Putin is pushing global food markets into Russian politics

Photographer: Andrey Rudakov / Bloomberg

Dmitry Bravkov is the kind of farmer that Vladimir Putin is proud of. The Russian president regularly praises 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 500 kilometers southwest of Moscow, Bravkov is suddenly on the wrong side of Kremlin policy. In three weeks, he will receive less for his wheat due to new tariffs and quotas designed to curb exports and lower domestic prices.

With Putin’s popularity barely back from rock bottom, the policy is an attempt to appease an audience battered by falling incomes and rising food costs. Protests over the weekend demanding the release of imprisoned opposition leader Alexei Navalny now give Putin one more reason to try to bolster support.

Russia’s position as the world’s largest wheat exporter means the move is already on reverberation in world markets and a short-term advantage in the domestic market can lead to long-term damage to confidence in the country as a reliable supplier.

“The introduction of the duty is an attempt to make money from farmers,” said Bravkov, 47, who employs 60 people in a village in the Bryansk region. “There is a lot of wheat in the world. If Russia doesn’t deliver it, someone else will. “

World grain prices have risen to their highest level in six years after bad weather hampered harvests in some key producers and China began agricultural sourcing. The domino effect is especially acute for developing countries, as food makes up a greater proportion of household spending.

There is already uncertainty about Russia’s restrictions hurt some buyers, with leading wheat importer Egypt canceling a tender on Jan. 12 – a rare occurrence – after the offer dried up.

“Russia wants 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 bragged about a record crop last year, ordinary Russians had to pay 20% more for bread and 65% more for sugar than in 2019. Reminders of food shortages in the Soviet Union and rising inflation after the collapse have pushed prices up. politically sensitive issue in Russia.

Russian history was not lost to Putin when last month he scolded ministers on national television for not doing enough to stop rising prices, even as he boasted of massive grain exports. Russia’s wheat output has nearly doubled in the past two decades.

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