On Wednesday, the Russian government announced it would halt agricultural imports from the United States and European Union for at least a year.
Russian action comes after U.S./EU sanctions -- including the freezing of assets and loans to many Russian companies and industries -- were recently imposed in retaliation for Russian actions in the Crimean Peninsula and assistance to rebels in east Ukraine.
The USDA says agricultural exports to Russia were worth some $1.3 billion in 2013 (tops was poultry at $310 million). The EU export number was nearly $16 billion. To put the ban in perspective, overall Russia imported $43 billion worth of agricultural goods in 2013.
Following the West’s sanctions it was guaranteed Russian President Vladimir Putin wouldn’t stand pat. Reports say Putin’s directive could mean zero U.S. agricultural exports enter the country.
“This is clearly a political move,” said Bob Stallman, American Farm Bureau Federation president. “It is unfortunate that the biggest losers in this will be Russian consumers, who will pay more for their food now as well as in the long run.
“America’s farmers and ranchers would have been more surprised if Russia’s leaders had not announced bans and restrictions on food and agricultural imports. They do so regularly for seemingly small reasons and now they have to deal with sanctions imposed by our nation and others.”
On the same page was Ray Gaesser, American Soybean Association president. “Russia is a key trading partner for U.S. agriculture, and the Russian people are our customers like so many others in the world’s emerging markets. However, we would add that Russia, while very important, is only one of hundreds of our customers worldwide. By limiting his people’s access to American soybeans and other products, (Putin) does a great disservice to his Russian countrymen and women.
“ASA pushed hard for the establishment of permanent normal trade relations (PNTR) with Russia last year because of the significant growth and opportunity presented in the Russian marketplace. Soybeans are the biggest crop export from the U.S. to Russia, due in large part to that country’s burgeoning economy and growing demand for meat. Sanctions and bans like the one proposed by President Putin serve only to hurt the Russian people by limiting their access to the food and products they need and want.
“It remains to be seen which commodities and products appear under the Russian ban, and while we certainly want to see a key market protected, it is equally important for American farmers to demand a higher standard from our trading partners. In this case, that standard is not being met, and we urge President Putin to rescind this ban.”
In a university report, Kurt Guidry, LSU Agcenter agricultural economist, put the Russian announcement in context. “While it is never a positive when we lose a potential market, we have to consider the size of that market to really determine its potential impact."
Further, said Guidry, “While Russia makes up a small percentage of total sales for most commodities, they still purchase roughly $1 billion in agricultural products from the U.S. each year. It is just that total sales of those products are in excess of $100 billion, so Russia’s contribution is relatively small.”