Is Russia facing a shortage of basic foodstuffs?

In the context of the current foreign political tension, many citizens are worried about their economic well-being. In particular, on February 24, an increased demand for cash currency was noted in a number of banks. But, according to economists, there is no reason to worry about food in the current situation. Agricultural production in RUSSIA continues to grow. And, say, imported buckwheat occupies only 0.3% in the market structure, and since 2014 the volume of imported cereals has decreased nine times. In addition, in case of an emergency, the state has significant food reserves.

Any external restrictions and instability will not have a significant impact on the Russian market for buckwheat and other essential products, as domestic production fully meets the needs of the domestic market, experts in the field of economics believe.

“The Russians are not threatened with a shortage of buckwheat and other life-sustaining foodstuffs this year,” Rudolf Bulavin, HEAD of crop production at the Center for Agroanalytics (at the Ministry of Agriculture), assured Izvestia. — For the main product items, domestic production provides demand. The share of imports in domestic consumption of grain is 0.2%, eggs and egg products - less than 2%, MEAT and meat products - less than 6%, potatoes - 6%, MILK and dairy products - 20% Moreover, for meat in January-September 2021, exports exceeded imports by 3%.

Import substitution has already had a significant impact on the domestic production of most food products, emphasizes Irina Svetlova, an analyst at the Center for the Economics of Markets.

“At the moment, for key food products, domestic production covers the needs of the domestic market and food security,” says Irina Svetlova. — Deficit can only be provoked by the rush behavior of consumers and the EXPORT policy of manufacturers seeking to adjust prices on the domestic market to the prices at which Western buyers are ready to buy Russian food products.

According to Elena Razumova, adviser to the president of the Center for Strategic Research (founded by the Ministry of Economic Development of the Russian Federation), there is no threat of food shortages in Russia, but disruptions in the supply of palm oil cannot be ruled out, which will lead to a rise in prices for other types of vegetable oils. “Also, the euro exchange rate and a possible ban on the export to Russia of high-tech products for the agro-industrial complex — seeds, genetic resources, veterinary drugs, vitamins and other similar products — will also affect the rise in prices,” the economist said.

“There are no grounds and reasons for any panic,” Vladimir Vinnitsky, a member of the Public Chamber of the Russian Federation, is convinced. - Under any circumstances, the average annual consumption of essential products by the citizens of our country is guaranteed by food security standards.

Vinnitsa also recalled the food reserve of the state. In case of extreme situations, this reserve will be able to provide our citizens for a long time.

The first vice-president of Opora Rossii, Pavel Sigal, notes that Russia buys quite a few products from non-CIS countries and produces almost everything itself. The share of food products and raw materials for their production is only about 12% in the structure of Russia's total imports.

- As for the risks for the export of our food, the main importers of Russian food - CHINA , the United Arab Emirates, Egypt and other countries - will most likely behave independently and pursue their interests, - the Vice President of Opora Rossii is sure. So, food security for us remains at a high level.

Dmitry Ryakhovsky, Head of the Department of Taxes and Tax Administration at the Financial University under the Government of the Russian Federation, notes that we produce all strategically important products for food security in the country. Of course, there may be some difficulties in terms of importing some seeds and breeding material, but sanctions in this regard will have a greater negative effect on foreign partners for whom the Russian market is a priority. According to the expert, a guarantee of food security is the presence of large operating agro-industrial groups that provide a full cycle from producer to consumer and a developed agricultural infrastructure.

“The existing experience of the Federal Tax Service of Russia in big data analytics in terms of analyzing retail receipts online of cash registers, which was actively tested during the pandemic, will allow us to respond online and stop possible threats associated with [rush unmotivated demand],” the expert points out. “In this regard, in the coming days, we should expect an increase in retail sales of shelf-stable products, which will quickly pass.

Marina Petrova, Deputy Chairman of the MCCI Committee for the Development of Entrepreneurship in the Agro-Industrial Complex and CEO of Petrova 5 Consulting, emphasizes that food production is localized in Russia, and in a number of industries completely (meat industry, bread and bakery products, drinking milk , fermented milk products, cottage cheese).

However, according to her, the number of cattle remains a big problem, which needs to be updated, because in Russia they have not learned how to reproduce Holstein cows.

“The shortage of basic food products does not threaten Russians, since Russian agricultural producers produce all the main types of food in sufficient quantities,” explains Vladimir Surovtsev, DIRECTOR of the Institute of Agrarian Economics and Rural Development of the St. Petersburg Federal Research Center of the Russian Academy of Sciences. “Thus, farmers will provide supply on the food market with normal demand.

However, he adds, one should not discount the possible consequences of excessive demand. In the conditions of an absolutely free market, the rush demand is quickly knocked down by a multiple increase in prices. Therefore, in the context of price regulation for socially significant products by the government and the Ministry of Agriculture, additional measures will be required to increase supply volumes.

As a priority, Surovtsev proposes the refusal to collect from a significant part of agricultural producers the subsidies previously paid to them.

“It is important and urgent for us to start developing a self-adjusting economic mechanism for regulating export duties on agricultural products, since the volatility of exchange rates can affect the domestic food market,” concluded Vladimir Surovtsev.

Associate Professor of the Department of Finance and Prices of the PRUE G.V. Plekhanova Elena Voronkova notes that the food price index regularly exceeds the average consumer price index. Last year, this excess reached 1.42 percentage points. Consumer expectations of the population make their contribution to price dynamics in the food market. In the fourth quarter of last year, the consumer confidence index rose to 23% (for comparison: in the first quarter of 2020 it was 11%).

Meanwhile, Elena Voronkova notes, statistics show that last year the indicators of the food security program for meat, vegetable oil, fish, and grain were met. In the meantime, difficulties remain in achieving food security with milk and dairy products, potatoes, vegetables, fruits and berries.

“One of the key problems of food security in our country can be considered a relatively low level of real incomes of the population, the stability and growth of which are determined by inflationary processes, which the mega-regulator is not yet fully able to cope with,” the expert says. “Nevertheless, at the end of the year, the level of real incomes of the population increased by more than 3%, and the average per capita cash income — by more than 10%.

Ministry of Economic Development: annual inflation in Russia accelerated to 8.84% from February 12 to February 18 

Izvestia sent inquiries about the extent to which food security is established in the Russian Federation to the Ministry of Industry and Trade, the Ministry of Agriculture, the Federal Antimonopoly Service, and the Ministry of Economic Development.