The Current Status of the Food Security Doctrine Implementation in the Russian Federation and Tasks for 2013-2020

The latest information on the fulfillment of the Food Security Doctrine was presented by Minister of Agriculture Elena Skrynnik at the United Russia meeting on September 23, 2011. She reported that the Doctrines indicators with regard to the determined threshold for imports of grain

potatoes, sugar, vegetable oil, and fish goods would be met already in 2011. (These indicators are as follows: grain not less than 95 percent; sugar not less than 80 percent; vegetable oil - not less than 80
percent; fish products - not less than 80 percent; potatoes - not less than 95 percent). At the same time, the level of self-provision (self-sufficiency) with regard to meat is expected to be 8.2% lower than the threshold (not less than 85%) for this commodity. The criterion set by the Doctrine for the meat and meat products would be reached in 3-5 years. (As far as the poultry meat is concerned, the Doctrines threshold will be reached already in 2011). In spite of various measures envisaged by the priority National project Development of the AIC and by the State Program for Agriculture Development and Food Markets Regulation in the period 20082012, the milk production is not growing in 2006-2010 (about 32 mln. t). As a result, the level of selfprovision (self-sufficiency) with regard to milk products is expected to be 10.6% lower than the threshold (not less than 90%) for this commodity. It is expected by the RF MOA that by 2020 the level of milk selfsufficiency will reach 85.3% (the threshold indicator not less than 90% of all domestic milk and milk products resources). [The source of forecast information is the latest draft [of August 22, 2011] of the State Program for Agriculture Development and Food Markets Regulation in the period 2013-2020].

The State Program for Agriculture Development and Food Markets Regulation in the period 20132020 (draft) includes a sub-program The Science Service to Implement Measures of the State Program [ ]. The major recipient of the sub-programs proceeds will be the Russian Agricultural Academy.

According to the MOAs forecasts, voiced by Minister Skrynnik, by 2020 the Russias meat export (pork and poultry) will reach about one billion dollars, and the RF will become a noticeable participant of the world food market and will provide input to improvements in the global food security. The National Report On the course of events and implementation results in 2010 of the State Program for the Agriculture Development for 2008-2012 (approved in May, 2011) paints the situation in less bright colors. The share of domestic production of meat in the total meat resources was only 61.2% in 2008, 64.7% in 2009, and 67.3% in 2010. The share of domestic production of milk in the total milk resources was 77.8% in 2008 and only 76.4% in 2010 (and the targeted indicators in 2008-2010 were not met). The household disposable resources in rural area (per capita during the month) were less than expected in 2009-2010. In 2010, the ratio of household disposable resources in rural and urban area was 62.2%. (This indicator is improving but the difference is still huge). The index of the physical volume of investments into agricultural fixed capital was considerably less

than targets (in 2009 by 30 percent points, in 2010 by almost 20 percent points). Concerns on the growth of food imports are still relevant: the growth in Russias agricultural production is lagging far behind the growth in food imports, especially imports of meat and milk and dairy products. The value of imported agricultural commodities and raw materials increased from USD 7.4 bn. in 2000 to USD14.8 bn. in 2004, and USD27.6 bn. in 2007. In 2010 food imports amounted to 36.4 billion dollars, the volume of milk, sugar, and vegetable oil imports increased considerably causing higher countrys dependency on imported goods.

Some [possibly subjective] comments for future discussions and developments (optional) Other threats (in addition to imports surpassing the determined thresholds for meat and milk and more general trend of food imports growth) with regard of the Food Security Doctrine are as follows:

political threats (given State Dumas elections in December 2011 and Presidential elections in March of 2012 financial crisis and food price crisis (structural problems, oil dependence); less efficient policy measures to cope with the situation in agriculture (subsidized credits, direct support measures, subsidized inputs and others); shift to protectionist policies in the
primary production (domination of the ideas of the countrys self-sufficiency in food supply);

low level of consumers effective demand; shortage of qualified personnel (even in agricultural education system); low development of systems of monitoring and forecast of agricultural markets.

Also, the Doctrine has introduced some questionable mechanisms of managing food security issues. Among them new mechanisms of regulating domestic food markets: indicative prices (to fight the problem of price disparity and ensure expanded agricultural production); increased state support of domestic agricultural producers and manufacturers; creation of the government reserves and intervention funds; new mechanisms of the foreign trade regulation to reduce imports of agricultural products, raw materials, and foodstuffs: support to the grain producers, decreasing tariffs on grain transportation, reduction of costs for shipping agents services and transshipment in ports, and introducing direct export subsidies, measures to support grain export; decision on revisions of the agreements related to the WTO accession if these agreements infringe the economic interests of the domestic agricultural producers and processors; reduction of meat import quotas; new customs duty rates applicable to in-quota and out-of-quota imports; increase in the amount of import duties. The consequences of these new measures implementation, especially in the area of foreign trade, might be far away from the expected ones. The following aspects of the food security should be primarily focused: global nature issues of the problem and the necessity to cooperate with other countries in its solution (partnership under the leadership of UN and EU organizations); increase in quality and safety of agricultural products, raw materials and foodstuffs; inadequate availability of food in the remote villages; considerable increase of consumer prices; growth of Russias vulnerability to the fluctuations of

world prices has increased;

far from healthy style of eating; [Per capita yearly consumption of some food products are lower than the recommended dietary norms. For example, meat and meat products (on a meat basis) consumption is only 61 kilograms, or 81.3 percent of the norm, milk and dairy products (on milk bases) consumption is 242 kilograms (79.3 percent of the recommended norms), eggs and egg products consumption is 254 pieces (101.6 percent of the norm), vegetables and fruits and berries consumption is 110 kilograms and 54 kilograms (73.3 and 77.1 percent of the recommended norm). Per capita consumption of sugar, vegetable oil, potato and bread and cereal products are 39 kg, 12.8 kg, 132 kg, and 121 kg, or higher than recommended norms (130.0 percent, 106.7 percent, 132.0 percent, 115.2 percent, respectively)].
huge differentiation in consumption patterns between rich and poor population caused both by the income difference and availability of food.

Most of measures to strengthen Russias food security are in line with the general policy measures applied in other countries; among them, some fundamental measures without which some specific food policy measures do not work. These regular but implicit measures are: Structural changes in agriculture, its technological renovation, and noticeable socioeconomic development in rural area. (At this stage a growth of agriculture competitiveness, rational use of natural resources and a reduction of cost per unit should become the fundamental approach in policy making and practical work in agriculture to allow the sector to integrate into the world economy). Changes in the current system of agriculture support which is inefficient. (In this light efficient methods of farming and growth of productivity should be stimulated and many inefficient programs and mechanisms should be eliminated. Among them subsidies for purchases fuel, fertilizers and chemicals provided from the Federal and regional budgets, commodity credit and leasing schemes. In general, the country should move towards more investment support rather than subsidy support. The public investments should first of all be targeted to improve the rural infrastructure both engineering and social. And better partnership with the private sector is needed with this regard). Special support of vulnerable groups of rural population; preference of price stabilization measures vs. price control measures; considerable liberalization of the international food trade; introduction of the system for economic incentives to stimulate the production of ecologically pure agricultural raw materials and food, and organic agriculture in the country. The national bio-technology policy for the development of bio-products and promotion of bio-technology practices in the sector should be better articulated and implemented. Enhancement of the institutional capacity of the MOA. Fundamental reorganization of the system of agricultural research.