Agrifood export promotion strategies in post-Soviet countries

Moscow, Russia – The workshop titled “Agrifood export promotion strategies in post-Soviet countries”, organised by FAO, was focused on best practices and challenges met in the agrifood export promotion by some countries from Europe and Central Asia. The participants of the seminar also reviewed the roles and responsibilities of different government agencies in this field and outlined possible measures to develop or improve export promotion policies.

The Moscow seminar brought together national experts and representatives of ministries with experience in designing, implementing or analysing export promotion policies and programs from 12 post-Soviet countries, namely Azerbaijan, Armenia, Belarus, Georgia, Moldova, Kazakhstan, Kyrgyzstan, the Russian Federation, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

“What trend do we witness in our region today? Lately, all the post-Soviet countries have either adopted or are in the process of working out programmes and strategies on agrifood export promotion due to become part of their national legislation. Many governments of these states have prioritized boosting export volumes because it is regarded as one of the stimuli for economic growth while an effective foreign trade policy is instrumental in innovative development and sustainable growth in the agricultural sector,” Iryna Kobuta, economist with FAO Regional Office for Europe and Central Asia, pointed out in her speech.

The Europe and Central Asian region has a strong agri-food export potential, as proved by statistics. In 2016, agrifood export of the 12 post-Soviet countries amounted to approximately $40 billion, or around 3% of the global total. Russia was the largest exporter in this category with supplies to foreign markets exceeding $17.2 billion, followed by Ukraine with $12.7 billion, Belarus with $4.2 billion, and Kazakhstan with $2.2 billion. The volume of agrifood export of other countries of the group totalled less than one billion US dollars.

However, in the last five years (2012-2016), agrifood export in most of the post-Soviet countries went on the decline. Many countries are major importers with the volume of imported products in most cases surpassing the volume of exports. In fact, the majority of the 12 countries are netto importers. Russia is in the lead with a passive balance of $8.3 billion in 2016. In contrast, Ukraine is a netto exporter with a positive balance of $9.1 billion, joined in this category by Moldova and Belarus ($337.4 million and $61.9 million, respectively).

The agrifood export fundamentals differ from one country to another, often quite drastically. In the Republic of Tajikistan, for instance, the agricultutal sector is second only to the services sector, providing 35% of all tax revenues and employing 70% of the workforce. Yet, there are objective obstacles that hamper exports and freeze the low competitiveness of local producers.

Sayyora Abdullaeva from the Chamber of Commerce and Industry of the Republic of Tajikistan noted several negative factors. Low competitiveness due to low technological development. Red tape hampering exports from the country and being a problem in neighbouring countries too. Limited entrepreneurial freedom. Unpredictable “playing field” for business. Limited interest in innovations. The absence of institutions in charge of promoting trade inside the country and foreign trade too. Low level of government support for agri-food exports.

However, there are good grounds to expect that the situation would change for the better once in 2018 an Export Bank is set up to provide credits for logistics and to cover other costs related to exports, as well as an export promoting agency, and the finalization of compiling the exporters and importers registry

In the post-Soviet region, the promotion policies that would benefit agriculture and food industry are still in the process of taking shape, as many speakers at the seminar thought it necessary to underline There is very limited experience with developing institutions and implementing programs to address the challenges associated with diversifying the export base or entering new markets. The main challenges for agricultural exports development in the region are those related to competitiveness of agrifood products for export, sanitary and phytosanitary systems and certification as well as limited knowledge and skills to deal with exports.

The main role of a government in promoting exports lies in creating a positive environment and establishing an export promotion policy framework in close collaboration with the private sector. A number of countries from the region, for example Kyrgyzstan, Moldova and Russia have prioritized efforts to identify lucrative products and markets.

Other measures for successful export promotion in a new market could be forging, for example, international business relationships and gaining government support for exporters’ participation in various trade fairs, which would allow the development of a positive image of the country as well and set up new trade connections. Greater attention to trade facilitation, in particular simplification of customs procedures and border crossing, is another key area for action.

Dmitry Bulatov, President of the National Union of Food Exporters (Russia), suggested to complement the list of programmes and initiatives undertaken by FAO with the following activities:

• Conduct polls among CEOs of companies either involved in agrifood exports or in the promotion of these activities, as well as among representatives of associations of producers and exporters and independent experts;

• Organize workshops embracing local experts and FAO representatives;

• Conduct seminars (training) on agrifood exports policies with FAO experts;

• Raise awareness through publications in the post-Soviet countries and in international media outlets;

• Compile regular surveys focused on post-Soviet countries and publish them on Agricultural Trade Expert Network in Europe and Central Asia website;

• Promote the inclusion of the findings of these surveys into national strategies and programmes.

Recently, post-Soviet countries have made progress in putting together export promotion policies, including agrifood exports as one of the priorities. However, in many cases, the emphasis still falls on filling in the domestic market, in particular, within the policy of import substitution, while government institutions leave issues of agrifood export promotion on the back-burner.

Despite the indisputable relevance of agrifood export “it is essential not to forget about sustainable development goals, as stipulated by the United Nations, in order not to push for agrifood export “at all costs” and, ultimately, not to deprive future generations of the natural resources,” Director of FAO Liaison Office with Russian Federation Eugenia Serova emphasized.

In this context, it is appropriate to accentuate that FAO is supporting countries in the region with knowledge sharing and analysis of the experience with agrifood export promotion at the global level.

The participants of the FAO seminar in Moscow agreed on the expediency to continue the interaction and dialogue on this subject in the coming months.

Related links:

• Agricultural Trade Expert Network in Europe and Central Asia
• World Trade Organization (WTO)
• Experts: adopt a targeted strategy to promote agricultural exports
• FAO study maps agrifood trade policies of post-Soviet countries
• National Union of Food Exporters