When the EU and US imposed sanctions on parts of Russia’s economy following military intervention in Ukraine 2014, some local officials portrayed the blockade as an opportunity. Together with a falling rouble, they said, it would boost development of domestic business by encouraging import substitution and making exports more competitive.
Many western analysts and investors were cynical. But in at least one area of the economy — agriculture and associated sectors — the optimism has been vindicated. Russia last year became the world’s biggest exporter of grains, at more than 34m tonnes. Total Russian grain production hit a record 119m tonnes. The turnround is striking since as recently as 15 years ago — and for a couple of decades before during the Soviet era — Russia was a net importer.
The success goes beyond grain. Russia has fully substituted imports with domestic production of pork and chicken.
It has become a top producer of sugar beet; greenhouse vegetable production last year was up 30 per cent on the year before.
While agriculture remains far below oil and gas, the sector has overtaken arms sales to become Russia’s second-biggest exporter.
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