Russian Agrocomplex: Reality and Future

Abstract

Svetlana Barsukova — Vice Head of Laboratory for Sociological and Economic Studies, National Research University “Higher School of Economics”. Address: 20, Myasnitskaya St., Moscow, 101000, Russian Federation. E-mail: svbars2012@gmail.com

This article deals with the problem of agrarian policy in modern Russia in the 2000s. The most important events in agricultural policy in these years were the national project “The Development of Agricultural Complex” (2006-2007), the Food Security Doctrine of the Russian Federation (2010), and Russia’s accession to the World Trade Organisation (2012). The adoption of these documents has established a new formal framework for agricultural business. The aim of this paper is to determine the extent to which these events are logical and coherent with respect to the development of agricultural business in Russia. This article provides a detailed description of these three milestones of agricultural policy.

The main argument of the article is that consistent agricultural policy is missing in Russia. Instead, there are rather a series of spontaneous pulses with different efficiency and focus. The national project has spurred the development of livestock, especially beneficial for pig and poultry. The doctrine’s main goal was to achieve a certain level of self-sufficiency in basic foodstuffs by 2020. It actually stood on three main points: raising the share of domestic production of the main types of food, the quality of this food and its availability to the population. Experts have recognized the positive aspect of this decision, namely: a) any state document which attracts attention to the agricultural sphere contributes to its development; b) the development of the agricultural sphere was given the status of strategic activity; and c) within the framework of social security for the population and availability of the main types of food, the idea of targeted assistance to low-income consumers was declared.

However, the positive trend in the development of Russian agriculture has been blocked by the country’s accession to the WTO. Conditions agreed to by Russia are extremely unfavorable for agriculture: а) they restrict import duties, b) prohibit export subsidies, c) allow for extremely low level of state support for agriculture, d) significantly reduce import duties on agricultural machinery, and e) Russia will not be able to use its own phytosanitary regulations to limit/ban food imports. The expected benefits of WTO accession for Russian agriculture are the following. First, Russian producers will have to meet the highest international quality standards. Second, Russia will gain access to the international arbitration system to resolve trade disputes. And third, Russia’s plans to become a major player in the food market would have to meet the rules of the world trading system. Export ambitions must be implemented within the institutional framework adopted by the majority of countries. However, the expected benefits of Russia’s accession to WTO are spurious. In the near future, Russian agriculture is most likely to face serious difficulties and suffer significant losses, since there is, in fact, no logical and consequential system of agricultural policy.