The effect of Russia’s economic crisis and import ban on its agricultural and food sector

Abstract

This article examines how Russia’s economic crisis and ban on agricultural imports from the United States and other Western countries that began in 2014 have impacted its agricultural and food sector. The import ban was a Russian response to geopolitical tension with the West stemming from the country’s conflict with Ukraine, while the main cause of the economic crisis was a plunge in world oil prices. Given that the bulk of Russia’s export earnings come from oil and other energy products, the oil price decline triggered a major depreciation of the ruble against the US dollar and other major currencies. Ruble depreciation and the import ban have affected Russian consumers by reducing Russia’s imports of agricultural and food products, substantially raising food prices, and lowering consumption. However, the country’s basic food availability has not been threatened. By increasing domestic prices, the depreciation and import ban have stimulated agricultural production. The added output has reduced meat imports and raised grain exports. Russian meat imports in 2014–2016 (average annual) were about 40% lower compared to 2011–2013, while grain exports in 2014–2016 were 50% higher than in 2011–2013 (though production-enhancing favorable weather was also a cause).

Large greenhouse gas savings due to changes in the post-Soviet food systems

“…Together, this resulted in high GHG emissions associated with livestock consumption in the Soviet Union during the 1980s and early 1990s (figure 3). Imports of livestock products were negligible at the time, but imports of feed grains were substantial (figure 2) (Liefert and Liefert 2015).…”

Impact of the Russian Trade Bans on Lithuanian Pork Sector

“…Most of the conducted studies underline the negative impact of sanctions on Russian economy as trade bans were led by the reduced competition, the depreciation of rubles and inflation, the increase of transaction costs, but researchers argue that imposed trade bans could improve the national food security of Russia in the immediate future. According to Liefert (2015), trade bans affected different levels of the supply chains and worsened the situation of both producers and consumers of agri-food commodities. Researchers also conclude that the Russian ban did not have a tremendous impact on the EU economy as most of the producers managed to find alternative markets; however, the impact on the certain sectors of the European agriculture and the situation of individual countries differed remarkably.…”

Weather Derivatives in Russia: Farmers’ Insurance against Temperature Fluctuations

“…Russia's ambitions to become agriculturally self-sufficient and its ban on imported crops have caused its agricultural sector to grow substantially in recent years (Liefert, Serova, & Liefert, 2015). To foster this growth and develop this sector, farmers need insurance policies to protect themselves from risks that are beyond their control, such as weather.…”