By William Liefert, Olga Liefert, Stefan Osborne, Eugenia Serova, and Ralph Seeley

During the 1980’s, Russia (as well as the Soviet Union in the aggregate) was a large importer of grain, soybeans, and soybean meal. Most of the imports were used as feed to support the policy-driven expansion of the livestock sector. When economic reform began in the early 1990’s, Western studies showed that effective reform could turn Russia from a major grain importer to a major grain exporter. By 2000, however, these forecasts had not yet been fulfilled but in both 2001 and 2002 there were exportable surpluses and rising grain production which may be signs of an improving agricultural system that could give rise to a long-term rise in output. Could rising productivity finally fulfill the forecasts of the early 1990s by turning Russia into a major grain exporter? Might productivity growth also expand the country’s livestock sector, such that Russia substantially reduces its meat imports?

This paper examines how changes in Russian agricultural productivity, consumer income, and policies, as well as changes in other variables, could affect the country’s trade in grain and meat. The paper uses a model for Russian agriculture to forecast Russian production, consumption, and trade for grain (wheat and coarse grains) and meat.

Various scenarios are run depending on different assumptions concerning two key variables: (1) the degree of productivity growth in Russian agriculture (reflecting the effectiveness of agricultural reform); and (2) trade policy developments.

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