Putin puts world food markets in Russian politics

Photographer: Andrey Rudakov / Bloomberg

Dmitry Bravkov is the kind of farmer who makes Vladimir Putin proud. The Russian president regularly supports his country’s rise to the top of the world’s agricultural exporters as another sign of his global power.

But after 14 years of running a dairy and grain farm 300 miles southwest of Moscow, Bravkov suddenly found himself at the wrong end of Kremlin policy. In three weeks, it will receive less for its wheat due to new tariffs and quotas designed to reduce exports and reduce domestic prices.

Given that Putin’s popularity has barely returned from record lows, the policy is an attempt to alleviate an audience battered by declining revenues and rising food costs. This weekend’s protests demanding the release of imprisoned opposition leader Alexei Navalny now give Putin another reason to try to support him.

Russia’s position as the world’s largest wheat exporter means the move is already in place reverberation in global markets and a short-term domestic advantage could lead to a longer-term deterioration of faith in the country as a reliable provider.

“The introduction of the tax is an attempt to collect farmers,” said Bravkov, 47, who has 60 employees in a village in the Bryansk region. “There is a lot of wheat in the world. If Russia does not provide it, someone else will. “

World grain prices have risen to their highest level in six years after bad weather hampered harvests at some key producers and China engaged in agricultural shopping. The knock-on effect is particularly acute for developing countries, as food accounts for a larger share of household spending.

Uncertainty over Russia’s restrictions already existed hurt some buyers, Egypt’s top wheat importer canceling a tender on January 12 – a rare occurrence – after supply bids dried up.

“Russia wants to have it both ways,” said Abdolreza Abbassian, a senior economist at the UN Food and Agriculture Organization in Rome. “It wants to have a large share of the export market and, at the same time, not be exposed to problems in the global food sector. Usually, such plans are not successful in the long run. ”

While Putin boasted a record harvest last year, ordinary Russians were forced to pay 20% more for bread and 65% more for sugar than in 2019. Memories of food shortages in the Soviet Union and rising inflation after its collapse have made prices a politically sensitive issue in Russia.

Russia’s history has not been lost to Putin, as ministers scolded him on national television last month for not doing enough to stop rising prices, even though he boasted huge grain exports. Wheat production in Russia has almost doubled in the last two decades.

“At the time, they said that everything was available in the Soviet Union, only it was not enough for everyone, but it was not enough because there were shortages,” he said. “It may not be enough now because people don’t have enough money to buy certain products at the prices we see on the market.”