A USDA report in early 2010 predicted that Russian wheat production would exceed US production this year for the first time in its history.1However, this symbolic threshold might not actually be reached this year. Since June, Russia has been hit by its worst droughts in 130 years. Certain regions in central Russia, the Volga region, the southern Urals, and Siberia are experiencing exceptional heat waves of over 40°C in the shade that are threatening the harvest, with apparently nine million hectares of drought-stricken crops, about a fifth of harvest of the area under cultivation this year. According to the business newspaper Kommersant, losses for the Russian agricultural sector taken as a whole could amount to one billion dollars this year. Viktor Zoubkov, Deputy Prime Minister in charge of Agriculture, described it as “a calamity”, and decreed a state of emergency in sixteen regions of the Russian Federation.
This situation, occurring at a time when Russia is seeking to become a major international force in agriculture, acts as a reminder that agriculture, far more than any other sector, is subject to unforeseeable vagaries, and particularly the weather. Whatever the policy measures put in place to promote the agricultural sector, it will never be possible to fully anticipate these risks. They will therefore always represent a threat to world food security, and will become all the greater if agricultural production is concentrated in a few “global breadbaskets”. Yet another reason to have governance instruments, along the lines of stocks, to be able to regulate agricultural markets and reduce the risks of price volatility that are exacerbated by such an event.
1 Cf. momagri, “Russia’s return to international agricultural markets”, 24/05/2010 http://www.momagri.org/UK/focus-on-issues/Russia-s-return-to-international-agricultural-markets_687.html