food / travel

The True Cost Of Russia's Food Patriotism

The Kremlin is spinning domestic protectionism and anti-West food sanctions as a way to help Russia's farmer. But it's really just a recipe of pure politics - and bad economics.

Homegrown?
Homegrown?
Olga Filina

MOSCOW — People usually associate Russian conservatism with its citizens' political tastes, but marketing professionals have long ago seen another connection — literally, in consumer tastes.

There's the ice cream wrapped in paper — "tastes just like you remember!" And there's sausage with a label saying it was "made according to the standards of the Soviet Union."

Soviet culinary artifacts have been flying off the shelves for years. Valeri Fedorov, director of the All-Russian Public Opinion Research Center, says it's no surprise that Russians support sanctions on Western food products as evidenced by the abundance of Soviet symbols in stores.

According to a survey by the Levada Center, a Moscow-based think tank, 72% of Russians support the sanctions on foreign food products. We want food like we had as children, as if we'd forgotten the lines and shortages.

"Our great country doesn't have the same mission as Europe," Motherland party leader Aleksei Zhuravlev said in February. "We don't exist in order to ensure everyone is OK and has sausage and yogurt. No, we have a greater mission."

Now that "greater mission" has set its sights on trade in food products, and it could still restrict trade in automobiles or consumer goods. For Russian consumers, the future is completely unpredictable.

Getting rich at home

"There's this move in chess, a strategy, where you allow several figures to be captured in the pursuit of a goal," says Valerii Mironov, vice director of the Center of Development at the Higher School of Economics. "I really hope that our government is employing that strategy right now, not just committing blunders. The first victim was the banking system, which is suffering as a result of the sanctions from the West. The second victim is the grocery industry, which is suffering as a result of our own sanctions. The only winners, it seems, should be domestic farmers."

Of course, all economists agree that protectionism is a bad, even dangerous, long-term strategy, but for "undeveloped" sectors of the economy, short-term protectionist policy can be beneficial. Our agricultural industry is still considered "underdeveloped," even though the value of Russian agricultural exports is greater than the value of weapons exports.

But Russia will have to use non-financial instruments to help farmers, because the Russian Agricultural Bank lost "long-term money" in the third wave of sanctions from the West and won't be able to finance projects that would increase the competitiveness of Russian farmers.

The problem is, it's not clear how exactly to use the non-financial instruments that remain. It's the end of the agricultural season, and it's useless to try to change the 2014 harvests now. The agricultural sanctions are scheduled to expire next August. If farmers plant more now to replace the Western products, what will happen once the sanctions expire in a year? From a farmer’s perspective, increasing production just because of these sanctions is extremely risky.


Summer produce — Photo: g_firkser

Increasing agricultural production will require more support from the government than is currently planned, explains Natalya Shagaida, director of the Center for Agricultural Policy at the Russian Presidential Academy of National Economy and Public Administration.

Last year, for example, milk production only increased among small farmers — and only by 5%. "Government policy focused on increasing production among large producers through subsidies will certainly lead to increased production in the short-term, but at what cost to consumers?," Shagaida asks. "Chicken and eggs cost about the same in Russia as in Europe, and while grains are less expensive, pork is even more expensive than in Europe. Large producers say they can't sell meat for less."

Difficult to control

It's also difficult to figure out how much food comes from Russian "enemies." The Development Center Institute at the Higher School of Economics has already blamed the Ministry of Agriculture for manipulating data about food imports. It seems someone substantially lowered the numbers on the eve of the sanctions announcement.

"For beef, our numbers show that 41.6% is imported and 3.7% is imported from sanctioned countries, compared to 28% and 2.5%, which are the numbers the Ministry of Agriculture is showing," one expert says. "In terms of milk production, we have 23% and 9% versus the Ministry of Agriculture's 3.8% and 1.3%. In half of the cases, the numbers are very different."

Shagaida says that it's not even clear who owns much of the agricultural land in Russia. "International companies control a lot of land, and there's no register," she says. "In our research, we found that five out of the 10 largest Russian agricultural organizations are owned by international companies that are incorporated offshore. If the political interests of these owners don't align with their economic interests, no one knows how they will react. An unexpected liquidation of a large producer could blow a hole in Russia's grocery market."

Even if Russia does manage to control international agricultural investors, some of whom might be from "sanctioned" countries, it's unclear what will happen to Russia's Customs Union partners. For the past several years, there have been no customs inspections on the border between Belarus and Kazakhstan, Russia's partners in the Customs Union. Both partners have refused to support the sanctions, and have also noted that it is totally legal for them to re-export products from sanctioned countries to Russia.

"In theory, that sort of re-export is only possible if the product has been substantially transformed," explains Aleksandr Knobel, an international trade expert. "For example, if Belarus buys frozen ground meat from Europe and makes it into sausages and then sells us the sausages, the sausage is Belorussian."

Nevertheless, Andrei Cizov, director of the SocEcon Center, notes, that there are ways around the law. "In reality, an American good could be just washed up and given a new label, and it's considered Belorussian, or Kazakh."

Belarus has already provided Russia with millions of dollars worth of lemons, mussels and octopus this year, and we can be sure none of those agricultural products originated from the chilly landlocked country.

A first look

All we can be sure about is that food is becoming more expensive. In fact, Russia's patriotic relationship with food costs consumers between 1 and 2 extra percentage points of inflation.

"Right now, instead of developing a constructive plan, there is a propaganda campaign that is actively promoting the myth that the food that falls under the sanction are all expensive, elite products," explains Natalya Shagaida. "But anyone can verify that's not true just by looking at the origin of products for sale in a discount section of the grocery store."

Last week large supermarket chains were already beginning to complain to the Ministry of Trade and Industry that some suppliers were asking up to 30% more for fish, vegetables and meat. The government promised a solution, vowing to strictly monitor the situation.

Don't expect the people to simply take officials at their word, they will be watching the prices themselves.

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Art installation "Greetings From Giza" by French artist and photographer JR faces the pyramids of Giza in Egypt

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 你好*

Welcome to Tuesday, where violence erupts after Sudan's military coup, Australia finally gets onboard with climate change goals, and Harrison Ford stars in Raiders of the Lost Credit Card. From Bogota, we also see what the capture of drug kingpin Otoniel means for Colombia, a country long stained by cocaine trafficking.

[*Nĭhǎo - Mandarin Chinese]

💡  SPOTLIGHT

Saving the planet is really a question of dopamine

The elite of the ecologically minded are set to descend on Glasgow next week for the Cop 26 conference on climate change. But beyond debating policy prescriptions, French daily Les Echos explores the role our own brains have on making the right choices for the planet:

Almost every week, a new scientific study alerts us to the degradation of the environment. And yet, we continue not to change anything fundamental in our systems of production and habits of consumption. Are we all suffering from blindness, or poisoned by denial?

In his popular books Le Bug humain (The Human Bug) and Où est le sens? (Where is the Sense?), Sébastien Bohler, a journalist in neuroscience and psychology, provides a much more rational explanation: The mechanism responsible for our propensity to destroy our natural environment is in fact a small, very deep and very primitive structure of our brain called the striatum.

This regulator of human motivation seems to have been programmed to favor behaviors that ensure the survival of the species.

Since the dawn of humanity, gathering information about our environment, feeding ourselves, ensuring the transmission of our genes through sexual intercourse and asserting our social status have all been rewarded with a shot of dopamine, the "pleasure hormone."

Nothing has changed since then; except that, in our society of excess, there is no limit to the satisfaction of these needs. This leads to the overconsumption of food and addictions to everything from sex to social media — which together account for much of the world's destructive agricultural and energy practices.

No matter how much we realize that this is leading to our downfall, we can't help but relapse because we are prisoners of the dopamine pump in the striatum, which cannot be switched off.

According to Bohler, the only way out is to encourage the emergence of new values of sobriety, altruism and slowness. If adopted, these more sustainable notions could be recognized by the striatum as new sources of dopamine reward. But there's the challenge of promoting inspiring stories that infuse them with value.

Take the photo-collage exhibition "J'agis ici... et je m'y colle" ("I'm taking action here... and I'm sticking to it"), a collection of life-size portraits of residents committed to the energy transition, displayed on the walls of the French coastal city of La Rochelle.

Backed by the French National Center for Street Arts, photographer Martin Charpentier may be employing artistic techniques, but he's also tinkering with neuroscience in the process.

Stefano Lupieri / Les Echos

🌎  7 THINGS TO KNOW RIGHT NOW

• Sudan in chaos following military coup: After Sudan's military seized power from the transitional government, defiant anti-coup protesters have returned to the streets of the capital city Khartoum, for a second consecutive day. At least seven people have been killed and 140 injured. Coup leader General Al-Burhan has announced a state of emergency across the country, while the military cut off access to the internet and closed roads, bridges, and Khartoum's airport. Washington condemned the coup and suspended aid, and the U.N. Security Council was expected to discuss Sudan behind closed doors later today.

• Egypt lifts state of emergency in force since 2017: Egyptian President Abdel Fattah el-Sisi, announced the end of a four-year-old state of emergency, undoing powers that had given the government sweeping authority to quash protests, make arrests, search people's homes without warrants, and control everyday life in the most populous Arab country.

• Platforms take down Bolsonaro video linking vaccine and AIDS: Facebook, Instagram and YouTube have removed an anti-vaccine video from their respective platforms posted by Brazilian President Jair Bolsonaro. Beyond blocking the video, in which Bolsonaro falsely linked the COVID-19 vaccine with developing AIDS, YouTube went further and suspended the far-right leader for a week.

• COVID update: The U.S. will launch a new travel system on November 8, imposing new vaccine requirements for most foreign national travellers and lifting severe travel restrictions over China, India and much of Europe. Meanwhile, authorities in northern China are reimposing lockdown, and other emergency measures as COVID-19 infections spread to 11 provinces.

• Australia pledges net zero emissions by 2050: As one of the world's largest emitters of greenhouse gases per capita and a major exporter of fossil fuels such as coal, Australia has finally committed to becoming carbon-neutral by 2050. This is a target already adopted by most nations heading to next week's COP26 international climate conference, but that Australia had so far refused to pledge.

• Japanese princess loses royal status over wedding: Japan's Princess Mako married her boyfriend Kei Komuro, giving up her royal status. Under Japanese law, female imperial family members lose their status upon marriage to a "commoner" although male members do not.

Raiders of the Lost Credit Card: A tourist returned the credit card of American actor Harrison Ford, who had lost it in Sicily while shooting scenes for the latest Indiana Jones movie.

🗞️  FRONT PAGE

"Out of control," titles German daily Süddeutsche Zeitung, reporting on the release of a series of articles by a consortium of 17 U.S. news outlets, called the "Facebook Papers," that reinforce whistleblower Frances Haugen's claims that the social media giant is prioritizing profits over the well being of its users and society.

#️⃣  BY THE NUMBERS

$1.01 trillion

After striking a deal to sell 100,000 electric vehicles to car rental firm Hertz, Elon Musk's Tesla has joined Apple, Microsoft, Amazon and Google's Alphabet in the club of companies that have reached a $1 trillion valuation.

📰  STORY OF THE DAY

What the capture of a drug kingpin means for Colombia

While the capture of Otoniel, Colombia's most wanted drug trafficker, made global headlines, Bogotá daily El Espectador writes about the significance of the news for a country that has battled narcotrafficking for decades.

👮 The arrest of the Colombian mobster Dairo Antonio Úsuga David, a.k.a. "Otoniel," is a victory for Colombian intelligence, law-and-order forces and the broader fight against crime. Details of the eight-year-long pursuit of the head of the Gulf Clan, of the tireless and meticulous work, testify to the capabilities that the police and army have managed to develop in the fight against the narco-trafficking that has long been a stain on Colombia.

🇨🇴🇲🇽 Otoniel is responsible for a criminal organization with more than 3,800 members and influence on 12 departments and 128 districts in Colombia (though data from the Bogotá-based Peace and Reconciliation Foundation counts 211 districts). The Gulf Clan sends half the drugs going out of Colombia, and is the main exporter to Mexico. Its ties to the Mexican cartel chief Joaquín "el Chapo" Guzmán are well-documented — and Otoniel had aspired to fill the power vacuum left by Guzmán's capture.

⚖️ Some have observed that the ensuing power vacuum will engender more violence, which is true. But we are, in any case, far from eliminating drug trafficking in Colombia or cutting its tentacles across public life. That shows the limitations of the hard-line response to drugs, when we have seen it is not enough. Still, it is essential in any fight against crime for the state to show its operational capabilities. The message is clear: not even drug overlords are above the law in Colombia.

➡️ Read more on Worldcrunch.com

📣 VERBATIM

"I love Mako. I would like to spend my one life with the person I love."

— Kei Komuro said during a news conference after his wedding with Japan's Princess Mako, the niece of the current emperor and the sister of the likely future sovereign. The princess lost her royal status as a result of her marriage with Komuro, a "commoner."

📸  PHOTO DU JOUR

An art installation "Greetings From Giza" by French artist and photographer JR faces the pyramids of Giza in Egypt, as part of the 2021 exhibition "'Forever Is Now," the first international art exhibition to take place there — Photo: Balkis Press/Abaca/ZUMA

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Send all commoner and royal well wishes to Mako and Kei — and let us know what the news looks like from your corner of the world! info@worldcrunch.com

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