The consensus around Russia’s ban of food imports from the US and EU is that Russia is only hurting itself. As a NY Times editorial, aptly named “Russia Sanctions Itself,” stated, “No doubt many producers in these countries will feel the loss of $30 billion in food exports to Russia, but the overall effect on their large and diversified economies will be marginal. Russia, by contrast, imports about 40 percent of its food needs in terms of value, and the Russian agriculture minister has acknowledged that the sanctions would cause a spike in inflation.” If this is the case, then what’s Putin’s strategy behind the food ban?
Writing in Slon, Maksim Samorukov takes a stab at Putin’s possible strategy. In 2013, the EU exported 10.5 billion euros of food to Russia, about 10 percent of its total agricultural exports, making it the second largest market after the US. It’s a growing market, Samorukov states, because Russia imports three times more from Europe than it did ten years ago. Moreover, these exports are important to balance trade in Russian oil and gas. Nevertheless, 10.5 billion euros doesn’t seem like a lot when spread over 28 EU countries. Nevertheless, some countries will be more affected than others as this chart shows.
And this is perhaps what Putin is banking on. Europe’s agricultural lobby will put pressure on their governments and countries like Spain, which has the most to lose with Russia’s food ban, will break the solidarity of the EU. It’s wishful thinking, for sure, but here’s what Samorukov argues:
- The food ban will hit European farmers, and their discontent might force governments to weaken their resolve. Samorukov writes, “Farmers in Europe are very organized people, with extensive experience in lobbying and a tradition of organizing mass demonstrations at the slightest threat to their welfare. You can always find a group of fishermen or peasants at the official European Union buildings in Brussels expressing their indignation at the next food policy. And if it comes to any major changes in agricultural policy, then there is bound to be a crowd of many thousands. . .” Moreover, these farmers will have the sympathy of the population, adding to the political pressue. Putin is essentially counting on European democracy to work in his favor.
- The EU’s pocket book is squeezed on both sides. There’s the “pampered” farmers in western Europe that refuse to accept any reduction of agricultural subsidies on one side, and the poorer famers from eastern Europe on the other. Until now, according to Samorukov, famers in the east were getting fewer subsidies than their counterparts in the west. But now the EU will have to pay those famers equally to alleviate the pain of the Russian food ban. “A unified EU budget, where agrarian subsidies make up almost half of expenses, cannot support such a burden.” Putin, therefore, is hoping that the EU financial woes will play to his advantage as well.
Russian ban on European food seems to have been invented in the hope to take advantage of these difficulties in the EU’s agricultural sector and try to split the unity of the Union. For example, the countries of southern Europe, that have little enthusiasm for sanctions against Russia, joined the them solely to not betray European solidarity. And now the imposition of sanctions would mean they would not only have possible problems with the flow of tourists, but also tangible losses to their already problematic and large agricultural sector.
Samorukov, however, doubts this will work:
The Kremlin certain in its cynicism, as usual, underestimates the principles of Western leaders and their willingness to make sacrifices for the sake of the idea of European solidarity, especially when it comes to such lawlessness as the revision of the borders. But still the impact on agriculture was the best choice from the viewpoint of the proportion of losses and effect.
There’s also the shooting down of MH17 by Russian backed separatists. This changed everything, and explains Europe’s suddenly discovered resolve.
Though Samorukov doesn’t make the argument, I think there’s a possible third idea behind Putin’s thinking: the long term goal of reducing Russian dependence on the West. This project of import substitution coincides with the nationalist fervor that has characterized Putin’s third term. In the short term, Russia will likely increase its exports from places like Brazil. In the long term Putin is banking on the food ban to invigorate Russia domestic agricultural production. Russian consumers will certainly feel the pinch of this policy, but as Samorukov states, the Kremlin can reassert that Russia is a besieged fortress and its people must sacrifice for the sake of sovereignty. But this mobilization can’t last forever. The question is whether Putin’s strategy will pay some geopolitical dividends before the nationalist mobilization peters out.