Russian Cut Back on Meat Imports Could Hurt U.S.

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The New York Sun

MOSCOW — Russia could cut poultry and pork import quotas by hundreds of thousands of tons, the country’s agriculture minister said today. The move could hit American producers hard and comes amid heightened tensions between Moscow and Washington over the war in ex-Soviet Georgia.

“It is time to change the quota regime and reduce imports, which have unfortunately built up in recent years,” Alexei Gordeyev told reporters, according to the ITAR-Tass news agency.

He said domestic producers could make up the shortfall if imports were reduced.

Any substantial cuts would likely have a significant impact on American poultry producers, for whom Russia is the biggest market. Russians sometimes refer to American poultry imports as “Bush’s legs,” a reference to the frozen chicken shipped to Russia amid economic troubles following the 1991 Soviet collapse, when the current American president’s father was in office.

Earlier this week, Prime Minister Vladimir Putin backed proposals to freeze some of the agreements — particularly in the field of agriculture — relating to its efforts to join the 153-member World Trade Organization. Officials claim Moscow agreed to certain conditions with member countries in return for their help in fast-tracking Russia’s entry.

“Agreements signed more than three years ago as part of the negotiations on WTO accession are unfortunately no longer in Russia’s interests,” Mr. Gordeyev said. “To put it mildly, we’ve been deceived.”

Last month, Russian and American lobbyists agreed in principle to cutting poultry imports to Russia from 2009.

American producers supply nearly 75% of the total poultry import quota set by Russia, which stands at 1.2 million tons.

An analyst said Russia’s timing was no coincidence.

“It has been on the agenda for some time,” the chief strategist at UralSib bank in Moscow, Chris Weafer, said. “But the fact that it has been mentioned now is almost certainly linked with the rhetoric that we’ve had from Georgia, and from Prime Minister Vladimir Putin. … It has just been accelerated as a result of current events.”

Russian forces drove deep into American ally Georgia earlier this month. Moscow has kept troops in the Caucaus nations despite Western protests and on Tuesday ignored President Bush’s exhortation against recognizing the independence of two Georgian separatist regions.

The president of the USA Poultry & Egg Export Council, Jim Sumner, said it was important to separate economics from politics.

“We recognize there needs to be a balance between imports and domestic production in Russia,” he said, speaking from America by telephone.

Overall, poultry imports account for nearly 40% of Russia’s total consumption, and pork around 30%. The government has pursued a policy to prop up its agriculture industry in recent years, making efforts to attract domestic and foreign investment into a sector which has suffered from massive lack of investment in the past decades.

President Medvedev told the Group of Eight nations earlier this year that Russia had a key part to play in addressing the global food crisis. He said that in the long term, Russia would significantly increase its agricultural production and supplies to the domestic and foreign markets.

But analysts say it will take Russian producers time to plug the gap left by foreign producers. It could take up to two years for domestic supply to match demand, pushing up prices in the process, an analyst at Renaissance Capital investment bank, Natalia Zagvozdina, said.

The New York Sun

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