Russia's Farm Comeback

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Only 20 years ago, images of disgruntled Soviet citizens standing in long queues near rundown groceries were a common sight on Western television. But recently, the fruits of the Russian zemlya (earth)have made their way to dinner tables from Oslo to Miami. The resurgence of Russian agriculture introduces a new and intriguing dimension into relations with the often bellicose giant, writes Stephen K. Wegren, a political scientist at Southern Methodist University: food policy.

In the years leading to and following the demise of the Soviet Union in 1991, Russians endured “chronic [food] shortages, poor quality, poor selection, and even food rationing,” Wegren writes. Long-standing state subsidies for farming collapsed along with communism, bringing agricultural production to a halt and causing food prices to skyrocket—they rose a mind-boggling 2,670 percent in 1992. During these tough years, much of the food Russians managed to get their hands on came from individual garden plots the Soviet government had parceled out when the food crisis dawned in the 1980s.
Buying food from other countries became common practice, with Moscow officials estimating that large Russian cities imported more than 70 percent of their meat in the mid-1990s. In 1998, after a particularly poor harvest, Russia had to accept nearly $1.5 billion in food aid and humanitarian assistance from the United States and the European Union. This “political humiliation” spurred the once proud superpower to make big changes to its food policy, Wegren writes.
Over the next few years, the Kremlin plumped the coffers of the country’s agricultural producers by forgiving farm debts, simplifying tax regimes, and increasing financial support through investment, interest-rate subsidies, and credit extensions. The government pledged to shield grain producers from a devastating drop in prices during good harvests (when supply flooded the market and drove down prices) by buying up the country’s surplus grain. In the interest of becoming “food secure,” the state introduced a menu of protectionist quotas, tariffs, and bans to squeeze foreign producers out of the Russian market.
The new policies seem to have paid off: The volume and yield of food commodities produced in Russia have vastly improved, and 78 percent of the country’s farms reported breaking even or making a profit in 2007, compared with only 11 percent in 1998. Russia rose to become the world’s third largest wheat exporter behind the United States and Canada, although a drought in 2010 depressed output of wheat and other grains.
Russia’s agricultural rebound doesn’t have everyone applauding. Moscow’s “boorish international economic behavior,” including politically motivated embargoes on French poultry in 2006, Indian rice in 2007, and Georgian wine in 2008, has made many countries wary. Even though Russia is not yet a leading global food producer, the world does not want a new Iron Curtain to snap down around the country’s verdant heartland.


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