Problems of the Russian Federation Food Security Ensuring in the

Context of the Crisis, the COVID-19 Pandemic and the Instability of

World Markets

Alexander Evgenievich Suglobov

and Alexey Vladimirovich Rodionov

Russian University of Cooperation, 12/30 Vera Voloshina str., Mytishchi, Moscow Region, Russian Federation

Academy of the Federal Penitentiary Service of Russia, 1 Sennaya str., Ryazan, Russian Federation

Keywords: Food security, international trade, crisis, state regulation of the economy, infrastructure development.

Abstract: The article outlines the problems of Russian Federation food security ensuring in the context of the crisis

caused by COVID-19 pandemic and world markets instability. The key challenges of our time in the field of

food security ensuring at the national and global levels are identified. The dynamics of international food

markets’ main indicators is analyzed. The possibilities of expanding the acreage in Russia are determined.

The ways of balancing export supplies and the needs of the Russian food market are justified. The features of

state price regulation as a factor of production volumes reducing are revealed. Promising directions for

improving the level of food security are presented. The information base of the study is presented by data of

Food and Agriculture Organization of the United Nations, the Ministry of Agriculture and the Federal State

Statistics Service of the Russian Federation.

1 INTRODUCTION

A significant increase in food prices in the Russian

Federation in late 2020 – early 2021 had a serious

impact on the processes of social stability ensuring

and required the adoption of appropriate measures by

the national political leadership. Elements of state

price regulation were introduced, as well as

restrictions on the export of certain food products.

Despite significant progress in the development of

Russian agriculture and the results achieved in food

import substitution, the high level of risks of threats’

materialization in the field of national food security

remains obvious.

The openness of the Russian economy and the

high degree of its integration into the global division

of labor objectively increases the dependence of the

domestic market on the dynamics of the main

indicators of foreign trading platforms. It should be

noted that food supply planning parameters of the

Russian Federation should be carried out taking into

account the medium and long-term trends in the

global production and distribution of food.

https://orcid.org/0000-0003-1860-6783

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The authors of this paper turned their attention to

the call of the President of the People's Republic of

China Xi Jinping to start saving food, which he

announced on 11.08.2020 during one of his public

speeches. The Chinese leader urged his compatriots

to refrain from wasteful eating and show restraint. At

the same time, the population was advised not to take

into account the success of Chinese farmers and the

positive dynamics in agricultural production. Special

attention should be paid to the fact that the head of the

People's Republic of China has set the task to develop

an appropriate legislative framework and supervisory

mechanisms to ensure that food savings and the

rejection of excesses are observed acquire a long-term

character.

It is obvious that the long-term nature of this

program is determined by the corresponding forecast

horizon and the level of threats to China's food

security. On 30.11.2021, the first law against food

waste has already been passed in the People's

Republic of China. This regulatory act provides for

fines to visitors of public catering establishments if

they leave a significant part of the purchased food

Suglobov, A. and Rodionov, A.

Problems of the Russian Federation Food Security Ensuring in the Context of the Crisis, the COVID-19 Pandemic and the Instability of World Markets.

DOI: 10.5220/0010679700003169

In Proceedings of the International Scientiﬁc-Practical Conference "Ensuring the Stability and Security of Socio-Economic Systems: Overcoming the Threats of the Crisis Space" (SES 2021),

pages 5-9

ISBN: 978-989-758-546-3

products not fully consumed. In addition, the law

provides for a number of non-fiscal measures to fight

for the rational use of food, including propaganda,

explanatory work, etc.

Starting from September 2020, almost

immediately after the above-mentioned statement of

Xi Jinping, world prices for a number of food

products showed a significant increase. In our

opinion, the Chinese analytical groups made the

correct forecast about the upcoming food shortage,

and the Chinese leadership voiced the call, taking into

account the fact that food savings in the near future

will become a long-term phenomenon.

In the context of global food shortages and rising

prices on international markets, Russian producers

have made an obvious choice in favor of export

supplies, and traders have increased domestic prices

in order to ensure the corresponding attractiveness of

trade in the domestic market. Thus, the growth of

domestic production and all the successes in the

development of the Russian agricultural sector are

significantly offset by the observed externalities in

the world markets. It is obvious that state regulation

of prices and export restrictions may have some

positive impact on the dynamics of domestic prices,

but this effect will be short-term. At the same time, in

the future, the accumulated losses will be recouped by

the market due to a longer, but progressive increase

in prices, when the effect of deferred consumption

will work.

In the context of the deepening economic crisis

associated with the COVID-19 pandemic, the

problem of food security ensuring is of particular

relevance. The decline in household incomes, the

increase in the debt burden of households,

corporations, regions and states multiply all the

negative phenomena in the international food

markets. The complex of issues related to the stable

growth of the production of high-quality and

affordable food products for the Russian population

entire demand requires the development of

appropriate mechanisms aimed at improving the level

of national food security. The development of such

mechanisms requires the identification of all

significant trends that determine the content of the

measures to be taken. The systematic implementation

of these measures will increase the level of Russia’s

population food supply stability and protect the

interests of domestic agricultural producers selling

their products on world markets.

2 MATERIALS AND METHODS

The information base of the study is presented by the

data of the Food and Agriculture Organization of the

United Nations (FAO), the Ministry of Agriculture

and the Federal State Statistics Service of the Russian

Federation. The methodological basis of this study is

formed by the works of specialists in the field of food

security and the development of agro-industrial

production. The research material is based on the

ideas about the significant impact of climate change

on the processes of food security ensuring (Michalk

et al., 2019), as well as the importance of the

Figure 1: Dynamics of corn prices in the world's main producing regions (March 2019 – March 2021).

Figure 2: Dynamics of wheat prices in the world's main producing regions (March 2019 – March 2021

SES 2021 - INTERNATIONAL SCIENTIFIC-PRACTICAL CONFERENCE "ENSURING THE STABILITY AND SECURITY OF

SOCIO - ECONOMIC SYSTEMS: OVERCOMING THE THREATS OF THE CRISIS SPACE"

transition to sustainable development of the world

economy (Bindi et al., 2015). The paper also uses an

approach to the analysis of the mutual influence of the

world food market and the markets of individual large

food producing countries (Vasylieva, 2020), as well

as ideas about the global distribution of food (Kick et

al., 2017) and the specialization of individual

producing countries (Campi et al, 2021), as methods

of food security ensuring. The study also examined

and systematized the experience of food security

ensuring in Argentina (Feeney & MacClay, 2016) and

Egypt (Abdelaal & Thilmany, 2019), as well as

analyzed foreign views on the import substitution

policy of the Russian Federation (Wegren, 2014).

Special attention was paid to current research on the

impact of the COVID-19 pandemic on food security

processes (Eileen & Cosmas, 2021).

3 RESULTS AND DISCUSSION

3.1 International Food Markets

According to the FAO, starting from September 2020

to February 2021, corn prices increased by 40-55 %

(fig. 1) in various producing regions (USA,

Argentina, Black Sea region, Ukraine).

A similar situation was observed in the grain

market. The price of wheat produced in the United

States, the European Union, the Russian Federation

and Ukraine over the same period increased by 45-

50% (fig. 2). Despite a slight decline in prices in

March 2021, futures quotations on major commodity

exchanges indicate a high potential for further growth

in prices for basic agricultural commodities, which,

accordingly, will affect the growth of livestock

products prices worldwide.

Worth to be noted that a similar situation is

observed in the market of sugar, oilseeds and other

basic food products. It is noteworthy that the majority

of experts in their forecasts published in mid-2020

assumed that the level of prices for agricultural

products would remain stable and even slightly lower

in the context of a deepening crisis, a decline in the

global economy and other disincentive factors.

3.2 International Food Markets

It is obvious that in the context of the formation of

long-term trends for the growth of food prices, as well

as the increase in food shortages in the world's largest

markets (primarily in South-East Asia), the urgent

task is to increase the volume of agricultural

production. The Russian Federation is one of the few

countries with significant reserves for the growth of

used acreage. In most grain-producing countries, the

ploughing of agricultural land has reached peak

values or is limited by objective anthropogenic and

natural-climatic factors (fig. 3). The Russian

Federation has significant reserves of agricultural

land that can be further involved in agricultural

turnover to increase the production of cereals,

oilseeds and industrial crops, as well as vegetables. It

should also be noted that in most Russian agricultural

regions there is no shortage of water resources typical

for most countries of the world, which creates

additional conditions for increasing the growth of

agricultural production.

Figure 3: Ploughing of agricultural land in the countries of

the world in 2014.

Data on the area of the main agricultural crops in

the Russian Federation in 2020 (fig. 4-5) show that

cereals, in particular wheat, occupy the largest part of

the land bank used. In the conditions of further

growth of prices for cereals and oilseeds, it is almost

impossible to increase the area of land used for their

cultivation by reducing the area under other crops.

Thus, the introduction of new lands into circulation

(in reality, the return to agricultural circulation of

previously withdrawn ones) remains the most

promising direction for ensuring the rapid growth of

agricultural production.

Figure 4: Acreage of major agricultural crops in the Russian

Federation in 2020.

20%

40%

60%

80%

100%

0,2

0,92

2,6

0,48

8,3

28,9

0 10203040

Rice

Sugar beet

Corn

Flax

Sunflower

Barley

Wheat

Problems of the Russian Federation Food Security Ensuring in the Context of the Crisis, the COVID-19 Pandemic and the Instability of

World Markets

The scarcity of agricultural land in Europe is

confirmed by the fact that the Republic of Belarus

plans to start measures to return to agricultural

circulation arable land that suffered from radioactive

contamination after the tragedy at the Chernobyl

nuclear power plant in 1986. It is planned to start

work on the restoration and processing of 265

thousand hectares of fertile agricultural land.

3.3 Export vs Import: Ways to Balance

the Russian Food Market

In 2020, Russian food exports exceeded the volume

of agricultural imports for the first time. Domestic

producers sold products worth 30.7 US dollars billion

on the world markets. Special attention should be paid

to the results in the export of meat products, as

commodities with a high degree of added value.

Meat exports increased by 53%, reaching 887

million US dollars. Pork producers doubled their

supplies to foreign partners (200 thousand tons worth

336 million US dollars).

The increase in domestic prices for cereals and

industrial crops, respectively, will lead to an increase

in the cost of feed, which will accordingly affect the

competitiveness of Russian meat products.

Restrictions on the export of grain and additional

duties will have a disincentive effect on business

activity in the grain market. In this case, we should

look for ways to balance the interests of grain

exporters and meat producers.

The relevance of this task is determined by the

fact that grain exports in the amount of 49 million tons

generated foreign exchange earnings of more than 10

billion US dollars, which had a positive impact on

macroeconomic stability in the face of falling prices

for the main export products of the Russian

Federation – hydrocarbons.

A similar situation is observed in the market of fat

and oil products. Revenue from the export of these

products amounted to more than 5 billion US dollars,

while the increase in prices on the domestic market

significantly affected the prices of most finished food

products. This situation had a negative impact on

social stability and the actual decline in the our

country citizens’ standard of living.

3.4 Export vs Import: Ways to Balance

the Russian Food Market

Government regulation of food prices and restrictions

on the export of products in the context of a positive

market situation on foreign trading platforms can

have a short-term effect, allowing to restrain the

growth of retail prices. However, further use of these

measures is futile and can only lead to the

abandonment of the previous volumes of agricultural

products production.

In this case, it is necessary to give as an example

the volume of the gross harvest of sugar beet in the

Russian Federation in 2014-2020 (fig. 6). In the

context of a crop failure in 2020, as well as a decrease

in interest in this crop due to state price regulation,

the sugar market may show their unacceptably high

growth with a parallel decrease in the volume of sugar

beet production.

Figure 5: Gross sugar beet harvest in the Russian Federation

in 2014-2020, thousand tons.

3.5 Promising Directions for

Improving the Level of Food

Security

In conditions of low efficiency of state price

regulation, the most promising direction of

development is a return to end-to-end planning of the

agricultural sector with the involvement of large

producers in the implementation of these plans. Small

and medium-sized agribusinesses should be provided

with information about the planned volumes of

acreage under individual crops and the forecast values

of the gross harvest of large producers.

An important task of the state is to ensure broad

access to the infrastructure for the transportation and

long-term storage of agricultural products. It should

be noted that the role of the state in this case is to

create conditions for ensuring transparency and

stability of prices for these types of infrastructure and

technical support.

Among the promising projects, it should be noted

the further spread of agricultural machinery based on

gas-engine fuel, which is a cheaper and more

environmentally friendly analogue of diesel fuel, the

prices of which are also under state regulation (in

order to prevent price shocks in the markets)

33475

38988

51325

51913

42066

54350

32395

10000

20000

30000

40000

50000

60000

2014 2015 2016 2017 2018 2019 2020

SES 2021 - INTERNATIONAL SCIENTIFIC-PRACTICAL CONFERENCE "ENSURING THE STABILITY AND SECURITY OF

SOCIO - ECONOMIC SYSTEMS: OVERCOMING THE THREATS OF THE CRISIS SPACE"

Expanding access to grain storage infrastructure,

as well as transportation and refueling with natural

gas engines will significantly increase the

competitiveness of producers, reduce their costs and

risks.

Separately, it should also be noted the relevance

of the interstate cooperation complex of issues.

Combining the production capabilities of the

Eurasian Economic Union countries with the

prospective involvement of Ukraine (as one of the

world's largest agricultural exporters) and Iran (as one

of the largest importers and prospective transiters of

agricultural products) will in the future create the

largest foreign trade association capable of regulating

world prices for critical imports of most countries.

4 CONCLUSIONS

Thus, ensuring the food security of the Russian

Federation in modern conditions requires the

systematic implementation of a number of programs

and projects aimed at increasing the volume of

agricultural production in order to saturate the

domestic market and simultaneously expand the

presence and market share on foreign trading

platforms. The return to state planning and the

rejection of state price regulation, while developing

programs to expand access to infrastructure and fuel

resources, in our opinion, will help to stabilize the

domestic market, increase the competitiveness of

domestic producers and increase the export supply of

Russian food products.

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Campi, M., Duenas, M., Fagiolo, G., 2021. Specialization

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Problems of the Russian Federation Food Security Ensuring in the Context of the Crisis, the COVID-19 Pandemic and the Instability of

World Markets