Central Asia Keen to Feed Russian Market

Analysts warn that the Central Asian states will find it hard to capitalise on Moscow’s boycott of European foodstuffs to boost their own agricultural sectors.

In a decree issued on August 6, Russian president Vladimir Putin announced a one-year-ban on almost all food imports from the European Union and the United States, in retaliation for the sanctions imposed because of Moscow’s actions in Ukraine.

Soon after it announced the ban, Russia invited the former Soviet states of Central Asia to help fill the gap. Agriculture minister Nikolai Fyodorov named Uzbekistan and Tajikistan along with China, Turkey, Argentina and others, as countries he hoped could help Russia make up the shortfall.

Central Asian states responded with excitement. Uzbekistan, the regional leader in agricultural production, said it planned to double export volumes of fruit and vegetables for Russia to 500,000 tonnes by the end of 2016. Tajikistan pledged to increase fruit and vegetable sales to Russia fivefold, and Kazakstan quickly held talks with Russian officials on boosting exports of meat, dairy products and vegetables.

Russia used a meeting of the Eurasian Economic Commission, the regulatory body of the Moscow-led Customs Union that also includes Belarus and Kazakstan, to drop existing previous barriers to fruit and vegetable imports from Kyrgyzstan. Not currently a member, Kyrgyzstan is hoping to join the trade bloc by the end of this year.

Kyrgyz economy minister Temir Sariev has called on the country’s farmers to consolidate themselves into associations, as Russian wholesale buyers and processing plants will not deal with multiple small-scale suppliers.

Some experts are warning of the dangers of an over-eager response to Russia’s call for more foodstuffs from Central Asia. It is unclear whether their agricultural sectors can gear up so fast, and any case the Russian ban on foodstuffs from the West is only for one year. And even if production can be increased, a focus on exports will reduce food availability locally, driving up prices.

Danil Ibraev, Kyrgyz deputy economy minister, told IWPR that he was aware of the risks for domestic prices, but that these would be outweighed by the positive effects.

“Price increases will benefit not one person but a group of farmers. They will be able to buy machinery, build storehouses, increase production and so on,” Ibraev said.

In Kazakstan, Zeinulla Kakimjanov, a former finance minister and now a businessman, sparked debate when he expressed doubt that the new demand from Russia would result in increased production. In a Facebook post, he wrote that agriculture is not “a conveyor belt which can be quickly switched on and off”.

Kakimjanov also noted that the brevity of Moscow’s one-year ban meant it was unlikely that agriculturalists would risk switching to Russian exports and risk jeopardising long-terms relations with existing clients.

This view is widely shared by producers, who point out that the announcement comes late in the farming year.

Damira Bukanchieva is director of the Tokmokplodoovosch factory in Kyrgyzstan, which sells fruit juices and processed vegetables to the domestic market and neighbouring Kazakstan.

She said that while selling to Russia was a very attractive proposition, it was one she could only pursue in the event of surplus production, as the factory already had other contractual obligations.

“We will make [export] plans only for next year, as we’ve only been informed about this recently,” Bukanchieva said.

Maria Dosanova of the Saryagash fruit company in southern Kazakstan, close to the Uzbek border, said the country simply did not produce enough crops.

“We will be able to cover [demand] with the help of Uzbekistan,” she said.

Despite Uzbekistan’s large farming economy, the fact that export-related businesses are controlled by just a few individuals with close links to government, some analysts doubt it will be able to readjust to a new market.

Smaller Tajikistan is also hoping to benefit from opportunities to sell to Russia. Firuz Saidov, an analyst with the Centre for Strategic Studies, is confident that Moscow’s call to replace Western imports would enable Tajikistan to raise current production levels.

“At the moment, production volumes are low, but we could cover ten to 15 per cent of Russia’s demand [for fruit and vegetables],” Saidov said.

These projections are contested by other experts, among them Dushanbe-based economist Zulfikor Ismoiliyon, who said Tajikistan itself had a shortfall in production and imported fruit and vegetables from China, Iran and Pakistan.

“We have watermelons, but they are not of good quality. We sell them to Afghanistan and Pakistan and we buy potatoes there. We can export only grapes, cabbages and dried fruit to Russia,” he said.

Ismoiliyon emphasised that the days when Tajikistan was a major agricultural producer within the Soviet Union were long gone.

“Despite the fact that many people take agricultural land and turn it into orchards, these don’t yield much,” he said.

Nadia Bukeikhanova is an IWPR editor in Kazakstan. Timur Toktonaliev and Nilufar Karimova are IWPR contributors in Kyrgyzstan and Tajikistan, respectively.