A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Moscow is playing Russian roulette with grain farmers

June 8, 2015

“Frozen” might quite be an understatement to describe the relations between Europe and Russia, and with an increasing number of political and diplomatic clashes––from the Russian embargo to the European sanctions and the officials who have been declared personae non gratae on the Federation’s soil––getting out of the crisis does not seem forthcoming.

The agricultural issue is one of the key subjects of tensions in this crisis. Yet in this conflict, a recent decision by Moscow might in contrast further weaken the country’s agriculture and ultimately weigh on global agricultural markets.

As a matter of fact, Russia will, starting July 1, 2015, impose new barriers on wheat exports, although lower than those applied since the start of the year because of the fall of the ruble. This floating levy will reach at least the minimal symbolic amount of 50 rubles per ton (€0.87/t) for wheat prices below 11,000 rubles (€191) per ton, and then will be raised gradually.

Yet, such taxes meant to provide the country’s with long-term protection from soaring prices in case of new drop of the ruble, might punish its farmers, to the extent that they can be likened to dissuasive measures to discourage grain farmers to sell their output abroad, thus preventing wheat prices to increase in Russia.

This declaration is especially worrisome and frustrating for Russian grain farmers, all the more so since the latest crop has been one of the best in post-Soviet times––105 million tons for all types of grains. For some grain trade representatives, the measures only make concluding long-term contracts more unpredictable, as they will, now more than ever, hinge on the wheat price and the ruble volatility.

In cases of wheat prices rising to $300/ton, grain growers will lose up to 20 percent of their incomes frets Andreï Siozov, Managing Director of the consultancy firm SovEcon. Once again, the Russian decision confirms the country’s predilection for stop-and-go policies, which this time might penalize its own grain production while the nation ranks fourth among the world’s major wheat exporters.

For Moscow, the strategic nature of agriculture seems to take a variable geometry, and currently only meets the immediate socio-economic and geo-political interests at the expense of the country’s farmers. However, the threat of reverting to protectionism is real today and will not settle its agricultural future or the stability of international markets.

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Paris, 19 June 2019