Russia bans U.S., European food and agricultural imports

The Kremlin has struck back at the United States and the European Union, banning imports of food and agricultural products from countries that imposed sanctions against Russia for its behavior in Ukraine.

Russian President Vladimir Putin signed a decree on Wednesday prohibiting or limiting “certain types of agricultural products originating in countries that have decided to impose economic sanctions against Russian legal entities and/or individuals or those associated with these measures.”

In theory, the order allows Russia to immediately ban all food imports from the U.S., the European Union, Australia, Canada and Japan, inflicting widespread pain on foreign farmers. However, it is not yet clear how the restrictions will be applied.

Putin’s decree instructed his government to devise an action plan and draft a list of products that would be subject to the ban. Officials should take measures to balance the food market and prevent an “acceleration in price increases for agricultural and food products,” according to the text of the decree.

Russia is dependent on foreign suppliers for about two-fifths of its food supplies, and retailers say it will take time to replace imports with domestic products.

Even before Putin signed the decree, Russia’s Central Bank had warned that any substantive restrictions on food imports could fuel inflation, which, at 7.9% for the first half of 2014, has already overshot government targets.

Earlier this week, Putin warned that the Kremlin would take retaliatory action against Western countries that stepped up sanctions against Russia in the wake of the deadly crash of Malaysian Airlines Flight 17 in Ukraine last month.

Western leaders have accused Russian separatists in southeastern Ukraine of shooting down the aircraft and have demanded that the Kremlin withdraw support for the rebels.

As the tougher sanctions began to bite, Russian regulators imposed a slew of restrictions on European food imports, citing health concerns that Kremlin critics say mask political motives. In the last two weeks, Polish fruit and vegetables, Romanian beef, Latvian pork and Ukrainian fruit, juice and dairy products have begun disappearing from Russian shop shelves.

Putin has set a goal for Russia to make better use of its vast land resources and become self-sufficient in food. For now, that seems a long way off.

Russia spends $2.7 billion a year on European fruit and vegetables alone and also imports large amounts of meat, dairy products and processed foods.

Russia can, however, put bread on the table. The country produces all the grain it needs and has a large surplus of wheat and barley for export.

Gorst is a special correspondent.