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Washington DCNovember 30, 2015
A street vendor in Moscow displays fruits and vegetables grown in Turkey. PHOTOGRAPH BY RYAN BELL
Which has more firepower: an air-to-air missile or a Roma tomato? One can down an aircraft, but the other can cripple a food industry.
When Turkey shot down a Russian fighter jet, President Vladimir Putin said he felt “stabbed in the back.” There would be consequences, he promised, for the attack that ultimately killed two of his servicemen. Early reports made it sound like Russia would surely impose a ban on food imports from Turkey. One government advisor, Gennadiy Onishchenko, even called for a tomato boycott, all but equating Turkish tomatoes sold in Russian grocery stores to blood diamonds.
However, President Putin's recent decree was vague about whether or not an embargo would go into effect. The package did specify: revoking visa-free travel for Turkish citizens; limits on Turkish companies and workers doing business in Russia; a boycott of the Turkish tourism industry; “tightening” the enforcement of imports from Turkey; and limiting “certain” products imported from Turkey. The latter is a catchall category under which Russia may later sanction Turkish food.
Why waffle? Because given the state of Russian food security state, tomatoes are a volatile weapon. Throwing them can do as much harm to it's own food industry as it would to Turkey’s.
In the geopolitical playbook, a food sanction is a move that must be used carefully, lest it work against you. Russia already has one food sanction in play, the Western Food Ban, which was a response to the sanctions put on it by Europe and the United States over the events in the Ukraine. That move is still developing, with the outcome uncertain. In the meantime, Russia must think carefully about setting another food sanction in motion.
Manufactured goods from Turkey are being treated like usual suspects, though a food embargo has not been decreed. PHOTOGRAPH BY RYAN BELL
In Xs and Os, here’s how the Western Food Ban works: the government blocks Western food products from entering Russia. Into the gap rush domestic food producers (See For Some Russian Farmers, Trade Sanctions Never Tasted so Good) and new trade partners -- Turkey being chief among them.
As a member of the Eurasian Economic Union (along with Belarus, Kazakhstan, and Russia), Turkey was suited up and ready to play. In 2014, Turkish goods grew to 9 percent of Russia’s total food imports, equaling $1.7 billion (up from $844 million the year before). One in five fruits and vegetables are of Turkish origin. In September, the leaders of these now-beleaguered nations had even discussed tripling all trade to $100 billion by 2023.
There’s more. Turkey buys 12 percent of Russia’s wheat exports -- a commodity whose importance has grown as oil prices go down and the ruble declines in value. Turkey mills the wheat into the flour it uses for manufacturing things like pasta, much of which ends up back on Russian shelves. Turkey is also a major buyer of Russian sunflower, some of which also makes a round trip as manufactured food products.
The Kremlin says it has other buyers lined up for its wheat and sunflower. Turkey also has replacement vendors in the queue, including the Western-led government in the Ukraine. If Russia pulls its wheat or sunflower, Russia risks pushing Turkey into a deeper alliance with the West.
Food sanctions have unpredictable consequences. The Western Food Ban is having a grinding effect on the Russian food industry. Buried in last weeks headlines was news that a grocery store chain is closing. Stockmann’s, a Finnish-owned company, has decided to divest its Russian interests (food, cosmetics, home, and fashion stores). As an EU member, Stockmann’s owners could not supply their Russian stores with neither Finnish products nor those from their network of European partners. Stockmann’s tried to adapt, carrying replacements from countries like Turkey, but the costs were high, and the returns low. Last year, Stockmann’s stores had a combined operating loss of 26 million Euros.
Stockmann department stores, a Finnish-owned, once heralded the arrival of international business to Russia. But after 26 years, the company is selling its stores in Russia. PHOTOGRAPH BY RYAN BELL
Stockmann sets a dangerous precedent. Another foreign-owned grocery store, Auchan’s, has as much reason to close up shop. The French-owned company was singled out for surprise food checks, and accused of storage, processing, and sales violations. The heightened surveillance was ordered by the Russian deputy prime minister, suggesting the government was singling it out as part of the Western Food Ban.
Auchan seems to be blacklisted. Remember that Russian official who correlated tomatoes to missiles? His exact quote was: “Every Turkish tomato bought in Auchan or at the market is a contribution toward the next rocket to be fired at our guys.” At even the rumor of sanctions against Turkey, Auchan was being presumed guilty of infractions against rules that weren’t in place.
The decision to defer the food ban may last for only a few weeks. With Russian families set to cook large meals for the upcoming holidays, the government says it will postpone actions that would inflate food prices. Still, it has advised food suppliers to start finding replacements for Turkish products, in what's becoming a familiar routine. Only, this time, their search will take them farther and wider, perhaps even to South Africa and Argentina.
With food sanctions becoming a default move for Russia, how long before such geopolitics result in shortages on grocery store shelves?
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