From the Russian food import ban to free trade from Lisbon to Vladivostok – will farmers benefit?

Abstract

With the implementation of the Russian import ban as a countermeasure to the EU sanctions in the context of the Ukrainian crisis, trade relations between the EU and Russia reached their lowest level in 2014. In this paper, we model several trade policy scenarios and assess their effects on domestic agricultural production and trade in Russia, the EU and Germany for the 2020-30 period. The results of the applied general equilibrium MAGNET model suggest that the removal of the Russian food import ban will affect Russian agricultural production to a limited extent only, while there will be no effect on the EU. In contrast, depending on how competitive Russian farmers' become, the creation of a large free trade area from Lisbon to Vladivostok would generally benefit farmers in the EU more than farmers in Russia.

Trade Sanctions and Agriculture Support in Milk and Dairy Industry: Case of Russia

“…From this point of view, there is little incentive for the Russian government to lift the import ban. Moreover, as was shown by Banse et al [21], the scenario with no import ban for years 2017-2030 shows that milk production in Russia will decrease by an average of 0.8% annually.…”

“…Banse et al [21] assessed several trade policy scenarios and has suggested that possible removal of the Russian import ban will affect Russian agricultural production only to a limited extent, while there will be no effect on the EU. At the same time, depending on how competitive Russian farmers become, creation of free trade area from Lisbon to Vladivostok would benefit farmers in the EU more than farmers in Russia.…”

How the possibility of a fight-back strategy affects the consequences of a sanctions regime

“…• the importance of a sanction episode (Drezner, 1999) • the cost of sanctions for the sender (Dong & Li, 2018;Whang & Kim, 2015) • the stability and power of the leaders in the target country (Spaniel & Smith, 2015) • the power of the military force in the target country (McCormack & Pascoe, 2015) • the economic and political relations between the two countries (Taehee Whang, 2010) • the behavior of third parties (Han, 2018) • the effects of a countermeasure on individuals in both parties (Banse, Duric, Götz, & Laquai, 2019), or on the outcome of the game (Saparaliyev, Mokin, Movkebayeva, Saiymova, & Mustafina, 2019;Veebel & Markus, 2018a) • the cost of sanctions on the target (Bimbetove et al, 2019;Dong & Li, 2018;Gharibnavaz & Waschik, 2018;Salman, Shin, & Shin, 2019) • the internal dynamics of both countries and the role of the opposition party (Onder, 2020) The intensity of sanctions imposed on controversial policies of target states has been also discussed within public choice framework (Kaempfer & Lowenberg, 1988).…”

“…They have not discussed whether Russian counteractions is agriculture will change or have changed the sanctions' outcome, be it a lift of the sanctions or a retreat from Ukraine by the Russian troops. (Banse et al, 2019) Veebel and Markus have distinguished countermeasures as a choice for the sanctioned country (which is Russia in their study). However, they have considered this option to be one of many (options or) bids that Russia can make in a dollar-auction game model.…”

Development of the regional agro-industrial complex in case of economic sanctions

“…General aspects of the impact of sanctions on the Russian economy are reflected in the works of E. Gurvich et all [3], L. Tyll et all [4], M. Seifullaeva et all [8], I. Korhonen et all [9]. Scenario conditions for the development of agriculture in Russia, the EU and Germany are presented in the work of M. Banse et all [5]. The reverse impact of sanctions on the economy of the European Union was investigated by C. Nasulea et all [6], K. Oja [12].…”