Russian agribusiness - a world market forcePosted by Patrick Armstrong on Saturday, 09 July 2011 09:37 | Published in Patrick Armstrong's Russia SitRep
by Patrick Armstrong
Grain exports. When I was in Russia in the early 1990s I visited several farms. In my travels I don’t recall ever seeing a field that was being used for anything except grazing for a scrawny cow or two. I spoke to Russians and Westerners, more knowledgeable than I, who had seen farms; everyone agreed that the situation was, in a word, hopeless. At that time it was said that Russia imported half its food. Something has happened. Last year, with the bad summer, Russia halted grain exports and the world price went up. Exports have just been resumed (perhaps 15 million tonnes out of a total harvest expected to be about 85) and prices went down. Somehow the desperate situation of the 1990s has turned around and Russia is an important grain exporter for the first time since when? a century ago? In the 1990s, the idea of Russia becoming an major food exporter would have been utterly unimaginable. I am not aware of any coverage of this and I would love to see some. Private farming? A restructuring of the decayed remnants of state and collective farms? New land? What? Away from the everlasting barren speculation of neo-Kremlinology there are real stories to cover.
Military. In addition to the problems of modernising equipment, improving its command and control and other matters requisite to becoming modern, the Russian Armed Forces are plagued with three endemic scandals. Military procurement, by many accounts, is a feeding frenzy for corruption. Yesterday, Medvedev gave Defence Minister Serdyukov three days to report on the state of the defence procurement order for this year. Serdyukov is a money man and was brought in to get a grip on where it goes. Second is the pain (and disagreements) of reform: it is reported that “several influential members” of the high command have resigned over implementation of reforms (ormaybe not). Added to this is confusion about the end point. For example, the aircraft carrier dream refuses to die: last week the head of the United Shipbuilding Corporationsaid Russia would get its first nuclear powered carrier by 2023; three days later Serdyukov said there were no plans to build carriers. And, completing the trio, two officershave been charged with extorting money from their subordinates. Serdyukov has just promised to create a special military police department to eradicate this sort of thing as well as bullying. Gradually the searchlight is turning to the military. In 2003 Putin said “The army in Russia, as I have said many times, should be small in size, compact but effective, ready for battle, and provided with modern equipment.” Eight years on, it is far from that goal. Indeed, I often wonder whether it is possible to reform a Soviet-pattern, mass-conscript, big-war army. Perhaps they should start all over again. Peter had to.
Corruption. An investigation has uncovered 30 criminal groups engaged in car theft. The investigators said that their primary focus was catching police and they did: 160 policemen were involved in 12 of the groups.
Economic crimes. Medvedev has smiled upon the idea of an amnesty for economic crimes. Preparatory study is said to be underway.
Magnitskiy. The Investigative Committee has reported that Sergey Magnitskiy died in prison from lack of medical care; this is not news but the announcement of prosecutions to follow may be. Another inquiry suggested he may have been beaten to death. There were dismissals at the time but Medvedev’s comment that “it seems… there really was some crime committed” suggests that more serious charges may be laid eventually.
Belarus. On Friday Lukashenka pledged to restore stability to Belarus: “In the next few months we will completely stabilise the situation… Belarus has not been forced into a corner…as some would like.” A rather stunning admission from someone whose main campaign platform since he began in 1994 would have been “peaceful Belarus”. As the economy gently moves towards the end of its economic and financial possibilities, there are now regular demonstrations and arrests.