Russian AIC: 18 months in the WTO

By Vestnik Kavkaza

When Russia negotiated to join the World Trade Organization, opponents of the move spoke about a possible crisis in agriculture of the country. Simplified import of foreign goods and restriction of state support could lead to unpredictable consequences for the Russian AIC. However, it appeared that positive dynamics in agriculture was registered in certain spheres.

According to the minister of agriculture, Nikolai Fedorov, at the end of 2012 food export turnover grew by over 25% compared to 2011. This is related to certain consequences of the embargo, as you must understand, despite the fact that the 2012 grain harvest was not very high. But Russia exported more grain thanks to the reserves that remained after the embargo. And such an advantageous sector as sunflower oil came out on top. Last year its deliveries increased 280%. “I’m talking about reworked units: it’s not raw materials we sell, but produce with added value that has undergone several production units,” Fedorov said.

In general, even though compared to 2012 Russia’s membership in WTO didn’t influence significantly volumes of Russian agricultural products, but in certain spheres economic conditions worsened.

According to the Federal Customs Service, in 9 months of 2013 food products and agricultural raw materials for $29 852 million were imported to Russia. It is bigger than the previous ratio by 5.4%.

Meat import decreased by 14%. Pork import reduced by 14.5%. Poultry import decreased by 3.2%. At the same time, import of broiler chicken from the USA grew by 2.7%.

The question on the level of customs security of rice and pork is still urgent, especially for pig import. The Ministry of Agriculture of Russia plans to hold intensive talks on the issue with colleagues from the WTO.

Export of food products and agricultural raw materials was $10.6 billion in 9 months; it is smaller than in the same period of 2012 by 13.6%.

A proportion of Russian agricultural products and good in the whole volume of internal market resources is the following in 2013:

-          grain – 98.8%

-          potato – 97/6%

-          seed oil – 81/4%

-          sugar – 93.8%

-          milk and milk products – 76.9%

-          meat and meat products – 77.3%

At the same time, Russia as a full member of the WTO is obliged to reduce state support of agriculture down to $9 billion by 2013 and to $4.4 billion by 2018. The agreement on volumes of reducing measures by 2017 enables implementation of all sub-programs on development and modernization of agriculture, which are required by the State Program.

The Federal Agricultural Department promises to continue development and implementation of such supporting mechanisms which will enable fulfillment of WTO duties and norms without any harm to Russian agricultural producers.