Russia's food policy has raised production and profits in the agricultural sector, increasing food exports and improving food security. Still, the sector is increasingly under pressure due to climate change-induced weather anomalies, grain policy and migrations. In the long run, these factors could affect Russia's status of food exporter.
For the twenty years prior to the COVID-19 pandemic, Russia’s food policy had been successful in raising production and profits in the agricultural sector, increasing food exports, and improving food security. Since 2000, the nominal ruble value of agricultural production has increased more than fivefold. During the same period, pre-tax profits in the agricultural sector rose from R11.8 billion to R160.3 billion, while profits in food processing grew from R76.6 billion to R403.3 billion. The slaughter weight of cattle and poultry more than doubled from 7 million tons in 2000 to 15.6 million tons in 2020. Russia’s average annual grain harvests increased from an average of 87 million metric tons during 2008-2013 to nearly 119 million metric tons during 2014-2020, with a record harvest of 135 million metric tons in 2017 and the 2020 harvest coming close to that record. As a result of production increases, food security has improved. Minister of Agriculture Dmitrii Patrushev advised Russian consumers that they may forget about the word “shortages” when it comes to food products.
In addition, Russia rose from export obscurity before 2010 to rank 17th in global food exports in 2020 based on their dollar value. The dollar value of Russia’s food exports grew from $12 billion in 2011 to over $30 billion in 2020, helped in part by a depressed ruble but also by increases in grain production. In 2020, the dollar value of Russia’s food exports exceeded the value of imports for the first time in post-Soviet history. Through 14 November 2021, the dollar value of Russia’s food exports increased 20 percent compared the same period in 2020, reaching $29.5 billion. For the second year in a row, food exports were on track to exceed $30 billion. Food exports to the European Union and Turkey were up a combined 77 percent compared to the same period in 2020.
Despite these achievements, there are emerging pressures on Russian food security that will cause policymakers to think carefully about the direction of national food policy. These pressures are important because since 2014 Russia has ranked first or second in the volume of wheat exports in the world every year. In 2020, for example, Russia sold wheat to more than 130 nations, which means that it is an important contributor to global food security. Some of the largest purchasers of Russian wheat are in the strategically important but volatile Middle East. In addition, more than 70 percent of Russia’s food exports are sold to nations that are deemed “not free” by Freedom House. In that respect, Russia is helping to sustain authoritarian governments around the world.
Although Russia ratified the 2015 Paris Accord on climate change, as recently as 2019 Russian president Vladimir Putin maintained that the causes for climate change remain unknown. For many years, Putin was a climate change denier. Russia’s climate policy, however, has changed considerably in the last year. In the runup to the October 2021 United Nations Climate Change conference in Glasgow (COP26), however, Putin promised that Russia would strive to be carbon neutral by 2060, a decision driven by the warming of Russia’s Arctic regions and the prospect of the EU imposing a carbon tax on imports as early as 2023. Although Putin did not attend the Glasgow COP26 conference, the Russian delegation was twice the size of the United States and included representatives from the presidential administration, ministries, the Moscow city government, leading banks, and major corporations. Russia claims that 86 percent of its energy usage is from low-carbon or no-carbon producing sources: 40 percent from nuclear and hydroelectric, and another 40 percent from natural gas. Russia has 20 percent of the world’s forests and plans extensive green projects in Siberia and its Far East, which are intended to soak up carbon emissions. Russia’s approach, therefore, is not to reduce emissions but to soak up more through various green projects that take advantage of its vast forested areas.
Despite Putin’s pledge to turn Russia greener, in the short-term the Russian government is proceeding to increase farm mechanization and to increase the export of farm machinery. For this reason, Russia’s agrarian policy has yet to turn “green.” The government wants farms to buy more carbon-producing equipment and machinery so agricultural production and yields will increase. Toward this end, the government offers subsidized credit and a special leasing program to make machinery affordable. For example, in Stavropol krai, one of the most productive agricultural regions located in the south of Russia, the federal government provided over R25 billion in subsidized credit that allowed farms to acquire nearly 10,500 pieces of agricultural equipment during 2018-2021.
The government supports an increase in the application of mineral fertilizer and in 2021 placed limits on prices so that producers would not cut back usage. In November 2021, the government introduced a six month ban on the export of nitrogen and other mineral fertilizers to ensure adequate domestic supply. In addition, a new generation of high-tech and digital technologies are being introduced on Russian farms. Some of these technologies will reduce the volume of pesticides, herbicides, and chemical fertilizers, which obviously is good for the environment and reduces farm costs. But other technologies, such as driverless tractors, continue to operate with gasoline or diesel. The upshot is that Russia and its agrarian sector will remain significant contributors to greenhouse gas emissions for the foreseeable future.
Climate change-induced weather anomalies put pressure on food policy. A very severe drought occurred in 2010, which led to Russia ban its wheat exports from August 2010 through July 2011. Another severe drought occurred in 2012 which cost Russia one-quarter of its harvest. Lesser droughts occurred in 2013, 2015, 2017, 2018, 2019, 2020, and 2021. According to Russia’s Ministry of Agriculture, direct losses due to droughts during 2010-2019 affected about 40 million hectares and led to monetary losses in excess of R103 billion. Deputy Prime Minister Viktoriia Abramchenko warns that if Russia does not address global warming and change its policies, the country could lose up to 30 percent of its harvest annually by 2040. In 2021, drought struck several regions in the Central and Volga Federal districts with estimated losses up to R20 billion. As a result of drought, Russia’s grain harvest declined from 133 million metric tons in 2020 to 118 million metric tons in 2021 (after cleaning), sufficient to meet domestic needs but exports may have to be curtailed in 2022.
Over the longer term, as climate change makes Russia’s southern regions drier and hotter, grain production and yields will likely decline. As northern regions of Russia become warmer, some crop production will shift to the north, but production levels and yields in the north are lower than in the south. Northern areas of Russia are forested and large amounts of carbon and methane are stored in vegetation and soil, which means that the conversion of forests will release greenhouse gas emissions.
A second pressure comes from state grain policy. Due to a smaller harvest in 2021 than in 2020, the Russian government enacted export quotas on wheat and other grains for the second half of the agricultural year (February-June). In November 2021 the government indicated that it would again apply export quotas on grain during the first half of 2022. In June 2021 the government also introduced a flexible export tariff to disincentivize grain exports. By late October 2021, as the price of Russian wheat reached a ten-year high, the export tariff on wheat approached $70 per ton for November deliveries. From June to the end of October 2021 the government had collected R47 billion in export tariffs on grain. Grain producers and exporters complained about the export tariff policy because it affects their profits. Producers warned that if export tariffs are maintained they may have to curtail sowing and grain production to reduce their losses.
The net result could be less food supply and even higher consumer prices in Russia, where inflationary pressures led to an annual food inflation rate of 11 percent by November year on year, but some products rose much more than that. Staples to the Russian diet such as cabbage were up 94 percent since January 2021 and potatoes rose 74 percent, due in part to a poor harvest. In addition, by November year on year, pork was up 16 percent and beef 14 percent. To restrain food prices, the federal government tried to get producers to voluntarily restrain their price increases. In addition, a December 2020 law allows for state price controls on food products that rise by more than 10 percent over a 30 day period.
COVID-related restrictions on the movement of labor represent another pressure on food security. Prior to the pandemic, Russia attracted an estimated 100,000 seasonal migrant laborers for agricultural labor annually, mostly from Central Asia but also from China and North Korea. During the pandemic, the initial closing of borders brought labor shortages as workers were unable to travel to Russia. Especially affected were agriculture and construction segments. In a throwback to the Soviet era, students were sent to the fields and appeals went out to non-agricultural workers to help out.
As the pandemic drags on in Russia, the agricultural sector continues to be affected. Since April 2020 regions in Central European Russia agricultural labor shortages have forced farms to more than increase their payment to manual field workers from R1,500-2,000 to R5,000 per shift. Russia’s National Poultry Union reports a shortage of 5,000-6,000 workers in poultry-raising companies. Some companies reported that due to labor shortages they are unable to maintain the level of production in 2021 that they had in 2020. Poultry companies are increasing monthly salaries to as much as R50,000, but still have problems finding workers. For comparison, in the first quarter of 2021 the average monthly disposable income was R29,864 in urban locations and R20,773 in rural areas.
In October 2021 Russia’s Ministry of Agriculture announced a pilot program to work with private companies to attract 3,500 agricultural and 10,000 construction laborers from Uzbekistan. Companies wishing to attract migrant labor need to conclude an agreement with the Agency for External Labor Migration in Uzbekistan. Potential workers will be tested for HIV and tuberculosis, and they will be vaccinated against COVID-19 with Sputnik Light. Workers must also pass a Russian language exam. All of this will be financed by the employer, who also must pay for flights to Russia.
Climate change is affecting migratory patterns in myriad ways. One new pattern of migration is south-to-north whereby migrants from Central Asian countries with looming water shortages are moving north into Russia where fresh water is less of a problem. This migratory flow is modest at present but as climate change makes southern regions drier and hotter, the number of climate migrants in need of fresh water will increase. A second migratory trend encompasses displacement in Arctic regions. About one-fifth of Russia’s land mass lies north of the Arctic circle. As Russia’s Arctic zone heats faster than the rest of Russia, buildings and infrastructure which supported settlements are rendered unusable as ice melts and soil unfreezes. In this case, climate migrants must relocate to areas that are less susceptible to thawing.
A third migratory trend is long-term and encompasses outmigration from Russia’s Far North regions after Soviet-era subsidies disappeared. The lack of economic opportunity due to the factory closures combined with the harshness of the climate to drive people from Russia’s Far North. A fourth pattern, which is entirely new and a direct result of climate change, is migration into Arctic regions. As Arctic ice melts and new passageways open, new possibilities for mining, energy projects, and year-round shipping are bringing people back into the Far North. One such town, Pevek, Russia’s northernmost town above the Arctic circle in the remote northeast region of Chutotka, was opened in the 1940s as a gulag camp where prisoners mined for tin and uranium. The town’s population declined from 25,000 during Soviet times to 3,000 in the post-Soviet period, but in recent years has increased by 1,500 as people move back to take advantage of new opportunities in Arctic shipping, which rose by 50 percent last year. Arctic thawing has also opened new possibilities in the energy sector as companies scramble to find new deposits of oil and gas.
Russia’s status as a major grain producer faces short-term challenges associated with COVID-19 and annual weather-related anomalies. Over the longer term, Russia’s status as a grain exporter faces challenges due to climate change as grain production may pivot to the north and away from southern regions that will become drier and hotter. State policy reflects a preference to protect domestic food security even at the cost of restricting grain exports.
Stephen K. Wegren is Distinguished University Professor and Professor of Political Science at Southern Methodist University. His recent books include: Russia's Food Revolution: The Transformation of the Food System, London and New York: Routledge Publishers, 2021; and Russia’s Role in the Contemporary International Agri-Food Trade System, London and New York: Palgrave Macmillan, 2022.
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