What are the Agriculture policies of Russia?

Overview

Climatic and geographic factors limit Russia's agricultural activity to about 10 percent of the country's total land area. Of that amount, about 60 percent is used for crops, the remainder for pasture and meadow. In the European part of Russia, the most productive land is in the Central Chernozem Economic Region and the Volga Economic Region, which occupy the grasslands between Ukraine and Kazakstan.

More than 65 percent of the land in those regions is devoted to agriculture. In Siberia and the Far East, the most productive areas are the southernmost regions. Fodder crops dominate in the colder regions, and intensity of cultivation generally is higher in European Russia. The last expansion of cultivated land occurred in the late 1950s and early 1960s, when the Virgin Lands program of Nikita Khrushchev opened land in southwestern Siberia (and neighboring Kazakstan) for cultivation. In the mid-1990s, about 15 percent of the working population was occupied in agriculture, with the proportion dropping slowly as the younger population left rural areas to seek economic opportunities elsewhere.

Policy

Agricultural reform has proved to be a tough challenge for Russia during its transition to a market economy. The challenge comes from the legacy of the Soviet period and from deeply imbedded cultural biases against individualism. Because of agriculture's vital economic role, large-scale agricultural reform is necessary for success in other sectors. In the mid-1990s, however, private initiative was not rewarded, and inefficient input distribution and marketing structures failed to take advantage of agricultural assets.

There is a general concensus that there is great potential in Russia's agricultural industry. However to date, policy has been a patchwork of regional policies. To add to this, farm bankruptcy has been on the rise a possible result of years of 'kolhoz' and 'savhoz' establishments.

3 years ago Russia committed itself to gradually removing trade barriers to foreign meat exports and removing all barriers to meat exports by 2010. Russian farmers raised two main objections to unrestricted food imports. Firstly, Russian agriculture is still not ready to complete with the much better-organised farming sector in Europe. Secondly, high subsidies for European farmers give European farmers enormous advantages in the marketplace. In Europe, these subsidies total 90 billion dollars a year, and in Russia, just 4 billion dollars.

With hopes for quick accession to WTO looking pretty dim, the government decided to boost domestic food production. Farmers specialising in meat and dairy products will receive state subsidies, whilst import quotas for foreign meat will be slashed by hundreds of thousands of tons.