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Article: Russia steps up efforts to maintain food security amid Covid-19
30 March 2020
Read below an article taken from our IEG Vu platform dated
27/03/20.
Russia became one of the latest countries to react to the
Covid-19 pandemic's rapid spread and its implications to the
economy. In the last week, the government has introduced a number
of proposals to mitigate the worst effects.
Putin's proposal of moratorium on sanctions and trade
war
Putin, during his speech at the G20 summit today (March 27), has
proposed to the world leaders a moratorium on trade wars and
sanctions and an establishment of mutual supply of medicines, food,
equipment and technology.
"Ideally, we should introduce a moratorium, a joint moratorium
on restrictions on essential goods, as well as financial
transactions for their purchases," the president said. Putin
emphasised that the main countries to benefit are those that
"suffer most from this pandemic".
Import 'green corridors' established
Russia's prime minister Mikhail Mishustin has announced that
Russia will open 'green corridors' for a number of import
categories to reduce the impact of coronavirus (Covid-19) on the
country's economy.
Mishustin said: "We are taking proactive measures to prevent the
mass spread of the virus in our country and reduce its impact on
the economy… From tomorrow [March 20], for one month, all
restrictions, including customs, for the supply of essential goods
are lifted. A zero-customs duty rate is set for the import of a
number of goods, including medicines and medical devices."
According to importers, at the moment there is no exact list of
the types of products that can be classified as essential goods.
The only point of reference the industry has is the 'List of
certain types of socially significant essential food products, for
which maximum allowable retail prices may be set', which was
created after passing of the Decree of the Government of the
Russian Federation of July 15, 2010 No. 530.
The list includes:
Beef, pork and lamb (except boneless meat)
Chicken (except chicken legs)
Unfinished frozen fish
Butter and sunflower oil
Drinking milk
Eggs (from chickens)
Granulated sugar
Edible salt
Black tea
Wheat flour
Rye bread, rye-wheat bread, wheat flour bread and bakery
products
Vermicelli
Cereals (polished rice, millet, buckwheat)
Vegetables (potatoes, white cabbage, onions, carrots)
Apples
Abolition of preferential tariffs for imports from developing
countries
In a separate development, the country's finance ministry
(Minfin) supported a proposal by Minselkhoz to exclude some HS
codes from the list of goods originating from developing countries
that currently have preferential tariffs, when imported into the
EAEU.
Minfin has proposed to remove tariff references for palm oil,
frozen cattle meat, cheeses and cottage cheese, cut flowers,
apples, pears and quinces.
The system of tariff preferences for imports from developing
countries was introduced in the EAEU on January 1, 2010. It gives
the right to apply zero or reduced import duty rates; the current
list of goods was approved on January 13, 2017.
The list of developing countries, which currently enjoy
preferential tariffs, includes large exporters of meat Brazil and
Argentina, one of the main exporters of flowers in Ecuador and the
main supplier of palm oil, Malaysia.
Import duty reset proposal
Minselkhoz has proposed to abolish import duties on multiple
agriculture products to avoid Covid—19 related food, raw
material and agricultural product shortages in the country.
The ministry said: "In order to curb rising prices for socially
significant products, the Ministry of Agriculture is considering
the possibility of initiating the issue of zeroing import duties on
certain groups of goods and raw materials for the production of
agricultural products".
The letter, asking for proposals on establishing a temporary
zero import duty on agricultural products, raw materials and
foodstuffs, was sent to the 21 largest industry associations. This
included the Association of Confectionery Enterprises (ASKOND), the
National Meat Association, the National Union of Milk Producers
(Soyuzmoloko), the National Union of Pig Breeders, the National
Union of Fruit and Vegetable Producers, the All-Russian Association
of Fishery Enterprises, Entrepreneurs and exporters (WARPE),
Russian Union of Flour and Groats Enterprises, Union of Russian
Sugar Producers, Union of Potato and Vegetable Market
Participants.
The dairy industry is enthusiastic about the proposal. Head of
Soyuzmoloko, Artem Belov, said that the measure would make sense
for those product categories, on which Russia is dependent for
imports -like baby formula, veterinary preparations, breeding
material and so on. On the other hand, the country's dairy
production is also dependent on currency movements.
He added: "For these items, which are sensitive to the exchange
rate and are not produced in Russia, it would be correct to clear
customs duties in order to restrain price increases."
