Putin drives global food markets into Russian politics

Photographer: Andrey Rudakov / Bloomberg

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

But after 14 years running a dairy and grain farm 480 kilometers southwest of Moscow, Bravkov suddenly found himself on the wrong side of the Kremlin’s policy. In three weeks, he will receive less for wheat because of new tariffs and quotas designed to curb exports and reduce domestic prices.

With Putin’s popularity barely returning from low records, the policy is an attempt to appease an audience hurt by falling incomes and rising food prices. The weekend protests demanding the release of imprisoned opposition leader Alexei Navalny now give Putin another reason to try to get support.

Russia’s position as the world’s largest wheat exporter means that change is already underway reverberating in global markets, and a short-term domestic advantage can lead to long-term damage to faith in the country as a reliable supplier.

“The introduction of the tax is an attempt to profit 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 does not provide, someone else will. “

World grain prices skyrocketed to the highest level in six years after bad weather damaged harvests in some major producers and China started a wave of agricultural purchases. The indirect effect is particularly acute for developing countries because food represents a larger share of family spending.

The uncertainty about Russia’s restrictions has it hurt some buyers, with Egypt’s leading wheat importer canceling an auction on January 12 – a rare occurrence – after supply offers dried up.

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

While Putin bragged about a record crop last year, ordinary Russians had to shell out 20% more for bread and 65% more for sugar than in 2019. Memories of food scarcity in the Soviet Union and rising inflation after its collapse made it prices politically sensitive issue in Russia.

Russia’s history was not lost on Putin when he rebuked ministers on national television last month for not doing enough to stop prices from rising, even while he bragged about huge grain exports. Russia’s wheat production has almost doubled in the past two decades.

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