EAEU governments think about food stabilization fund

Further deepening of integration within the framework of the Eurasian Economic Union (EAEU), in addition to the already existing proposals and measures, may be supplemented by a mechanism less typical for the “five”. Prime Minister Mikhail Mishustin on Thursday, June 8, at a meeting of the intergovernmental council of the union in Sochi, proposed the creation of an emergency food fund of the union to stabilize domestic markets. The EAEU is also looking for untapped reserves, mainly in terms of decisions already made: we are talking about accelerating the construction of a support system for Eurasian cooperation projects, harmonizing public procurement markets and expanding transport corridors.

On June 8, in Sochi, the prime ministers of the EAEU countries gathered at an expanded meeting of the intergovernmental council – in addition to members of the union and observers – Uzbekistan and Cuba, whose prime minister arrived personally this time, the prime ministers of Azerbaijan and Tajikistan, as well as the deputy chairman of the government of Turkmenistan, became guests of the event. Opening the meeting as the country chairing the EAEU this year, Prime Minister Mikhail Mishustin put forward two new initiatives in terms of food security – this is the creation of a system for monitoring the food security of the EAEU (current data, according to him, demonstrate the achievement of the indicator for grain and vegetable oil ), as well as the creation of an “emergency food fund”.

“In conditions of instability in foreign markets, the fund will help stabilize the situation if such a need arises,” Mikhail Mishustin explained.

The details of the mechanism are yet to be discussed. For the Russian Federation, it may turn out to be a way to diversify demand for the products of its agro-industrial complex to relieve the domestic market, which has been experiencing overproduction in recent years (for example, the most massive export product, grain), and foreign trade deliveries are complicated by sanctions restrictions on settlements. However, if the participation of the EAEU countries in the fund is traditional (due to the size of the economy, the Russian Federation, as a rule, accounts for most of the total contributions), then the mechanism will de facto duplicate the state grain fund already existing in Russia, but with wider opportunities for implementation purchased. It is noteworthy that recently the head of the Ministry of Agriculture, Dmitry Patrushev, disavowed earlier statements about expanding plans for purchases to the Russian state fund to 10 million tons – an alternative in the form of a union fund looks more promising for regulating food markets.

Another way to stabilize markets and contain food prices (in 2022 in the EAEU they grew by an average of 13%) was previously called the predictability of introducing restrictions on supplies, removing barriers and joint projects (see “Kommersant” dated February 3). In the elimination of barriers, as the head of the Eurasian Economic Commission (EEC) Mikhail Myasnikovich said on Thursday, there are already some progress – out of 11 obstacles, the need to eliminate which was discussed in 2022, eight have already been removed, three are “in a high degree of readiness”. However, in total, 41 obstacles remain in the markets of the union (see “Kommersant” dated June 8), in connection with which the intergovernmental council again heard statements about the need to accelerate their removal.

As part of the integration agenda of the union, the study of the necessary depth of the process in various areas continues.

The boundaries, however, were outlined by the Prime Minister of Kazakhstan, Alikhan Smailov, who called for the development of the Eurasian project “in the economic plane”, where the untapped potential is great. For its disclosure, it was discussed, for example, empowering the EEC with powers in the field of trade and tariff policy in order to speed up decision-making in this area when implementing joint projects. As Prime Minister of Belarus Roman Golovchenko noted, it is also necessary to speed up industrial cooperation: a mechanism for subsidizing lending to projects with the participation of at least three countries of the Union in the amount of about $20 million per year has already been adopted, but “the main decisions on the implementation of the program itself” have not been made ( including the issue of potential creditors), which “leads to the erosion of the integration effect”. Also, Roman Golovchenko noted, the EAEU does not “properly” use the potential of the public procurement market (total $ 180 billion a year) – the share of purchases of goods from third countries on it reaches 80%. “We should instruct the EEC to look again at what is the reason for such a high degree of imports,” he added. It should be noted that in part this may be due to the unsettled at the level of the EAEU technical issues of the union’s single public procurement market (see “Kommersant” dated August 24, 2022). The Belarusian side also called earlier for the expansion of mutual access to procurement by state corporations.

Another direction of using the economic potential of the EAEU is the development of logistics: almost all prime ministers spoke about the need to develop transport corridors North-South, East-West, as well as the “promotion” of transport and logistics topics in dialogue with the SCO and BRICS. However, only Prime Minister of Armenia Nikol Pashinyan noted the “certain difficulties” arising here, without specifying their nature – we can talk about the complexity of calculations, non-harmonized procedures and legal regimes, differences in standards and dimensions in railway transport, limited capacity of certain sections of roads. As Deputy Prime Minister Marat Khusnullin explained to Kommersant, “taking into account the change in the situation over the past year, it is necessary to redistribute Russian cargo traffic to the East and South,” but the process is limited by the readiness of the transport infrastructure. In the EAEU, Mr. Khusnullin explained, work is underway to integrate the road and rail networks of Central Asia and Russia: it is proposed to create working groups to calculate the cost of construction, determine the timing and areas of responsibility, and work out seamless border crossings, in particular, through electronic navigation seals.

Evgenia Kryuchkova, Sochi