Russias grain trade ban highlights importance of domestic supply

The NFU has said todays announcement from Russian Prime Minister Vladimir Putin to place a temporary export ban on grain emphasises the need to maintain productive agriculture at home.

NFU combinable crops board chairman Ian Backhouse said: Wheat prices are up by 70 per cent on prices in June this year, rising 11 per cent on Thursday August 5 alone. Heavy rain is being blamed for wiping out the wheat crop in Canada and todays announcement from Russia comes after the worst drought in more than a hundred years which has devastated crops both there and in the Ukraine.

This is the second time in four years that weather events have led to unprecedented wheat market moves, and demonstrates how finely balanced global supply and demand is.

It’s impossible to speculate on the impact this dramatic market movement might have. But what this does serve to show is how important it is to maintain and develop our own productive capacity in grain faced with unpredictable supply from overseas.

Producers in the EU have a reliable record on their capacity to produce and export and we must remember that stable production in the EU is relevant not just to our own but also to global food security. We have an increasing responsibility to the rest of the world to ensure we fulfill the potential we have to produce more food while impacting less on the environment. As these recent weather patterns demonstrate farmers and growers are being asked to do this against a backdrop of dwindling natural resources and challenging weather patterns. Therefore it will be increasingly important that we participate in international export markets which are fair and transparent.

Of course the bigger picture to this is the European Commission, which is now preparing its thinking on the future of the Common Agricultural Policy to 2020. Events this past week, resulting in extreme market movements, underline the importance of a vibrant domestic grain industry and a strong European agricultural policy that focuses on delivering a more productive, competitive sector to ensure food security both at home and abroad.

Russias export ban is due to start on August 15. Vladimir Putin described the move as expedient to keep domestic prices low and to maintain cattle numbers.