Agricultural policy in Russia and WTO accession

Abstract

This article analyzes the implications of World Trade Organization (WTO) accession for Russian agricultural policy. Using Organisation for Economic Co-operation and Development (OECD) data on producer support from 2010, we identify two major characteristics of Russian agricultural and trade policy (a) reliance on sizeable differences between world and domestic prices to generate two-thirds of agricultural producer support and (b) highly distortionary budget support. We then consider whether the disciplines introduced by WTO accession will constrain or even roll back these distortionary policies, thereby substantially changing the nature of agricultural policies in Russia. Using data from OECD-FAO (Food and Agriculture Organization of the United Nations) and Russian Ministry of Agriculture projections, we conclude that the structure of OECD-type producer support in 2020 will be very similar to its current state. Market price support will continue to dominate the Producer Support Estimate, and the projected Current Total Aggregate Measure of Support (AMS) will approach the WTO Bound Total AMS (the ceiling on production-distorting support) only in 2018. For the reasons above, we conclude that although WTO accession provides opportunities for important changes in Russian sanitary, phytosanitary, food safety, trade, and tariff policies, membership is not a guarantee of systemic change. In fact, a serious look at Russian WTO commitments makes a minimum-change scenario quite possible and even likely.