The Consequences of the Imposition of Restrictions on Pork Imports in 2014 and the Import Substitution Prospects for Russia's Domestic Pig Farming Sector

Abstract

The short-term consequences of the bans imposed in 2014 on pork imports into Russia from the countries that used to be major suppliers of meat to this country are as follows: an altered geography of import supplies, rising prices on the pork market and related markets, and plummeting consumer demand for meat and meat products. At the same time, the medium-term perspective offers some favorable opportunities for turning the domestic pig farming sector into the main source of import substitution. The present course towards boosting import substitution is fraught with the risk of overinvestment into that sector with the resulting market oversaturation, while the rate of return on investment in the sector is too low to ensure loan repayment.