Vladimir Putin: the world’s most unlikely organic food tycoon

7 January 2016

The public execution of a foreign cabbage, a proposal to create a Russian rival to McDonald’s called Eat At Home, and the confiscation of frozen Hungarian geese last year collectively prove that Russian president Vladimir Putin understands the political power of food.

These tit-for-tat responses to Western sanctions over Russia’s role in Ukraine’s conflict have grabbed the headlines but may, in the long term, have less significance than his announcement, in December 2015, that he plans to make Russia “the largest world supplier of healthy, ecologically clean and high-quality food in the coming years”.

After banning genetically modified organisms in food last September, Putin is confident that Russia can become a world leader in organic food. That might sound ambitious but, as he said: “Ten years ago, we imported half of the food from abroad. Last year [2014], Russian exports of agricultural products amounted to almost $20bn – a quarter more than the revenue from the sale of arms.”

The Russian government is investing £48bn in agriculture between 2013 and 2020 (with most of that spend focused on livestock, supply chains and infrastructure) and financing an exponential growth in its network of seaports to facilitate exports of meat and grain.

Food has been an emotive issue in Russia since November 1917 when the Bolsheviks seized power, promising the people peace and bread. Yet in the Soviet era, food was often the servant of ideology. Historian Dmitri Volkogonov estimates that Josef Stalin’s attempt to collectivise agriculture in the late 1920s and early 1930s, in the name of Marxist orthodoxy and scientific progress, probably cost 9.5 million lives, counting those who starved and were executed for opposing the policy.

In 1957, Stalin’s successor Nikita Khruschev announced it was the Soviet Union’s “moral responsibility to produce more meat, butter and milk than the US within seven years". As if that wasn’t ambitious enough, he also declared that farming Kazakhstan’s ‘virgin lands’, an area roughly the size of England, would make the country self-sufficient in grain. The failure of both plans helped inspire his ouster in 1964. By 1978, the regime had to import 10 million tonnes of grain a year to feed its people.

The legacy of Soviet meddling has not entirely been shaken off. Russia has fewer cattle now than it did in the 1940s and, in the last 20 years, more than 106 million acres of arable land have fallen out of use. Ian Proudfoot, KPMG’s head of agribusiness, said: “One obvious Soviet hangover is the huge farms – some up to 400 square miles. Russia doesn’t have enough state-of-the-art machinery to deliver economies of scale over such vast areas when conditions vary from field to field. Yields from these fields are too low, one ton per acre of wheat.”

Putin’s decision to ban many Western foods has left some of the country’s organic producers scrambling to meet demand. Some experts say the government needs to do more to supply new land and long-term credit – and improve logistics – if farmers are to truly prosper.

Yet Putin has, Proudfoot suggests, one unlikely ally: climate change: “With global warming, crop production is being pushed towards the poles and Canada and Russia are likely to be the biggest beneficiaries.”

Look beyond some of the regime’s headline-grabbing stunts and there is a serious strategic goal: for Russia to reduce its economic reliance on energy and increase its food security. Yet for the country to become the world’s largest producer of organic food, many policies and decisions will have to fall into place. Otherwise, Putin – or his successor – could end up making a very similar speech “in the coming years”.

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