Staunton, Sept. 16 – The harvest in Russia this year is “magnificent,” Natalya Zubarevich says, and there won’t be a famine or radical price increases for basic foodstuffs this fall and winter. But a combination of Russian government policies and limits on the ability of producers to export grain will mean first farmers and then the population will ultimately suffer.
The Russian government introduced export duties to ensure that there would be enough food for the domestic market and that it would be available without radical increase in price, the Moscow economic geographer says; but this has had consequences (newizv.ru/article/general/16-09-2022/natalya-zubarevich-da-urozhay-roskoshnyy-da-goloduhi-net-no-u-agrariev-problemy).
It means that farmers have not been able to export as much as they hoped and thus to earn the money they expected; and that in turn is affecting their calculations about how they should behave in the future, with many deciding to purchase less equipment and possibly plant less next year so as to limit their losses, Zubarevich says.
And that has been compounded by another problem, one not the result of sanctions but of the operations of the marketplace: International insurance companies have become less willing to provide policies to ships carrying cargo to or from Russia because of the risks of military actions in the Black Sea or sanctions elsewhere.
As a result, the costs of exporting Russian agricultural products have gone up, further reducing the profits Russian farms can make and thus likely depressing production in the future, the specialist on regional economics in the Russian Federation says. That means that any benefit from the large harvest this year may be undercut by smaller ones in the future.