[By Masaru Yamada, The Japan Agricultural News Special Senior Writer]
Russian President Vladimir Putin’s annual presidential address to Russia’s Federal Assembly, delivered at the Kremlin in Moscow on Dec. 1, attracted global attention, as many were concerned over what kind of relationship he is trying to build with U.S. president-elect Donald Trump. For Japan, which is expecting a bilateral summit later this month, the focus was on whether he gives any hints on his intentions regarding a territorial dispute between the two countries.
Although not widely reported, Putin made an interesting remark on the nation’s agriculture sector in his address.
“Agricultural produce exports bring in more revenue today than arms exports. Only recently, we would probably have scarcely imagined such a thing possible,” Putin said, according to a script of the address released by the Presidential Executive Office.
“Our (arms) exports came to $14.5 billion in 2015, and our agricultural produce exports came to $16.2 billion. This year, we expect a figure of $16.9 billion, which is very good. Let’s thank our agriculture sector workers for this result,” he said.
While the Russian economy is in the doldrums amid declining prices of natural resources including natural gas, its farm sector is expanding at a high annual rate of 3 percent. It is one of the few good news that Putin can mention proudly at important occasions.
It is surely surprising to see how remarkably the nation’s agricultural production has grown recently.
Russia’s annual wheat exports now total 30 million tons, exceeding those of the United States and European Union to make the nation the world’s largest wheat exporter. It is not only wheat production which is expanding so rapidly. In late October, Putin hailed agricultural workers at a meeting with their representatives, noting that Russia’s export potential has become the largest in the world. “The agriculture sector demonstrates very good performance at large; we will have 116 million tons of grain this year,” Putin said. The annual grain yield is certain to exceed the amount marked two years before when the nation enjoyed a great harvest.
If you are over the age of 60, you might well remember the global food crisis of 1973. The then Soviet Union all of a sudden imported large amount of grains the previous year. The global grain market prices rose sharply and the confusion spread in Japan as well. The Soviet Union continued to face difficulty securing food supply, leading to the people’s loss of trust in the government and eventually to its dissolution.
How did Russia manage to become an agricultural superpower?
In Russia, with vast cold regions, the recent global warming has worked in favor of the agriculture sector. In the last decade after the prices of natural resources soared, the government has made huge investments in development of farmlands and infrastructure including ports and roads. Putin might have learned deeply from the collapse of the Soviet Union which was brought about by the failure in the agriculture sector.
After emerging as the new agricultural power, Russia’s biggest challenge is to secure stable source of income in overseas markets, since major wheat-importing countries’ markets are dominated by the U.S. and EU.
The Japanese government is now in the midst of negotiations with Russia over the territorial dispute which is a matter of national interest. Japan, which imports 23 million tons of grains including 5.5 million tons of wheat, should definitely look attractive as a market in the eyes of Russia. Food security has been linked deeply with international politics. How about Japan taking a lead in the negotiations by using its importing capability?