Irish farmers are biggest losers in Russian farming boom

Few people understood Russia as well as former British prime minister Winston Churchill. On the outbreak of World War II in September 1939, Churchill described Russia as “a riddle, wrapped in a mystery, inside an enigma. But perhaps there is a key (to Russia): That key is Russia’s self-interest”. Not much has changed in Russia in the last 80 years.

Four years ago, Irish farmers and food producers lost a very lucrative export market overnight. It was worth nearly €0.5bn a year. The closure of the vast Russian food market for EU and American meat and dairy products was a major shock for all concerned. But Irish farmers and food producers were disproportionately and unfairly curtailed by the ban on food exports to Russia.

Specifically, they are still the single biggest losers to date arising from a political row between Russia, America, and the EU. But there may be worse to come.

The only winners in this political row are Russian farmers and food producers. For that reason alone, we haven’t yet experienced the full consequences of the closure of the Russian market. Irish farmers and food producers are already beginning to feel what is coming down the line. The crunch for them will come sooner than they expect. Lower grain, beef, pork and milk prices may be here to stay. This is because European and American farmers are now facing serious competition from Russia in EU and global markets.

Toxic boom

For the first time in history, we now find ourselves in this unfortunate position. Accordingly, it may take us a long time to adjust to the new realities. For the first time in over 100 years of famine and stagnation, Russian farming and food production enterprises are booming. The fall-out from developments on farms all across the Steppes of Russia may be toxic for Irish farmers and food producers. Rapidly rising agricultural production and produce prices on Russian farms continue to increase global supply which has the effect of pushing down prices. This is not in the best interest of Irish farmers. There are no signs that this trend will change any time soon.

But while Russia closed one door for Irish food producers, it opened another for Irish agribusiness companies. Currently, there are some very enterprising Irish agri-companies that have already blazed a trail in the rapidly developing Russian agricultural and livestock markets. These include: Hermitage Pedigree Pigs; The National Cattle Breeding Centre (NCBC) and ICBF; Dairymaster; SAMCO, HiSpec and McHale Farm Machinery; Sylvan Mushroom Spawn; Donegal Seed Potatoes; EasyFix and Mayo Mats; Pedigree Cattle Exporters and many more.

Enterprise Ireland, Bord Bia and the Irish Embassy in Moscow are all present in developing the Russian market. Up to now, the main players in Russian agri-markets were American. But Trump is changing all of that. Therefore, now is a great time to be an Irish agri-company in Russia. Modern Russian food, farming & agribusiness markets are growing at unprecedented rates.