The Russian government has now banned grain exports due to the shortages. Does anyone agree that this is a good decision made by the government? If so, why? Does anyone consider this to be an embargo on the citizens or did the Russian government made a good decision?
The controls are understandible in intent, but what of the grain producers? They wouldn’t be exporting in the first place if Russian citizens were buying their grain and at a competitive price. Looks like the grain guys are going to be getting that second job after all..
If the grain crop failed, there will likely be imports of grain into Russia, so the measure is purely for show.
One wonders about next year. If the grain growers won’t see a satisfactory profit this year, why will they bother doing it next year?
In an ideal world, if there is a shortage, then other countries would send their grain to Russia to profit from the high prices. And the Russian growers would not export it anyway, because there is more profit to be made in Russia. So are there price controls? If that’s what is happening, then next year will definately be worse.
After some time spent googling it seems Russia even before this had a high export tarrif on grain. As Smiling Dave says this is terrible in the long term because it de-incentivises investment into grain production. Which is doubly bad in Russia since this would be one of the areas where it should have a comparative advantage.