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Russian food security to remain unscathed by Western sanctions - experts

April 16, 2014, 16:26 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Nikolai Alexandrov

MOSCOW, April 16. /ITAR-TASS/. Experts believe that possible Western sanctions imposed on Russia are unlikely to have a major impact on the country’s food security, but an issue of Russia’s self-sufficiency draws attention, considering the chance of a Western exports embargo on agricultural products.

Elmira Krylatykh, a member of the Corporate Management team of the Russian Presidential Academy of National Economy and Public Administration (RANEPA), said Russia has “a great potential in the agricultural and agrarian sectors”.

“We will get through, even if sanctions are imposed,” said Krylatykh, who is also the head of the Center for Agrarian Markets of the Nikonov All-Russia Institute of Agrarian Problems and Informatics.

However, the expert believes that agriculture needs urgent investment in its modernization, primarily in upholding the livestock sector and reducing great losses in deliveries of goods in the producer-consumer relationship. According to the expert, while the situation is normal with poultry production, there are some problems with beef and pork supply. As for agrarian product deliveries "straight from the field" to the final consumer, losses, according to various estimations, often exceed the 30% mark.

Krylatykh said that if these two issues were solved, it would be possible to avoid a threat to national food security even under most unfavorable developments.

Mushegh Mamikonyan, president of the Russian Meat Union, said he also saw no serious consequences for food security in the event of Western sanctions.

“The fact is that Russian exports and imports greatly differ,” he said. “We are exporting rough products while we import mostly sealed products, which are not categorized as vitally important.”

Speaking about Russian product exports, Mamikonyan said Western countries were not Russia’s strategic partners in this regard since the exports were mainly channeled to the Middle East, Africa and member states of the Commonwealth of Independent States (CIS).

According to RANEPA’s report “Russian Food Security: Monitoring, Tendencies and Threats,” presented on Tuesday, the level of Russia’s food independence is stable in general and varied narrowly between 87% and 89% over the past decade.

Margins for the country’s food independence are set out by the Russian Federation Food Security Doctrine. According to the document, independence could be provided by not less than 95% of total consumption of grain and potatoes, 90% of milk and 80% of meat. RANEPA’s report stated that the margins had been exceeded in regard to grain, seed oil and sugar. Margins of food independence in regard to milk and meat in 2012 amounted to 80.2% and 75.9% respectively. However, the level of self-sufficiency regarding certain types of dairy products (cheese, butter) was significantly below the required margin. Moreover, the figures of food independence concerning certain meat products, namely beef, were twice as low as the required margin.

Natalia Shagaida, the head of the Laboratory for Agrarian Policy with RANEPA, also pointed to the unstable situation with meat production.

“While in terms of grains consumption Russia not only fully provides for itself but also for some 50 million abroad, the 1990s slump in meat production has only recently showed signs of revitalization,” she said. “Moreover, the level of food independence in terms of milk goes on a gradual decline.”

Besides possible Western sanctions, experts named other threats to Russian food security. Among them is control by foreign legal entities over a significant part of major agricultural producers. For instance, five out of 10 largest agricultural manufacturers have foreign-registered companies among their owners, which administer either directly or via legal mediators. Russia’s five largest sugar-producing companies, which account for 60% of the country’s output, have foreign-registered companies holding controlling stakes.

Other threats, according to experts, include evolution of latifundia and transaction of large land plots under foreign control. Experts say that Russia’s legal limitations on transfer of agricultural land to foreign control are ineffective. There is still no official data on agricultural land areas purchased in Russia by foreign nationals.

 

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