Putin pushes world food markets into Russian politics

Photographer: Andrey Rudakov / Bloomberg

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

But after 14 years running a dairy and grain farm 300 miles southwest of Moscow, Bravkov has suddenly found himself at the wrong end of Kremlin policy. In three weeks, it will get less for its wheat due to new tariffs and quotas designed to curb exports and reduce domestic prices.

With Putin’s popularity barely behind record lows, the policy is an attempt to mitigate an audience mistreated by falling incomes and rising food costs. Weekend protests demanding the release of jailed opposition leader Alexei Navalny now give Putin another reason to try to bolster support.

Russia’s position as the world’s largest wheat exporter makes the measure either reverberating through global markets and a short-term domestic advantage could lead to longer-term damage to faith in the country as a reliable supplier.

“The introduction of duty is an attempt to bring in 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 supply it, someone will. “

World grain prices have risen to their highest level in six years after bad weather hampered harvests of some key producers and China embarked on an agricultural purchase. The knock-on effect is particularly acute for developing nations because food is a larger part of household spending.

There is already uncertainty about Russia’s restrictions it hurt some buyers, with Egypt’s first wheat importer canceling a tender on Jan. 12, which is uncommon after supply bids ran out.

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

Although Putin boasted of a record harvest last year, ordinary Russians had to pay 20% more for bread and 65% more for sugar than in 2019. Memories of food shortages in the US Soviet Union and rising inflation after its collapse have made prices a politically sensitive issue in Russia.

Russia’s history was not lost on Putin, as he scolded ministers on national television last month for not doing enough to stop the rise in prices, even though he boasted of large grain exports. Russia’s wheat production has almost doubled in the last two decades.

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