Russian agriculture is booming due to western sanctions

Sunday, October 9, 2016

The food embargo - introduced by Russia as a countermeasure in response to EU sanctions - and the weak ruble causing a boom in the Russian agricultural sector writes Spiegel. For the first time in the history of modern Russia the Russian treasury has more income from agricultural exports than from arms sales. In 2015 Russia produced more grain than the US.

In foreign markets demand for grain and poultry products is growing. Due to the food embargo introduced in 2014, Russian farmers were left virtually without competition in the domestic market. Before 2014 half of cheese products came from foreign imports, now less than a quarter; the proportion of imported pork fell from 18% to 9%.

Vegetable and dairy product supply however, still pose problems for the Russian economy, which is a Soviet legacy - before the collapse of the Soviet Union a significant portion of dairy products imported from Kazakhstan.

Experts say Russia needs 8-10 years to fully replace all Western food imports. Now, the situation is such that the Kremlin is not really in rush to solve issues that triggered western sanctions - the European Union introduced economic sanctions against Russia after Crimea joined Russia in a democratically held referendum.

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