Russian Agriculture’s Counter Attack (II)

In December 2006, Putin signed the promulgation of the Russian Federal Agricultural Development Law, which established the legal basis for the implementation of national social and economic policies in the field of agricultural development. The Act establishes the objectives, principles, implementation measures of national agricultural policies, and the main directions of state support in the field of agricultural development. Russia believes that the ability to produce foods that meet the needs of domestic residents with domestic food means that the quality and safety of Russian food is good, but the opposite is not good. In January 2010, then President Medvedev signed the “Presidential Decree on Food Safety Concept.”

 

After Russia joined the WTO in 2012, agriculture was regarded as a key protection area by Russia. In order to improve agricultural competitiveness as soon as possible, the government and financial institutions have continuously improved their subsidies for agriculture and increased financial support. In 2013, Russia’s subsidy rate for agriculture was 13.5%, and the subsidy amount was 190.4 billion rubles (about US$5.77 billion), a year-on-year increase of 28%. In order to support the development of the agricultural machinery and equipment industry, since January 1 of that year, the Russian government has substantially increased the subsidy for domestic agricultural machinery and equipment, from 15% to 30%.

In the same year, the Russian government injected 30 billion rubles (about 1 billion U.S. dollars) into the Agricultural Bank of Russia to ensure the bank’s capital adequacy ratio to small and can provide loans to medium-sized enterprises, agricultural consumer cooperatives, farmers and private enterprises.

“Food is our Petroleum”

In 2012, Russia’s agricultural imports reached US$46 billion,square steel tubing for sale  and agricultural imports accounted for about 14% of Russia’s total imports, including more than 30% of meat and alcohol, and Russia became the world’s second-largest importer of agricultural products.

In 2014, due to the Crimean issue, Russia and the Western countries started mutual sanctions, and the import substitution in the Russian agricultural sector was accelerated. In June of that year, Putin signed an import ban. Since August 7, it has banned or restricted the import of agricultural products from some Western countries. The list of specific commodities includes meat, dairy products, vegetables and fruits. This import ban has greatly stimulated the production of Russian agricultural products and created conditions for the occupation of domestic and foreign markets.

In the same year, Russian agricultural exports reached US$18.9 billion, a year-on-year increase of 16.5%, setting a historical record. In 2015, grain exports contributed nearly 20 billion U.S. dollars in the trade surplus of more than 146 billion U.S. dollars in the year, and crops became Russia’s second largest export product after energy. In 2017, Russian wheat exports increased by 1/3 to 22 million tons, continuing to consolidate Russia’s position as the world’s largest wheat supplier.

The continuous record harvest of crops is a guarantee for large-scale export of agricultural products. The area of Russian agricultural crops has expanded extensively in recent years, and the government has invested heavily in increasing soil fertility and increasing food production.

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