The “No Russian Agricultural Act”, recently passed by the US Lower House of Congress, could incur certain pain to Russian farmers, according to Russian businesses.
The bill requires the United States Executive Directors at international financial institutions to advocate for investment in projects that decrease reliance on Russia for agricultural commodities.
The US is set to urge its trade partners to informally ban imports of almost all agricultural products from Russia, Alexander Korbut, vice president of the Russian Grain Union, assumed. He claimed that the act is equivalent to sanctions, expressing an opinion that it is primarily aimed at the countries of Asia and Africa – the key export markets for Russian food.
The new policy could lower Russian agricultural exports, though no implications are expected in the short run, Korbut added.
Denis Ternovsky, a scholar with the Russian Center of Agri-Food Policy, said the bill marks a pivot in the US policy, which refrained from directly targeting Russian exports with sanctions in the previous years. He added that the restrictions could hurt Russian agricultural exports to a greater extent than the logistics issue, which Russian farmers have been struggling with in the past two years. On the other hand, how the new rules will be implemented is yet to be seen, Ternovsky added.
Sergey Mikhnyuk, executive director of the Russian Feed Union, commented that the Russian feed industry sees no direct risks from the new bill since it is primarily aimed at wheat and fertilizer exports.
"We can only state that this is an attempt to influence healthy competition," Mikhnyuk said.
Besides, the US lawmakers primarily aim at the Russian trade of food wheat. In contrast, Russian farmers rely on feed wheat in compound feed production, Mikhnyuk noted, adding that its price has remained flatlined recently in the country owing to a solid harvest.
Mikhnyuk, however, refrained from speaking about steps the Russian feed industry can take to mitigate the impact of potential direct sanctions.
He said: "A complete answer to this question would give a temptation to be researched by those preparing the next package of sanctions, which, according to the authors of the initiatives, could have a more targeted negative impact on the Russian feed market, ignoring the humanitarian aspects of our industry."