Putin Responds to U.S., EU Sanctions by Blocking Agricultural Imports

The Kremlin issued this executive order yesterday in revenge for U.S. and EU sanctions:

Russian state bodies of power, federal authorities, local self-government bodies, legal entities established in accordance with Russian law, and physical individuals under Russian jurisdiction shall, in carrying out their activities, respect for a duration of one year following this Executive Order’s entry into force a ban or restriction on foreign economic operations involving the import to Russia of particular kinds of agricultural produce, raw materials and foodstuffs originating in countries that have decided to impose economic sanctions on Russian legal entities and/or physical individuals, or have joined such decisions.

The Russian Federation Government has been given instructions accordingly. In particular, the Government has been instructed to take measures to ensure balanced goods markets and prevent accelerating price rises for agricultural products and foodstuffs; to organise together with regional authorities timely monitoring of goods markets; and act together with associations of goods producers, retailers and organisations to take measures to increase supply of domestic goods.

Agriculture comprises not quite 4 percent of the Russian GDP, according to the CIA World Factbook, and the country produces grain, beets, sunflower seeds, and some vegetables and fruit. Its top import source is China, followed by Germany and Ukraine.

At a press conference following the U.S.-African Leaders Summit in Washington yesterday, President Obama was asked if sanctions are actually working considering how Russia appears to be close to invading Ukraine.

“Well, we don’t know yet whether sanctions are working. Sanctions are working as intended in putting enormous pressure and strain on the Russian economy. That’s not my estimation; if you look at the markets and you look at estimates in terms of capital flight, if you look at projections for Russian growth, what you’re seeing is that the economy has ground to a halt. Somewhere between $100 billion and $200 billion of capital flight has taken place. You’re not seeing a lot of investors coming in new to start businesses inside of Russia,” Obama said.

“And it has presented the choice to President Putin as to whether he is going to try to resolve the issues in eastern Ukraine through diplomacy and peaceful means, recognizing that Ukraine is a sovereign country, and that it is up ultimately to the Ukrainian people to make decisions about their own lives; or, alternatively, continue on the course that he’s on, in which case he’s going to be hurting his economy, and hurting his own people over the long term.”

“In that sense,” Obama continued, “we are doing exactly what we should be doing. And we’re very pleased that our European allies and partners joined us in this process, as well as a number of countries around the world.”

When asked if the administration would consider providing military aid to Ukraine beyond MREs, Obama noted “the Russian army is a lot bigger than the Ukrainian army.”

“So the issue here is not whether the Ukrainian army has some additional weaponry. At least up until this point, they’ve been fighting a group of separatists who have engaged in some terrible violence but who can’t match the Ukrainian army,” the president said. “Now, if you start seeing an invasion by Russia, that’s obviously a different set of questions. We’re not there yet. What we have been doing is providing a whole host of assistance packages to the Ukrainian government and to their military, and we will continue to work with them to evaluate on a day-by-day, week-by-week basis what exactly they need in order to be able to defend their country and to deal with the separatist elements that currently are being armed by Russia.”

According to RIA Novosti, the list of banned imports from the U.S., EU, Norway, Australia, and Canada includes:

– Fresh, chilled and refrigerated beef;

– Fresh, chilled and refrigerated pork;

– Poultry meat and all edible poultry by-products;

– Salted, pickled, driedand smoked meat;

– Fish and shell fish;

– Clams and other water invertebrates;

– Milk and dairy products;

– Vegetables, edible roots and tuber crops;

– Fruits and nuts;

– Meat by-products or blood, as well as products made of them;

– Ready-to-eat products including cheeses and cottage cheese based on vegetable fats.