The Forbes magazine columnist Kenneth Rapoza writes that Russia has a long way to go on replacement of imports with own production, but already now we can say that the food business was able to extend “sanctions storm”.
“If Russia can’t produce its brie cheese or grow certain types of fruit, but it can catch more cod and to grow more chickens on local farms. These guys (the farmers) and the government supporting them with subsidies, in some degree, satisfied with life without Europe,” notes the analyst. He writes that the substitution helps the government “keep in country” and farmers to reduce currency risks.
At the same time, the replacement of imported products by domestic products is a long process, consumers inevitably face higher prices. “International experience shows that this policy is implemented for much longer periods of time. In Russia, the majority of plans on import substitution were adopted in the first quarter of last year”, — writes Forbes columnist the opinions of the economist of investment Bank “VTB the Capital” Alexander Isakov.
Russia has been partly weaken the effect of the imposed by Moscow in response to sanctions of the EU embargo on imports of European products — among other things last year on a 9% increase in the production of domestic chicken and imported cheeses in the Russian market fell from 40.6% in 2014 to 22% in 2015. The main problem for the food sector was inflation, but now it is on the decline due to the strengthening of the ruble, the article notes.
