1. The Impact of Russia’s 2010 Grain Export Ban Dr. George Welton

2. Short term impact of ban Does not seem to have kept food prices down. Helped to accelerate food price increases globally. Increased the costs for international consumers of Russian grain.

3. Long term impact of ban Higher food prices (in Russia and global) as the ban: – Reduces investment in grain production in Russia – as it damaged the reliability of returns – Reduces trust in Russia as a grain provider – Increases the likelihood of food prices hikes in the future

4. Production of Grain 1992-2009 (million tons) 19921995200020052006200720082009 % of total grain crop in 2009 Wheat, winter and spring 46.230.134.547.644.949.463.861.764% Barley, winter and spring 2715.81415.71815.623.217.919% Oats11.28.664.54.95.45.85.46% Rye, winter and spring 13.94.15.43.633.94.54.34% Corn for grain 2.11.71.53.13.53.86.744% Other6.3923.063.883.283.953.414.163.283% Total 106.79263.465.377.878.281.510896.6 100%

5. Exports of Wheat and Rye 2006-2010 (Calendar Year) Exports of wheat and rye20062007200820092010 Volume (million tons)914121611 Total value ($m)13193544287526241849 Price per ton ($)142251245163175

6. Russian agricultural policy up until 2010 1990’s and failed liberal market reforms Agriculture as a priority in 2005 and increase government spending Programme for the Development of Agriculture, Regulation of Commodity Markets and Rural Development for the Period of 2008-2012 (2007) Food Security Doctrine (2010)

7. Key components of the 2008-2012 Russia Agricultural Development Program TitleDescriptionTotal planned spending 2008- 2012 (billion roubles/£) Sustainable rural developmentGeneral spending on rural infrastructure and access to social services in rural areas 112.37 ($4) Creation of general conditions for functioning of agriculture Mostly spent trying to support and improve soil fertility, some information provision and the development of agricultural support services 66.55 ($2.4) Priority agriculture subsector development Supporting the growth of brood livestock, veterinary services, subsidies of feed development in the North 72.66 ($2.6) Financial sustainability of agriculture Offering subsidised loans to a variety of sectors, particularly meat 292.69 ($10.5) Agriculture product market regulation Smoothing out price variations, particularly in grain, by buying when price is low and selling when it is high. 7.01 ($0.25)

8. The 2010 food crisis and export ban

9. 2010 July drought

10. Consequences of the drought 43 regions affected 17 per cent of the total crop area destroyed Rise in grain prices Government’s market intervention Imposing an export ban in August, 2010

11. The impact of the ban on wheat prices

12. The impact on poor and vulnerable groups No clear evidence that the ban kept food prices at low level Small share of grain and bread in household expenditures Universal rather than targeted assistance

13. Composition of the subsistence minimum 2000-2009

14. Primary Export Countries for Wheat July 2008 – Feb 2009 (thousand MT) and their relative wealth in per capita GDP RankCountryJul 08 - Feb 09GDP per capita ($PPP) World Bank (2009) 1Egypt3,1565,673 2Turkey1,57613,668 3Azerbaijan9729,638 4Pakistan9432,609 5Syria5524,730 6Iran54211,558 7Bangladesh4591,416 8Jordan4385,597 9Yemen3862,470 10Tunisia3278,273

15. Long-term impact Global price instability Lower investment in grain production High prices of meat and grain if protections in meat industry is continued Damaging Russia’s reputation as a supplier Under-use of a key resource

16. Export bans should be avoided For keeping domestic prices low, it’s better to give direct subsidies to producers, than to impose a ban For vulnerable groups, policies should be targeted Need for investment in grain industry to balance the meat industry will be good in the long-term Import quotas for meat industry should be avoided Recommendations