Thank You Global Warming! The Russian Breadbasket Returns

Russia now harvests more grain than at any other time in its history

Wed, Sep 20, 2017
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According to the latest estimates, Russia might harvest as much as 133 million tons of grain this year.

This would make 2017 a record harvest not just by post-Soviet standards, which were pretty dismal until the past decade, but relative to the RSFSR’s peak of 127.4mn tons in 1978.

(This is the case even after adjusting for Crimea’s absence from the RSFSR after 1954, since the parched peninsula only produces about a million tons of grain per year).

The US Department of Agriculture predicts that Russia will overtake the US and the EU to become the world’s largest single wheat exporter in 2017, accounting for a sixth of the world’s total and recovering its old Tsarist status as one of the world’s great breadbaskets.

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Incidentally, if it were to also recover its Tsarist era borders, especially the Ukraine and Kazakhstan, it would account for about a third of world wheat exports.

One of the big proximate reasons for this are recent economic developments. Few sectors of the Russian economy have gained as much from the ruble devaluation and the sanctions as agriculture.

However, there are strong secular trends that Russia’s new breadbasket status is here to stay.

The world population is growing, and the climate is warming. This will raise global demand for calories, channeling investment into Russian agriculture, even as crop yields go up thanks to longer growing seasons and more atmospheric CO2, and previously inhospitable lands are opened up for agricultural exploitation.

Russia is predicted to economically benefit more than any other country from global warming, and relatively speaking, agriculture can be expected to benefit more than any other sector. Meanwhile, conviently, major competitors such as Australia and the US will be wracked by droughts.

Russia is no longer the Soviet Union, where grain imports were running at 30 million tons by the 1980s – that is, about as much as just Russia by itself now exports – and draining the country of foreign currency. There are now many agricultural conglomerates competing in a free global market, responsive to price signals and intolerant of waste (about a quarter of the Soviet potato harvest rotted away in transportation). This is an opportunity that Russia will continue to exploit.

Minister of Agriculture Alexander Tkachev has suggested that in the future, Russian export earnings from grain exports may come to equal or even eclipse those from hydrocarbons, in effect fully returning Russia to its foreign trade position during late Tsarism.

This is unlikely any time soon. Even as late as 2015, Russia exported a total of $7.4 billion of crops, which is not only an order of magnitude lower than its $189 billion worth of hydrocarbons and minerals exports, but is not even sufficient to cover its $9.3 billion worth of crop imports (primarily vegetables and tropical crops like coffee and citrus fruits).

Nonetheless, both the global prices for and Russian production of grains is likely to continue soaring in the decades ahead. Meanwhile, the outlook for oil is far less certain. While the supergiants continue depleting rapidly, new extraction technologies have postponed the oil peak for an indeterminate number of future decades, and electric cars will increasingly bite away on the demand side. So Tkachev’s vision is not altogether fantastical.

Source: The Unz Review

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