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Why is Russia Restricting its Fertiliser and Crop Exports?

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  • William Liefert

Abstract

Both Russia and Ukraine are major agricultural exporters, especially of grain and sunflowerseed products, and Russia is the world's leading supplier of fertiliser. Russia's invasion of Ukraine has disrupted world markets for these commodities, driving up prices and threatening world food security. Russia argues that a major cause of this trade disturbance is the economic sanctions that Western countries have imposed against it, despite the efforts of the West to exempt Russian agricultural trade from the sanctions. However, throughout its war with Ukraine, Russia has maintained heavy restrictions (involving quotas and taxes) on its exports of fertiliser, grain and sunflowerseed commodities. The trade controls bring major economic benefits to the Russian economy and government, especially in the current war environment. The gains include: keeping more output within the country, which lowers prices for consumers; earning the government additional revenue; and improving the country's terms of trade in the exported products. However, given that Russia so strongly asserts that Western sanctions are hurting the less rich countries of the world by disrupting world agricultural markets and pushing up prices, the export restrictions make Russia vulnerable to criticism of inconsistency (if not hypocrisy), when its own export controls have the same effects. La Russie et l'Ukraine sont d'importants exportateurs agricoles, notamment de céréales et de graines de tournesol, et la Russie est le premier fournisseur mondial d'engrais. L'invasion de l'Ukraine par la Russie a perturbé les marchés mondiaux de ces produits, faisant grimper les prix et menaçant la sécurité alimentaire mondiale. La Russie affirme que l'une des principales causes de ces perturbations commerciales réside dans les sanctions économiques que les pays occidentaux lui ont imposées, malgré les efforts de l'Occident pour exempter le commerce agricole russe de ces sanctions. Cependant, tout au long de sa guerre avec l'Ukraine, la Russie a maintenu de lourdes restrictions (impliquant des quotas et des taxes) sur ses exportations d'engrais, de céréales et de graines de tournesol. Les contrôles aux frontières apportent des avantages économiques majeurs à l'économie et au gouvernement russes, en particulier dans le contexte de guerre actuel. Les gains comprennent: le maintien d'une plus grande production à l'intérieur du pays, ce qui fait baisser les prix pour les consommateurs; des revenus supplémentaires pour le gouvernement; et de meilleurs termes de l'échange du pays pour les produits exportés. Cependant, étant donné que la Russie affirme avec tant de force que les sanctions occidentales nuisent aux pays les moins riches du monde en perturbant les marchés agricoles mondiaux et en faisant monter les prix, les restrictions à l'exportation rendent la Russie vulnérable aux critiques d'incohérence (voire d'hypocrisie), lorsque ses propres contrôles à l'exportation ont les mêmes effets. Sowohl Russland als auch die Ukraine sind wichtige Agrarexporteure, insbesondere von Getreide‐ und Sonnenblumenkernerzeugnissen, und Russland ist der weltweit führende Anbieter von Düngemitteln. Der Einmarsch Russlands in die Ukraine hat die Weltmärkte für diese Rohstoffe beeinträchtigt, die Preise in die Höhe getrieben und die weltweite Ernährungssicherheit gefährdet. Russland argumentiert, dass eine Hauptursache für diese Handelsstörung die Wirtschaftssanktionen sind, die die westlichen Länder gegen das Land verhängt haben. Dabei versuchen die westlichen Länder, den russischen Agrarhandel von den Sanktionen auszunehmen. Während des gesamten Zeit des Angriffskrieges gegen die Ukraine hat Russland jedoch seine Ausfuhren von Düngemitteln, Getreide und Sonnenblumenkernerzeugnissen stark eingeschränkt (durch Quoten und Steuern). Die Handelskontrollen sind für die russische Wirtschaft und Regierung von großem Nutzen, insbesondere im derzeitigen Kriegszustand. Zu den Vorteilen gehören: mehr Produktion im Land zu halten, was die Preise für die Verbraucherinnen und Verbraucher senkt, zusätzliche Einnahmen für die Regierung und die Handelsbedingungen des Landes für die ausgeführten Produkte zu verbessern. Russland behauptet vehement, dass die westlichen Sanktionen den weniger reichen Ländern der Welt schaden, indem sie die Weltagrarmärkte stören und die Preise in die Höhe treiben. Jedoch machen diese Behauptungen die Ausfuhrbeschränkungen Russlands anfällig für den Vorwurf der Inkonsequenz (wenn nicht gar der Heuchelei), wenn die eigenen Ausfuhrkontrollen die gleichen Auswirkungen haben.

Suggested Citation

  • William Liefert, 2024. "Why is Russia Restricting its Fertiliser and Crop Exports?," EuroChoices, The Agricultural Economics Society, vol. 23(1), pages 4-10, April.
  • Handle: RePEc:bla:eurcho:v:23:y:2024:i:1:p:4-10
    DOI: 10.1111/1746-692X.12419
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    References listed on IDEAS

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    1. Goretzki, Philipp & Perekhozhuk, Oleksandr & Glauben, Thomas & Loy, Jens-Peter, 2019. "Price discrimination and market power in the international fertiliser market: Empirical evidence for exports from Russia," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 5(2), pages 5-24.
    2. William M. Liefert & Olga Liefert, 2012. "Russian Agriculture during Transition: Performance, Global Impact, and Outlook," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(1), pages 37-75.
    3. Yipu Pang & Jingqi Dang & Wei Xu, 2021. "Elasticity of Substitution, Price Effect and Sustainable Fertilizer Use: A Translog and SUR Analysis in China," Prague Economic Papers, Prague University of Economics and Business, vol. 2021(2), pages 189-215.
    4. Maksym Chepeliev & Maryla Maliszewska & Maria Filipa Seara e Pereira, 2023. "The War in Ukraine, Food Security and the Role for Europe," EuroChoices, The Agricultural Economics Society, vol. 22(1), pages 4-13, April.
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