Association Perspectives

Comments on Russia’s Possible Export Subsidies

by Alan Tracy, USW President

Last March, the Russian government formed the United Grain Company (UGC) with the laudable goal of fostering investment in grain handling and export facilities. More recently, the new CEO of the UGC announced a goal of controlling 40 percent of Russian grain exports and exporting from government intervention stocks this coming year. Such government support for grain exports is a remarkable turnaround from 2008, when Russia imposed a prohibitive export tax on grains in order to protect domestic users from the high international prices at the time.

We are troubled, however, by Russian plans to sell grain from government intervention stocks at what amounts to prices below their acquisition cost. That amounts to a direct export subsidy from whoever picks up the tab for the difference, presumably the Russian government. Direct export subsidies are the most trade distorting of all subsidies and most players have abandoned them. They are forbidden to World Trade Organization (WTO) members for industrial goods, and the draft language of the Doha Round of trade negotiations would ban them for agriculture as well. Russia is not a WTO member but has expressed considerable interest in joining. If the government sets up export subsidy mechanisms and funding, it will likely have to unravel them soon after. That would send some very confusing signals to both the world market and to its own rural economy.

The path to establishing a strong market economy is not through government intervention and it certainly is not through buying high and selling low. As Australia, the European Union, and the United States have increasingly moved away from direct government involvement in mechanisms that determine the market price, Russia seems to be moving in the wrong direction, back toward the failed command economy of their past.

(The Canadian Wheat Board, however, remains a relic of a collectivist past, but … that is another story. It, too, will lose its often capriciously applied price-setting ability if the Doha Round succeeds.)

Dana Peterson Named NAWG Chief Executive Officer

Peterson came to NAWG from Kansas Wheat, where she worked on policy and membership for almost nine years. Before coming to Kansas Wheat, Peterson spent a short time on the staff of the Kansas Farm Bureau working on environmental programs.

As producer policy specialist at Kansas Wheat, Peterson has been intimately involved in key issues on the national and state levels for nearly a decade. Her experience includes participation in the last two farm bill debates; the push to increase research funding and give wheat producers access to biotechnology; and the industry’s look at new uses and expanded markets for wheat and wheat byproducts, including cellulosic ethanol.

During her time at Kansas Wheat, Peterson also spent significant time managing federal and state grants for producer risk management education and participating in the budgeting process for a $4 million award from the Kansas Bioscience Authority.

Peterson is a double graduate of Kansas State University, having obtained bachelor’s and master’s degrees in agricultural economics there.

She has been an active member of American Agri-Women through the state affiliate Kansas Agri-Women, which provided her first visits to Capitol Hill, as well as the Kansas Foundation for Agriculture in the Classroom and the Kansas Agricultural and Rural Leadership program. During college she studied the costs of federal regulation on small and medium-sized meat packing plants after traveling extensively through the Great Plains on the K-State Meats Judging Team.

Peterson was raised on a wheat farm near Smith Center, Kan., where her family produces primarily wheat, grain sorghum and cattle. Her family first homesteaded the ground two of her four brothers now farm in 1871.

Outside of the office, Peterson is active in her church and with her family, and enjoys hobbies like reading, running and gardening