Russia has achieved this stature through sound and aggressive policies over the last 15 years. Now it wants to become a world power in grain production and in exports, too, as suggested by President Dmitry Medvedev and Agriculture Minister Yelena Skrynnik, during the World Grain Forum, held in St. Petersburg a week ago.President Medvedev said Russia wanted to strengthen its position in the grain market and spearhead the campaign to fight world hunger. Agriculture Minister Skrynnik went further and proposed what she called a Black Sea grain pool for a speedier conquest of the global grain market.
“Russia is not only oil, gas and metals. It also has the resources to solve the problems of world food security. … We can't be slow. The position our countries [meaning Russia, Ukraine and Kazakhstan] have gained in the last few years has to be supported by serious investment in infrastructure to create the basis for long-term competitiveness of grain from the Black Sea region. … The creation of the pool would allow us to decrease the volatility of the prices in the world market and their dependency on speculative factors. It will also help optimize investment in grain infrastructure, orientated toward grain supplies for the member-countries' domestic markets and abroad. This is especially important in the current global financial crisis,” the minister said.
Although nothing was said as to when the grain pool plan would take effect, it was nevertheless quickly supported by both Ukrainian Agriculture Policy Minister Yuriy Melnik and Kazakh Deputy Agriculture Minister Arman Yevniyev.
In fact, the pool plan has highlighted the recent developments concerning the three countries' aggressive agricultural export policies. Over the past years, Russia, Ukraine and Kazakhstan's agricultural export policies have become increasingly aggressive, which in turn has led to the shrinkage of traditional exporter-countries shares in the world market. In this respect, the US's share in world agricultural trade contracted from 28 percent in 2008 to 20 percent in 2009, Canada's from 17 percent to 14 percent, and Australia's from 16 percent to 13 percent.
By contrast, the share of Russia, Ukraine and Kazakhstan has grown from 6 percent to 24 percent since 2000. Russia has had the largest growth -- from 1 percent to 14 percent, Ukraine's share has increased from 1 percent to 5 percent and Kazakhstan's share from 4 percent 5 percent.
In addition to these competitive policies Russia plans to produce up to 134 million tons of wheat annually and to export 40 to 50 million tons of it. This year's harvest may reach 80 million to 90 million tons, of which more than 20 million tons are set for export. Last year's record-breaking harvest was 108 million tons, making Russia the world's fourth largest grain producer.
Russia, with a tenth of the world's arable land, plans to add 50 percent to its grain harvest by bringing into use some 20 million hectares of unused farmland in the future. The target was unveiled by President Medvedev at the World Grain Forum.
With these ambitious aims and plans, Russia, with the support of its grain partners Ukraine and Kazakhstan, could become a world grain power because it has the production potential with room to expand. If the right policies are pursued and the necessary investments are made, there is no reason why it should not become a grain power.
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