A customer who is ready to buy Russian grain has been finally found. Because of a two-year failure of crops, Canada decided to buy grain in Russia, Russia’s Deputy Minister of Agriculture Anatoly Mikhalev said at the public hearing in the Russian Chamber of Industry and Commerce today. And Europe prefers to buy wheat in Ukraine.
Owing to an unbelievably big harvest of grain in Russia, main attention will be concentrated on export to North Africa, to Egypt to be more exact. EU countries don’t like to buy grain in Russia, for quite obvious reasons by the way. Quality of Russian grain leaves much to be desired. Europe hit by the flood prefers to purchase wheat in Ukraine, where the grain is of a much better quality. Ukrainian vice-premier Leonid Kozachenko said that grain deliveries to Europe will be increased from 3 million to 5 million tons this year. So, two former republics of the Soviet Union, Russia and Ukraine are now strong rivals on the grain market. However, Canada decided to buy Russian grain to the sum of $8 million.
Canada suffers from corn failure for the second year already because of bad weather. No wonder, Canada is situated in the same climate zone as Russia, it is a so-called zone of risky farming. Majority of Canadian fields are situated along the US northern border where hard wheat sorts are grown. Favorable climate conditions, complete labor mechanization make for good harvests. When weather conditions are poor, Canadian traders focus on the situation on the world corn exchanges.
In Mikhalev’s words, preliminary talks have been already held with Canada, development of necessary documents is currently underway. Russia’s Ministry of Agriculture expects a gross grain harvest at the rate of 85 million tons, that is quite feasible. As of now, over 63,8 million tons have been already thrashed. As traditional, the biggest grain harvest is in the Krasnodar, Stavropol and Rostov regions.
Last year’s harvest made up 85,2 million tons, 5 million tons were sold abroad, great part of it was sent to Western Europe. Probably this is the reason why Europeans do not wish to import such great amounts of grain this year. However, the Ministry of Agriculture hopes to export up to 10 million tons. If the objective is fulfilled, Russia will reach the results of 1913, Anatoly Mikhalev says. Before the WWI, grain harvest reached 80 million tons per year, 10,5 million tons were exported. It is astonishing that Russian economists are dreaming now of the 1913 standards.
Why is it believed that Russia of that period experienced really good times? In fact, the Russian Empire was an undeveloped country, where only agriculture, light industry, timber production and gold mining were on a proper level. Moreover, these results were achieved not due to labor mechanization but due to ruthless exploitation of workers. The Donbass coal, Ural ore and Baku oil were produced mainly by foreign businessmen. It is enough to mention Alfred Nobel who earned much money with Azerbaijan oil, and even 100 years later the money is enough to pay dozens of Nobel Prizes annually. The USSR failed to reach the results of 1913, however, its economic resources were enough to rapidly carry out industrialization and to win the WWII. And Russia of the tsar era, of that ear that is often said as the gold time, lost the WWI, failed to cope with the revolution in 1917 and ceased its existence as a state.
Russian economists should study history and economics once again to finally understand that economic strength of the country isn’t determined by its grain export. Unfortunately, someone in Russia is still dreaming of 1913.
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