FOOD SAFETY IN THE RUSSIAN FEDERATION, ITS PROBLEMS WITH THE SOLUTIONS.

Author:Poltarykhin, Andrey Leonidovich
Position::Report
 
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INTRODUCTION

The recent state policy in the development of the agro industrial sector creates the favorable conditions promoting the growth in agriculture and food industry. Indeed, in the 90s the dependence on import reached 70% for some food. Today the situation has significantly changed. 2010 saw a doctrine of food security defining the key spheres and objectives in agriculture development in Russia. The experts figure out that in 2010 the import of the food from the countries threatening to introduce the sanctions was 13% only, that is, $43.1 bln.

METHODS

With the reduction in the overall rate of the country's economic growth and the world political tension due to the events in Ukraine and the integration of Crimea into Russia the agro industrial sector illustrates a stable growth dynamics. The Ministry of Economic Development and Trade of Russia estimates that in 2014 the production index of agricultural products is 103.5% the production index of food industry is 103.5 per cent. In 2015-2017 production growth rate is was 3.5-4.5% in agriculture, while in the food industry it is predicted to be 3.5-4 %.

However, one should not be satisfied with the figures, the experts believe that food security requires one to produce more meat, fish and fish products, dairy produce on the total sum of about $7 bln. And the same amount of money can be spent on the World Football Championship organization in 2018 as on the restoration of 40 mln ha of useless land with its return to the crop rotation.

The volume of the budget financing allocated on the support and probably on the development of the agriculture as well is RU 147.2 bln in 2014 (RU 218.5 bln in 2017). In 2018 the federal budget allocates RU 288.2 bln, in 2016 it is RU 143.2 bln; in 2017 it will be RU 168.2 bln (within the State Program). The Ministry of Agriculture of Russia figures out that the calculated additional need in the subsidies with regard to the intensive expansion of domestic production up till 2010 is more than RU 580 bln.

The potential re-export from the Customs Union member-states and CIS member-states which practice free trade with Russia is one of the additional risks associated with embargo introduction. What is more, there is the unreasonable price rise on the sanctioned list of goods from the friendly countries Russia is negotiating with to increase the delivery volume.

The consequences from the sanctions imposed against the Russian banks (more expensive borrowings, obstacles to obtain them) can become negatives factors for the investors and thus can prolong the periods to implement the plans in modernization and in production increase (Boldyreva, 2017).

The depreciation of the ruble didn't turn out to be an expected gain for some manufacturers of the agricultural raw materials since many participants of the market experience some difficulty in import resource delivery-seeds, agricultural machines, equipment and agricultural livestock.

Recently the agro food sector in Russia is clearly characterized by the main segments with the vivid advantages in the foreign and domestic markets. Comparative advantage index of Russia in a number of exported agro food products shows that wheat, sunflower seeds, sunflower oil, pastas and confectionery products are Russian competitive goods on the world market. The meat of cattle, milk produce is rather weak on the market with relatively low dependence on import. The country can improve the situation and reduce the level of import dependence with rice, potato, oil seed rape, poultry in the world system.

Up till now the promotion of the products in the world markets is constrained by the non-implemented advantages from the participation in WTO and the Customs Union, these advantages are low...

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