Russia’s agriculture sector faces stagnation due to lack of funding

World Today

Russia’s economic turmoil is casting doubts on the Kremlin’s plans to boost domestic agriculture following the country’s bans on foods earlier this year. With investors leaving Russia, stretched state budgets, and banks that are struggling under sanctions, many worry that the country’s agricultural sector lacks funding to expand. CCTV America’s Tom Barton reported this story from Moscow.

Russia's agriculture sector faces stagnation due to lack of funding

Russia's agriculture sector faces stagnation due to lack of funding

Russia’s economic turmoil is casting doubts on the Kremlin’s plans to boost domestic agriculture following the country’s bans on foods earlier this year. With investors leaving Russia, stretched state budgets, and banks that are struggling under sanctions, many worry that the country’s agricultural sector lacks funding to expand. CCTV America’s Tom Barton reported this story from Moscow.

In August, Russia banned many western food imports in retaliation for western sanctions on Russia’s finance, defense, and energy sectors over Moscow’s actions in Ukraine.

Inflation and food prices rose. Meat, fish and poultry prices saw increases as much as 15 percent in one month. While this has hurt consumers, it has benefited some of Russia’s biggest food companies.

“If we look at shares for Russian agriculture companies that deal with food production, it’s clear that after Russia’s counter-sanctions were introduced, they underwent a substantial growth,” vice president of BCS Financial Artem Argetkin said.

After the ban on western food imports, Russian Prime Minister Dmitry Medvedev announced a drive to massively increase production to make Russia agriculturally self-sufficient.

However, Russia relies on imports for as much as 40 percent of its food supplies. Farmers said the taps can’t simply be turned on and that it would take years investment in infrastructure to even start to make up that gap.

Alexander Kostikov is a leader at one of Russia’s large farming groups. He said money for the planned expansion of the sector is difficult to find, especially with banks under sanctions.