Distortions to Agricultural Incentives in Russia

Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

Russia's Transition to Major Player in World Agricultural Markets

Russia, Agriculture, Trade, Grain, Meat, WTO Accession, International Development, F14, P33, Q17,

Russia's Potential to Increase Grain Production by Expanding Area

Since 2000, Russia has substantially increased grain production and exports. The grain output growth has come from a rise in yields rather than area. After falling heavily during the 1990’s, grain area stabilized during the 2000’s and has remained flat, at about two-thirds the level of the late Soviet period. Using data on the regional structure of Russian grain production costs, this paper examines the country’s potential to increase grain output further by returning the lost grain area to production. The analysis finds that if grain area were to grow beyond a certain level, that is still well below the level of the late Soviet period, production costs would rise steeply. Therefore, any major expansion in grain area would require that world grain prices rise considerably beyond their level in the early 2010’s, to cover the high marginal costs of production

Productivity Growth and the Revival of Russian Agriculture

Russia’s transition from a planned to a market economy during the 1990s resulted in a severe decline in agricultural gross output and the inputs used in production. By the late 1990s, the agricultural output decline had bottomed out and growth resumed. For some products, such as grain, the production rebound created surpluses for export, while for other products for which Russia was a net importer, such as meat, the output growth reduced imports. Although the output turnaround began in the late 1990s, input use fell until the mid-2000s as the sector continued to correct overexpansion during the Soviet period. Measures of Russian national and district-level total factor productivity (TFP) growth in agriculture from 1994 to 2013 reveal that recovery varied regionally across the country, though greater output specialization has been a general feature among districts. The most robust productivity growth occurred in the South, which has emerged as Russia’s most important agricultural district. The Central district also exhibited strong TFP growth in the later years of the study period, which supports a cautiously optimistic view of Russia’s future agricultural growth

Agricultural Recovery in Russia and the Rise of Its South

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