Vladimir Putin’s decision to place Russians on a Soviet diet is bad news for the salmon roe industry in Washington, but it won’t have a huge impact on the state’s economy. On the other hand, the halting of imports as part of a spitting match with the West will provide a case study in macroeconomics.
Last week, Putin ordered a one-year ban on most food imports from North America, Europe and Australia. The move comes in retaliation for economic sanctions over Russian involvement in Ukraine, and it will prevent access to a market that brought in $15.8 billion in food and agricultural goods from the European Union in 2013 — and $1.3 billion from the United States. While that is not good news for U.S. food producers, it’s not crippling. And the decision gave rise to a new joke in Russian circles: “The president decided to show he’s a Western leader, too, and imposed sanctions on Russia.”
The decision to halt vast food imports in an import-heavy nation is expected to hurt Russian consumers most of all, leading to empty shelves, reduced selection and rising prices. As the Associated Press surmised, Putin “is prepared to inflict significant damage on his own nation in an economic war with the West.” And The Washington Post wrote, “The restrictions may drive up the price of ordinary foodstuffs by shrinking supply as demand remains constant. Even many domestically produced foods in Russia depend on foreign imports for some of their ingredients.”
In other words, the decree is reminiscent of the old Soviet Union days, when the collectivization of agriculture and policies of self-reliance in the nation’s food production led to the starvation deaths of millions across Russia. It is a stretch to think that banning Western imports could result in a similar outcome, but as David Cohen of the U.S. Treasury Department points out, limiting access to food is a move “that the U.S. and our allies would never do.”
