- POSTED: 22 Aug 2014 21:13
Russia's farm sector needs an additional 636 billion rubles (S$21.9 billion, US$17.6 billion, €13.2 billion) of investment to replace the products it banned in response to Western sanctions, Agriculture Minister Nikolai Fyodorov said on Friday (Aug 22
MOSCOW: Russia's farm sector needs an additional 636 billion rubles (S$21.9 billion, US$17.6 billion, €13.2 billion) of investment to replace the products it banned in response to Western sanctions, Agriculture Minister Nikolai Fyodorov said on Friday (Aug 22).
"We prepared a reasonably optimistic scenario of the sector's development that foresees additional financing of not one trillion, but just 636 billion rubles from 2015 through 2020," the minister was quoted as saying by the state-run RIA Novosti news agency.
Russia earlier this month imposed sweeping bans on food from the United States, the European Union and a handful of other countries in response to Western economic sanctions. The trade war is part of a broader crisis in East-West relations sparked by Russia's perceived attempts to split strife-torn Ukraine in two after Kiev's decision to seek a closer political and economic alliance with Europe.
Officials expressed confidence at the time that Russia would be able to make up for the shortfall with imports from Latin American and other allied countries as well as additional investments in its own agricultural sector. But the cost of doing so is only now becoming clear. The figure cited by Fyodorov is as much as three times a recent estimate from Deputy Prime Minister Arkady Dvorkovich.
Russia relies heavily on foreign fruit and vegetables because its long winters and inhospitable climate keep farmers from growing produce desired by the country's booming middle class.
It imports huge volumes of Australian and European meat along with US poultry and Norwegian salmon - all banned under Russian President Vladimir Putin's orders earlier this month. Russia also depends to a large degree on foreign seeds for the foods it does grow.
While the Russian government has considerable revenue from oil and gas exports, the slowing economy and uncertainty has nearly choked off growth.