During the Soviet era, Russia was a gross grain importer and over the last few years the country has grown as the largest grain exporter. Through the new food policy Russia seemed to have set an achievable target as grain exports to other countries are expected to reach 38mn tons by 2015.

Russia during the World Grain Forum in June, 2009 had initiated a food security tie up with the largest wheat consuming states such as India, China and Turkey to build wheat reserve stocks as well as to cushion future price slides, which has been faced by Russian farmers today. Despite the second-best year for exports and increasing demand from livestock farmers, grain prices still remain low on account of high domestic grain inventory.

Viktor Zubkov, the first Deputy Prime Minister of Russia during the Forum had urged foreign investors to develop the 20mn hectares of unused arable land in Russia. The country’s wheat production has crossed 65mn tons, and has set eyes at producing 100mn tons this year despite sinking wheat prices.

In a last week’s report by RIA Novosti, it stated meat production in Russia was also witnessing significant growth over the past few years. Agriculture Minister Elena Skrynnik while she met Medvedev informed domestic meat production grew 14 percent to 3.3mn tons last year, reducing imports by 20 percent.

Similarly, though Russia is short of poultry production, the recent ban on the US poultry is intended to stimulate domestic poultry production. Russia banned imports of the US chlorine-treated poultry as of 1 January on non-compliance to country’s safety standards, a decision likely to hike domestic poultry prices.

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The proposal broadly aims at managing grain reserves and prices; and also to improve necessary infrastructure including developing rail network and port capacity through creation of a pool. The Ukrainian Agriculture Policy Minister Yuriy Melnik and the Kazakh Deputy Agriculture Minister Arman Yevniyev welcomed Russia’s proposal during the first such forum.

The US has already come out with a statement saying a cartel in the line of OPEC would only delay Russia’s decade-old ambition of joining the 153-member WTO. Michael Michener from the US Department of Agriculture said Russia the third largest wheat exporter was jeopardizing its chances of becoming the WTO member since such a formation is against the WTO guidelines.

Russia is planning to bring more land under grain cultivation in the coming years as they have 10 percent of world’s arable land that has turned fallow after the collapse of the former Soviet Union. Russia has millions of hectares of chernozem (black earth), an ideal soil for agricultural purposes which are formed by partially decomposed organic matter.

If the new grain union takes shape, it would become the largest exporter and producer of global grain market. In the next 10 to 15 years, Russia plans to produce up to 135mn tons of wheat annually and export 40 to 50mn tons of it, Skrynnik later added. Last year’s bumper harvest made Russia the fourth largest grain producer in the world.

While food prices skyrocketed, Medvedev first proposed such an idea last July to augment food security. It should be noted that a report from London-based think-tank Chatham House early this year stated the climate change, water scarcity and competition for land would make it hard to meet an expected 50 percent rise in demand for food by 2030. Deputy Prime Minister Viktor Zubkov told that some of Russia’s 9.6mn tons of grain stockpiles would be set aside to provide humanitarian aid through the UN World Food Program to countries facing starvation as the fallout of global economic crises.

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