Analysis of impediments to grain export from Russia, Ukraine and Kazakhstan: Three essays

Abstract

Food security has emerged high on the agenda of development agencies, policy makers and private stakeholders. As a consequence of major events affecting agricultural production such as the world food crisis of 2007-2008 which prompted skyrocketing world market prices for grains, or highly variable weather leading to harvest failures, the governments of exporting countries tend to restrict their exports with the aim of limiting domestic food price inflation and mitigating any negative impacts on their local markets. According to USDA projections to 2025, Russia, Ukraine and Kazakhstan will further strengthen their position on the world wheat market. The countries are known to have unrealised grain production potential, deteriorated grain storage and transport infrastructure, and government interference in agricultural trade, i.e. application of restrictive measures on grain exports. The topic of trade barriers in the RUK countries remains highly relevant as demonstrated by the recent implementation of export duties for wheat in the Russian Federation. Given the highly variable weather in the RUK region as well as other changing macroeconomic factors, it is hard to predict whether the countries will restrict exports in the future. Barriers to trade can be of formal or informal nature. Formal barriers are documented in governmental resolutions, while informal barriers can stem from administrative procedures, the market structure and the institutional framework observed in the country (Deardorff and Stern, 1997). Administrative measures such as the delayed supply of wagons, additional certifications and controls, bribing, preferential access and soft budget constraints for state trading enterprises are a few examples of the informal impediments to trade observed in the RUK region. Both the formal and informal barriers described above lead to higher transaction and time costs, result in foregone opportunities for trade, damage the image of the country and provide disincentives for investments in the sector. This prevents the RUK countries from realising their potential in grain production as well as grain export. Goal of the dissertation: Thus, the general objective of this thesis is to analyse the impediments to grain exports from Russia, Ukraine and Kazakhstan. In order to reach this objective I have divided it into three more specific goals, which are reflected in the structure of the thesis. Each aspect is covered in a separate essay. [...]