Russia hits back, bans West food
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RUSSIA banned food imports from the West yesterday in retaliation for sanctions over Ukraine, an unexpectedly sweeping move that will cost farmers in North America, Europe and Australia billions of dollars.
The United States and the European Union have accused Russia, which annexed Ukraine’s Crimean Peninsula in March, of supplying arms and expertise to a pro-Moscow insurgency in eastern Ukraine, and have sanctioned individuals and companies in Russia in retaliation. Russia denies supporting the rebels and accuses the West of blocking attempts at a political settlement by encouraging Kiev to use brutal force to crush the insurgency.
The ban, announced by a somber Prime Minister Dmitry Medvedev at a televised Cabinet meeting in Moscow, covers all imports of meat, fish, fruit, vegetables, milk and milk products from the US, the EU, Australia, Canada and Norway. It will last for one year.
“Until the last moment, we hoped that our foreign colleagues would understand that sanctions lead to a deadlock and no one needs them,” Medvedev said. “But they didn’t, and the situation now requires us to take retaliatory measures.”
Russia depends heavily on imported foodstuffs, most of it from Europe, particularly in Moscow and other large, prosperous cities. In 2013, the EU exported 11.8 billion euros (US$15.8 billion) in agricultural goods to Russia, while the US sent US$1.3 billion in food and agricultural goods.
The Netherlands, one of the world’s largest agricultural exporters, sends 1.5 billion euros worth of agricultural products to Russia annually and stands among the countries with the most to lose.
Albert Jan Maat, chairman of the Dutch Federation of Agriculture and Horticulture, warned that the Russian ban will cause prices to drop across Europe because of oversupply, and called on the Dutch government and the EU to help farmers. Exports to Russia account for about a tenth of EU agricultural exports.
Agricultural sector
Medvedev argued that the ban would give Russian farmers, who have struggled to compete with Western products, a good chance to increase their market share. But experts said local producers will find it hard to fill the gap left by the ban, as the nation’s agricultural sector suffers from inefficiency and a shortage of funds.
Agriculture Minister Nikolai Fyodorov said the sector would need additional subsidies equivalent to US$3.8 billion in the next few years to pump up production.
The government said it will move quickly to replace Western imports with food from Latin America, Turkey and former Soviet nations.
Medvedev said Russia hopes the ban will stop the West from ramping up sanctions, which it has done several times this year as the crisis in Ukraine has deepened.
“We didn’t want such developments, and I sincerely hope that our partners will put a pragmatic economic approach above bad policy considerations,” he said.
He said Russia’s ban could be lifted before the year is up if “our partners show a constructive approach.”
If the West doesn’t change course, Russia may introduce restrictions on the import of planes, navy vessels, cars and other industrial products, Medvedev warned. He also said that in response to EU sanctions against Russian low-cost airline Dobrolet, Russia is also considering a ban on Western carriers flying over Russia on flights to and from Asia, which would significantly swell costs and increase flight time.
EU Commission spokesman Frederic Vincent voiced regret about the ban. He said the Commission still has to assess the potential impact, and reserves “the right to take action as appropriate.”
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