-2015-goda/.

10. See https://lenta.ru/news/2014/07/08/import/.

11. The embargo was introduced on August 7, 2014.

12. Rosstat, “Oborot roznichnoi torgovli prodovol’stvennymi tovarami (vkluchaia napitki, i tabachnymi izdeliiami) v tselom po Rossii (sopostavimye tseny, otnositel’no predydushchego goda).”

13. Rosstat, “Real’nye raspolagaemye denezhnye dokhody naseleniia, % k analogichnomu mesiatsu predydushchego goda.”

14. Rosstat, Statisticheskii biulleten’, “Dokhody, raskhody i potreblenie domashnikh khoziaistv.”