From back in 2000, Russia has become increasingly essential for world agriculture. The state together with Ukraine has surfaced as major grain exporters. Due to this, Russia has emerged as an agricultural and food importer. However, the annexing of Ukraine and the West in 2014 put the country in a geopolitical crisis with the US, European Union, and other Western countries that has led to inflicted sanctions from the mentioned countries. The sanctions have cut Russia off from foreign investment and credit, and have led to increased capital flight. There has also been a huge reduction on world price of oil. In the past decades, Russia has run substantial trade surplus, but owing to the sanction, there has been a major decrease in value of the ruble and US dollar.
The ban on agricultural and food imports from the US and other Western countries following the sanctions has put Russia in a major economic crisis, thus disrupting its agricultural and food economy. The ban has affected EU’s agricultural exports of dairy products, fruits and vegetables, as well as the Russian consumers. Russia has substituted the ban by importing products from non-embargoed countries.
Delegate your assignment to our experts and they will do the rest.
The crisis has brought about a number of effects. The depreciation of the ruble will make agricultural exports of grain and sunflower seeds more cost competitive in global market. This is making them to withhold grains for domestic use with an expectation for future rise in price, which has created a grain shortage in the state. It is also making the Russian farmers to lack fertilizer since in previous years Russia has been an exporter of fertilizers. However, the government has asked the suppliers of fertilizer to sell it domestically at lower prices. This has made them to reduce the price of fertilizer by a third. Due to increased prices in food, the government of Russia might consider lifting or reducing the ban on imports to improve agricultural and food economy.
