Bloomberg: Russia earned on food more than weapons

Because of the embargo on foreign food, huge subsidies and a weak ruble, some Russian agricultural industry began to bring more benefits than oil and arms sales, Bloomberg writes.

The government actively encourages the development of Russian agro-industrial companies. In particular, the companies of the group “Rusagro” last year received subsidies amounting to about 3 billion rubles. As a result, its performance and the net profit was higher than that of such oil giants as “Lukoil”.

The success of the Russian agriculture due to the fact that recently the government seeks to minimize Russia’s dependence on uncontrollable market. In addition, an impressive industry gave impetus to the confrontation between Moscow and Ankara and a partial ban on the import of Turkish products, which has become “a blessing for farmers”, noted by Bloomberg.

The main achievement of the Russian food strategy became a record cereal sales. Russia surpassed the US to become this year’s largest wheat exporter. This momentous event was accompanied by high yields of corn, rice, soybeans and buckwheat. The surplus grain, coupled with a weak ruble led to the fact that the income from food exports was higher than that of the sale of arms.

In addition, increasing export impressively reduced imports - in 2013 Russia has reduced the purchase of foreign food products by about 40 percent.

Russia attaches great importance to reduce dependence on foreign products, and successfully transforms the dying, it would seem, the industry is an important source of economic growth and stable employment, the paper concludes.

9 June 2016

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