by Dish Staff
While it’s never a good time for farmers to lose a big market like Russia, now is particularly inopportune. Bumper crops have pushed down prices in recent months, which is bad for producers as well as policymakers—the euro zone has been flirting with deflation this year, and a glut of produce once destined for Russia but dumped closer to home could push prices down even further[.]
“We can only hope that European consumers eat more pears,” a Belgian fruit farmer told the Wall Street Journal (paywall). … To add insult to injury, the upcoming apple harvest in Europe will be one for the record books, according to an industry forecast published yesterday. “The same day it’s announced we have a big crop our largest customer, Russia, stops buying, so it’s like a Black Thursday,” the commercial manager of a French apple concern told FreshPlaza. “The producers will be hit,” an Athens fruit seller told Euronews.
And Alec Luhn measures the impact, as well as the politics, of the ban in Russia:
State-controlled television has been downplaying any effects of the ban. “Consumers will barely be able to notice any price increase…. Even if people have to travel abroad for some dishes, it will lead to greater profits for Russian tourist firms,” reporters on Rossiya 24 exclaimed during a newscast on Friday, Aug. 8. But analysts predict an overall rise in food prices that will further exacerbate inflation, which has already risen beyond the Central Bank’s predictions to 7.5 percent.
The import ban doesn’t only affect luxury goods. Almost one-third of Russian families don’t obtain the minimum amount of calories and nutrients designated by the Health Ministry, according to the Russian Presidential Academy of National Economy and Public Administration, and they will likely have even more difficulty as cheap products from Ukraine are taken off the shelves.
Bershidsky highlights the ban’s potential impact on Putin’s shaky Eurasian Economic Union project, which the Russian president still wants as part of his legacy:
Putin has not given up. Rebuilding at least a smaller, narrower version of the Soviet Union remains at the center of his agenda. He wants it to be part of his legacy. Armenia — dissuaded by Moscow from EU association — and Kyrgyzstan are on track to join the EEU this year. As of 2015, the member states will harmonize their tax systems.
The other members of Putin’s union, however, don’t have the same interest in imposing or enforcing a ban on imported food. Belarus and Kazakhstan have nothing to retaliate against: Only Russia faces Western sanctions. “This is our domestic matter,” Belarussian President Alexander Lukashenko said yesterday. “If we need Polish apples, we buy them, but for our domestic market, not for Russia.” Kazakhstan President Nursultan Nazarbayev’s press service clarified after he talked to Putin on the phone that the food embargo was “Russia’s unilateral measure that doesn’t involve” other EEU members.
In Anne Applebaum’s view, the trade angle of this conflict puts to rest the “McDonald’s theory of international relations”:
This week, as Russia, a country with 433 McDonald’s, ramps up its attack on Ukraine, a country with 77 McDonald’s, I think we can finally now declare the McPeace theory officially null and void. Indeed, the future of McDonald’s in Russia, which once seemed so bright—remember the long lines in Moscow for Big Macs?—has itself grown dim. In July, the Russian consumer protection agency sued McDonald’s for supposedly violating health regulations. This same consumer protection agency also banned Georgian wine and mineral water “for sanitary reasons” at the time of the 2008 Russian-Georgian war, and it periodically lashes out at Lithuanian cheese, Polish meat, and other politically unacceptable products as well. …
This week—as Russia bans most American, European, Canadian, Australian, and Japanese agricultural goods—globalization suddenly began to unravel a lot faster than anybody imagined. Vladimir Putin knew sanctions were coming and openly declared that he didn’t care. He also knows that a trade war will hurt a wide range of his countrymen, but he didn’t mind that either.