Tag: Producer surplus

Beyond North Africa: Ukraine’s Agricultural Engagements with Sub-Saharan Partners

Posted on June 12, 2025 | Policy Brief

Farmworkers harvesting leafy vegetables in a lush green field with mountains in the background, illustrating hands-on labor central to Ukraine's agricultural engagements.

In recent years, the global agricultural landscape has shifted dramatically, shaped by the intersecting crises of climate change, food insecurity, geopolitical tensions, and technological disruption. Against this backdrop, Ukraine and Sub-Saharan Africa have emerged as two regions uniquely positioned to build a complementary partnership in the agri-food sector – one that not only addresses immediate humanitarian and trade challenges but also lays the groundwork for long-term sustainable development. As Ukraine looks to diversify its agricultural partnerships beyond traditional European and Asian markets, Ukraine’s agricultural engagements with Africa offer both a growing consumer base and an investment frontier where Ukraine’s expertise and surplus production capacity can meet critical demand. This policy brief explores how Ukraine’s agricultural engagements with certain African countries can deepen cooperation across the agricultural value chain. Drawing on in-depth regional analyses conducted by the Kyiv School of Economics Agrocenter (Martyshev, Stolnikovych & Piddubnyi, 2024a–d), the discussion considers strategic sectors, regional particularities, and policy innovations essential for a robust and mutually beneficial partnership.

Ukraine Agricultural Engagements with Africa: Opportunities for Growth and Partnership

Ukraine is one of the world’s most productive agricultural exporters, supplying significant volumes of wheat, corn, sunflower oil, and other essential staples. Africa, by contrast, is grappling with an array of food production and security challenges. In many regions, agricultural productivity remains stubbornly low, constrained by underinvestment, poor infrastructure, limited irrigation, climate volatility, and outdated farming techniques. Yet, Africa’s demographic trends suggest a rapidly growing demand for food. Urbanization is accelerating, dietary preferences are shifting, and consumers are increasingly looking beyond subsistence crops toward diversified and processed foods. These dynamics set the stage for Ukraine to serve not just as a food exporter, but also as a strategic partner in Africa’s agricultural transformation.

In a series of recent regional reports by the Kyiv School of Economics Agrocenter, all titled Cooperation Between Ukraine and African Countries in Agriculture, (Martyshev, Stolnikovych & Piddubnyi, 2024a,b,c,d), the Kyiv School of Economics (KSE) explored the mutually beneficial opportunities for collaboration between Ukraine and Africa in the agricultural sector. The full reports covering Central, East, Southern, and West Africa are available at https://agrocenter.kse.ua. This brief summarizes the key findings and insights drawn from those reports.

Data and Methods

A standardized analytical framework across four African regions, Central, East, Southern, and West Africa, focusing on three major countries in each region, was applied. The objective was to, through data-drive insights, assess the potential for agricultural cooperation with Ukraine in food security, trade, production systems, and policy environments.

  • Food security analysis relies on indicators from FAOSTAT and the World Bank, including prevalence of undernourishment, dietary energy adequacy, and trends in malnutrition from 2000 to 2022.
  • Trade analysis uses data from UN Comtrade, ITC Trade Map, Ukrainian customs, and national sources to evaluate import-export flows, Ukraine’s market share, and commodity dependencies, particularly in cereals and vegetable oils.
  • Agricultural sector profiling includes employment, GDP contribution, key crop and livestock outputs, and irrigation coverage. Data are drawn from FAOSTAT, national agricultural statistics, and World Development Indicators.
  • Infrastructure and technology assessments are based on literature reviews and secondary sources evaluating the state of storage, logistics, irrigation, and mechanization. Attention is given to adoption of modern tools like drones and ICT platforms.
  • Policy and institutional reviews focus on national agricultural strategies, trade policies, food security programs, and land tenure systems, using official government documents and donor evaluations.
  • For East and West Africa, findings were also informed by stakeholder input from KSE Agrocenter webinars held in 2024, involving local policymakers, researchers, and trade representatives.

This mixed-methods approach enabled a comparative, region-specific understanding of agri-food challenges and opportunities relevant to Ukraine’s engagement in Africa.

Empirical Findings and Policy Recommendations

Trade: A Nascent but Promising Relationship

The trade relationship between Ukraine and Africa, while still developing, shows considerable potential. Based on empirical trade flow data, Ukraine’s primary exports to Africa include cereals like wheat and corn, along with vegetable oils. Imports from Africa, however, are minimal, revealing the one-sided nature of current trade. This asymmetry is due to limited diversification, logistical barriers, and underdeveloped bilateral trade frameworks. Trade activity is concentrated in North and West Africa, while countries in Central, Eastern and Southern Africa receive fewer Ukrainian goods. Engagement with regional trade blocs such as the Economic Community of West African States (ECOWAS) and the East African Community (EAC) presents both regulatory hurdles and strategic entry points.

Based on observed trade gaps, the policy recommendation is to expand Ukraine’s access to African markets by negotiating preferential trade agreements and eliminating non-tariff barriers. Appointing agrarian attachés in African capitals can facilitate market entry, monitor regional regulations, and promote Ukrainian products in regional fairs and business forums.

Joint Investment Opportunities

Based on field-level evidence and investment data, agriculture in Central and East Africa is constrained by severe infrastructure deficits. Post-harvest losses, driven by the absence of proper storage, cold chains, and road networks, are estimated to cost billions in lost output annually. The strategic proposal is for Ukraine to co-invest in building post-harvest systems, leveraging its expertise in grain storage and export logistics. Ukrainian firms could collaborate with African partners on silos, warehouses, and cold storage tailored to tropical climates.

Food processing also represents a high-potential area. Many East African countries impose protective tariffs on processed food imports to stimulate local industry. Based on these findings, the policy recommendation is for Ukraine to establish agro-processing joint ventures that align with local industrial policies. These ventures would stimulate employment, reduce food imports, and strengthen Ukraine’s position in value-added agriculture abroad.

Technology Transfer Potential

Empirical assessments reveal that low mechanization, climate volatility, and limited access to agri-tech remain persistent barriers to productivity in much of sub-Saharan Africa. Ukraine, with its advanced capabilities in precision agriculture, can provide high-impact technologies such as satellite-based soil monitoring, drones for crop surveillance, and automated irrigation systems. For example, in parts of Southern Africa like Zambia and Namibia, where rainfall is unpredictable, these technologies can help stabilize crop yields and reduce risk for smallholder farmers.

The strategic proposal is for Ukrainian firms to develop demonstration farms and pilot projects that showcase these innovations. Based on successful models from Eastern Europe, these pilots could serve as training grounds for local agronomists and as proof-of-concept for scalable investment.

Regional Variability and Context-Specific Cooperation

Central Africa (e.g., the Democratic Republic of the Congo (DRC), Angola, Cameroon)

Based on food security metrics, Central Africa faces some of the highest levels of undernourishment on the continent. In DRC for example, more than one-third of the population is chronically underfed. Political instability and unclear land rights further hinder agricultural investment.

The strategic recommendation is to continue and scale humanitarian programs like “Grain from Ukraine,” while also offering technical support in veterinary services for cattle and poultry sectors, particularly in Angola and Cameroon. Ukrainian expertise in land reform and extension services could also help unlock investment in rural farming.

East Africa (e.g., Ethiopia, Kenya, Tanzania)

Agricultural productivity is improving in East Africa, but gaps remain. Based on infrastructure and yield data, the region struggles with limited access to farm machinery, irrigation systems, and post-harvest technology. The policy recommendation is to focus on joint research, agricultural education, and training programs that address these specific bottlenecks. Ukrainian institutions could work with African universities to design curricula on crop science, data-driven farming, and agri-business entrepreneurship. Mobile extension services and remote learning platforms could further boost rural outreach.

Southern Africa (e.g., South Africa, Botswana, Namibia)

This region has a more developed agricultural sector with export orientation and mechanization. However, environmental and political factors, such as energy shortages and water scarcity, threaten sustainability. Based on these empirical conditions, the strategic proposal is for Ukraine to engage through agri-consulting and technology partnerships. High-value inputs like hybrid seeds and automated irrigation systems can address local constraints, while cooperation on renewable energy solutions for farming could provide long-term stability.

West Africa (e.g., Nigeria, Ghana, Côte d’Ivoire)

According to population and consumption data, West Africa faces mounting pressure on food systems. Despite improving domestic output, infrastructure deficits and policy inconsistency limit food availability. Based on these findings, the strategic recommendation is to invest in logistics infrastructure, such as road and rail links to key ports and warehouses, as well as to diversify the region’s agricultural base. Ukrainian seed companies could introduce crops like barley and legumes, adapted to regional climates, to reduce dependence on cocoa and palm oil.

Conclusion

In conclusion, the partnership between Ukraine and Sub-Saharan Africa in the agricultural sector is not merely a matter of commerce; it is a strategic opportunity with tangible benefits for both sides. Ukraine, as a breadbasket with advanced agri-tech capabilities, can play a pivotal role in enhancing food systems in parts of Africa where food insecurity remains acute, particularly in regions such as the Horn of Africa (e.g., Somalia and Ethiopia), the Sahel (e.g., Niger and Mali) and Central Africa (e.g., the Democratic Republic of the Congo). At the same time, many African nations offer Ukraine access to growing consumer markets, underutilized arable land, and increasing geopolitical relevance in a rapidly evolving global landscape.

To realize this vision, both sides must commit to a comprehensive, long-term strategy built on trust, transparency, and mutual benefit. The road ahead is complex but filled with promise. With smart investments, targeted diplomacy, and collaborative innovation, Ukraine and Africa can co-author a new chapter in global agriculture, one defined not by scarcity and dependency, but by resilience, growth, and shared prosperity.

References

Central Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024a). Cooperation between Ukraine and African countries in agriculture: Central Africa. Center for Food and Land Use Research at Kyiv School of Economics.
  • Abia, W. A., Shum, C. E., Fomboh, R. N., Ntungwe, E., & Ageh, M. T. (2016). Agriculture in Cameroon: Proposed Strategies to Sustain Productivity. International Journal for Research in Agricultural Research, 2(2), 1–14.
  • Africa24. (2024, January 25). Cameroon reduces state fees for agricultural enterprises by 92%.
  • African Development Bank. (2022). Cameroon – Agricultural Production Support Program (PARPAC).
  • African Development Bank. (2023). Angola – Agriculture Sector Reform Program (ASRP).
  • African Development Bank. (2024). African Economic Outlook 2024: Driving Africa’s Transformation.
  • Arsene, M. B., & Mwine Fyama, J. N. (2021). Potential threats to agricultural food production and farmers’ coping strategies in the marshlands of Kabare in the Democratic Republic of Congo. Cogent Food & Agriculture, 7(1), 1933747.
  • Binswanger-Mkhize, H. P. (2008). Empowering Rural People for Their Own Development. FAO.
  • Boko, M. I., Niang, A., Nyong, C., et al. (2007). Africa Climate Change: Impacts, Adaptation and Vulnerability. IPCC, Fourth Assessment Report.
  • CAADP. (2013). Agriculture Investment Opportunities Brief: CAADP Investment Facilitation Programme – DRC.

East Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024b). Cooperation between Ukraine and African countries in agriculture: East Africa. Center for Food and Land Use Research at Kyiv School of Economics.
  • Achandi, E., Mujawamariya, G., Agboh-Noameshie, A., et al. (2018). Women’s access to agricultural technologies in rice production and processing hubs: A comparative analysis. Journal of Rural Studies, 60, 188–198.
  • African Development Bank. (2024). African Economic Outlook 2024.
  • Ayenew, M., & Arquitt, S. (2018). Kenya Agricultural Performance and Targets. CCGA Policy Brief No. 2.
  • Bekabil, U. T. (2014). Review of challenges in Ethiopia. Journal of Natural Sciences Research, 4(18), 70–77.
  • Casaburi, L., Kremer, M., & Mullainathan, S. (2016). Contract farming and agricultural productivity in Western Kenya. In S. Edwards et al. (Eds.), African Successes, Vol IV. University of Chicago Press.
  • Charles, G., Jeppesen, S., Kamau, P., & Kragelund, P. (2016). Food-processing sector study. Forum for Development Studies, 44(1), 109–131.
  • FAO. (2015–2016). AQUASTAT Country Profiles – Kenya, Ethiopia, Tanzania.
  • Government of Kenya. (2007). Kenya Vision 2030.
  • Government of Tanzania. (2015). Agricultural Sector Development Strategy II (ASDS II).
  • Kashindi, G. (2020). Local agricultural production in Kenya. KAS African Law Study Library, 7.
  • Laichena, J., Kiptoo, E., et al. (2022). Kenya agricultural policy profile. IWMI/CGIAR.

Southern Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024c). Cooperation between Ukraine and African countries in agriculture: South Africa. Center for Food and Land Use Research at Kyiv School of Economics.
  • Acquah, B. K. (2004). In Shaping the Future of African Agriculture for Development. AAAE.
  • AgriSA. (2024). Key Issues for South African Agriculture.
  • Bank of Namibia. (2017). Feeding Namibia: Agricultural Productivity and Industrialisation.
  • Commission on Restitution of Land Rights. (2021). Strategic Plan 2021–2024.
  • Department of Agriculture, Land Reform and Rural Development. (2022, 2024). Agriculture and Agro-Processing Master Plan; State Land Lease and Disposal Policy.
  • Department of Rural Development and Land Reform. (2013). NARYSEC Booklet.
  • Financial and Fiscal Commission. (2021). Strategic Plan 2020–2025.
  • Fortunato, A., & Enciso, S. (2023). Food for Growth: Namibia’s Agriculture Sector. Harvard Growth Lab.
  • Giesel, C. (2023). Agriculture Challenges in South Africa. Bizcommunity.
  • GIZ. (2020). Sector Brief: Namibia Agriculture.
  • Government of Namibia. (2004–2017). Vision 2030, Agriculture Policy, Development Plans, and Cooperative Policy.
  • Namibia Statistics Agency & UNICEF. (2021). Multidimensional Poverty Index Report.

West Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024d). Cooperation between Ukraine and African countries in agriculture: West Africa. Center for Food and Land Use Research at Kyiv School of Economics, https://kse.ua/wp-content/uploads/2024/06/COOPERATION-BETWEEN-UKRAINE-AND-AFRICAN-COUNTRIES-IN-AGRICULTURE-WEST-AFRICA-.pdf
  • Banson, K., Nguyen, N., & Bosch, O. (2014, 2015). Systems Research and Behavioral Science.
  • Diallo, S., Fofana, I., & Diallo, M. (2020). AGRODEP Working Paper 0041. IFPRI.
  • FAO. (2005–2016). AQUASTAT Country Profiles – Ghana, Nigeria, Côte d’Ivoire.
  • FAOSTAT. (2023). Food, Beverages and Tobacco Data.
  • FMARD. (2022). National Rice Development Strategy II (2020–2030).
  • Ghana Business News. (2009). The Challenge of Agriculture in Ghana.
  • Jalloh, A., Nelson, G., Thomas, T., et al. (2013). West African Agriculture and Climate Change. IFPRI Monograph.
  • JICA. (2023). Côte d’Ivoire Country Analysis Paper (JCAP).
  • King, C. (2008). Community resilience in agri-ecological systems. Systems Research and Behavioral Science, 25(1), 111.
  • Kouassi, J-L., Gyau, A., et al. (2021). Land, 10(4), 429.
  • NEPAD. (2003). Maputo Declaration on Agriculture and Food Security.
  • Nitag Consults Ltd. (2009). Agricultural Development Review.
  • Olukunle, O. (2013). Challenges and Prospects of Agriculture in Nigeria. Journal of Economics and Sustainable Development, 4(16).
  • USDA. (2023). Nigeria Grain and Feed Update (GAIN Report NI2023-0008).

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Losers and Winners of Russian Countersanctions: A welfare analysis

Posted on October 1, 2018 | Policy Brief

20181001 Losers and Winners of Russian Countersanctions Image 01

In this brief we provide a quantitative assessment of the consequences of countersanctions introduced by the Russian government in 2014 in response to sectoral restrictive measures initiated by a number of developed countries. Commodity groups that fell under countersanctions included meat, fish, dairy products, fruit and vegetables.  By applying a basic partial equilibrium analysis to data from several sources, including Rosstat, Euromonitor, UN Comtrade, industry reviews etc., we obtain that total consumers’ loss due to countersanctions amounts to 288 bn Rub or 2000 rubles per year for each Russian citizen. Producers capture 63% of this amount, importers 26%, while deadweight loss amounts to 10%. 30% of the transfer from Russian consumers toward importers was acquired by Belarus. The gain of Belarusian importers of cheese is especially impressive – 83% of total importer’s gains on the cheese market.

In August 2014, in response to sectoral sanctions initiated by some countries against Russia, the national government issued resolution No. 778, which prohibited import of processed and raw agricultural products from the United States, the EU, Ukraine and a number of other countries (Norway, Canada, Australia, etc.).

Russian countersanctions were, in particular, imposed on meat, fish, dairy products, fruit and vegetables. Later the list of counter sanctioned goods was edited: inputs for the production of baby food and medicines have been deleted from the ban list, while new items were added. Salt was added to the list in November 2016 and animal fats in October 2017.

The popular idea behind the countersanctions was to limit market access for countries, which supported sectoral sanctions. The other rhetoric of the countersanctions was to support domestic producers via trade restrictions, or by other words – import substitution.

We apply a basic partial equilibrium analysis in order to evaluate the effect of countersanctions on the welfare of main stakeholders – consumers, producers and importers. The overall results are in line with general microeconomic consequences of trade restrictions in a small open economy, that is, we observe a decline in consumer surplus, increase in producer surplus and redistribution across importers. Perhaps, even more interestingly, we are able to provide a numerical assessment of redistribution effects between Russian consumers and producers, on the one hand, and among importers from different countries, on the other.

Partial equilibrium welfare analysis

We apply a framework of the classical analysis of import tariff increases to Russian countersanctions. Countersanctions resulted in increased domestic prices, declining consumption and increased domestic production. Given the increase in prices and declined volumes of consumption, we evaluate the losses by consumers as a decline in consumer surplus. Respectively, given the increase in prices and increase in domestic output we identify the producers gains as an increase in producer surplus. The only difference with a classical analysis is the lack of increase in government revenues. In this case increases in domestic prices were driven by restrictions on trade with historical partners which were substituted by more costly producers. Given the changes in the composition of importers after sanctions, we identify countries which lost and gained access to the Russian market. We use changes in volumes of trade as a measure of respective gains and losses. Figure 1 presents all relevant concepts.

In order to measure all relevant welfare changes, we rely on consumption, production and price data from Rosstat and Euromonitor, trade data from the UN Comtrade database. We use data for 2013 as a benchmark before countersanctions and compare it to 2016. The measures of own price elasticities of Russian demand and supply were taken from the literature. We use real price (in terms of 2013 prices) and volume information for consumption and supply in 2016 as the resulting points on the supply (point C) and demand (point A) curves as shown on Figure 1. Then we restore the consumption and production points on these curves (points F and B) as they would have been in 2013 given the own price elasticities of demand and supply and price level as of 2013.

Figure 1. Visualization of deadweight losses, consumer and producer surplus changes

Welfare analysis

Data

We consider 12 commodity groups that were included in 2014 in the countersanctions list: pork, cheese, poultry, apples, beef, tomatoes, processed meat, fromage frais, butter, oranges, condensed milk, grapes, cream, sour milk products, milk, and bananas.

Prices and volumes information are taken from Rosstat official statistics, which in a few cases were adjusted by data from Euromonitor. Import values were obtained from the UN Comtrade database. The summary of the original data and results of welfare analyses are reported in table 1. Below we discuss in details the situation in three markets – beef, apples and cheese.

Table 1. Summary table of the welfare effects of countersanctions

Group Price (RUR per kg, 2013) Production (thous. tons) Consumption (thous. tons) Elasticity Consumer losses, RUR mn Producer surplus, RUR mn Deadweight loss, RUR mn Importer gains, RUR mn
2016 2013 2016 2013 2016 2013 demand supply
Beef 376 357 238 240 600 897 -0.78 0.1 11311 4388 234 6690
Poultry 109 108 4468 3610 4577 4084 -0.78 0.45 3263 3173 13 77
Pork 286 289 2042 1299 2282 1919 -0.78 0.2 -7167 -6447 38 -757
Milk 55 47 5540 5386 5704 5595 -0.93 0.3 48234 42507 4443 1284
Butter 343 271 251 225 340 340 -0.93 0.18 27468 17680 3370 6419
Cheese 358 283 605 435 748 764 -0.93 0.28 63493 44259 8437 10797
Fromage frais 233 190 407 371 456 457 -0.93 0.3 21803 17104 2600 2099
Apples 84 70 324 313 986 1665 -0.85 0.1 15225 4562 1238 9425
Bananas 61 47 0 0 1141 1165 -0.9 0.1 18967 0 2315 16652
Oranges 65 59 0 0 932 1059 -0.9 0.1 6054 0 272 5782
Grapes 175 131 174 101 366 459 -0.85 0.1 18312 7527 2351 8435
Tomatoes 82 65 1130 863 1583 1718 -0.97 0.1 28824 18177 3290 7357

Data sources: Rosstat, Euromonitor, UN COMTRADE

Bold figures were used to mark the commodity groups with a noticeable consumption growth in 2013-2016, italic figures – for those with consumption decrease, and underlined – for groups where consumption changed insignificantly during the period.

Beef

The Russian beef market experienced a drastic decrease in consumption during two years under countersanctions.  In 2013 constant prices, the average real of 1 kg of beef increased by 5.3% from 357 Rub/kg in 2013 up to 376 Rub/kg in 2016. Domestic output decreased by 0.8% and to 238 thousand tons in 2016 from 240 in 2013. Domestic consumption decreased by 33.1% to 600 thousand tons in 2016 from 897 in 2013. Our estimations indicate that  consumer losses amount to  11.3 bn Rub or 3.5% of beef consumption in 2013; producers’ gains are 4.4 bn Rub or 1.4%; deadweight losses are estimated at 0.2 bn Rub or 0.07%; and importers’ gains equal 6.7 bn Rub or 2.1%.

Out of total 6.7 bn Rub of importers’ gains, importers from Belarus acquire the major share (88%) – 5.9 bn Rub. Importers of beef from India and Colombia gained 0.4 bn Rub (6% of total) and 0.3 bn Rub (5%) respectively. Beef importers from Mongolia gained 0.03 bn Rub, from Kazakhstan – 0.01 bn Rub. Importers of beef from Brazil, Paraguay, Australia, Uruguay, Ukraine, Lithuania, Poland, and Argentina lost market shares in over the period 2013-2016.

Cheese

Average real price for 1 kg of cheese increased by 26.5% up to 358 Rub/kg in 2016 from 283 Rub/kg in 2013, both in constant 2013 prices. Domestic output increased by 39.1%  to 605 thousand tons in 2016 from 435 thous. tons in 2013. Domestic consumption decreased by 2.1% to 748 thous. tons in 2016 from 764 thous. tons in 2013. Our results indicate the following effects of countersanctions on cheese market: consumers’ losses amounted to 63.5 bn Rub or 29.4% of cheese consumption in 2013; producer’s gain is 44.3 bn Rub or 20.5%; deadweight loss is estimated at 8.4 bn Rub or 3.9%; importers’ gains equal 10.8 bn Rub or 5.0%.

Out of a total 10.8 bn Rub of importer’s gains on the cheese market, importers of cheese from Belarus acquired the major share (82.9%) – 9.0 bln Rub, importers of cheese from Argentina gained 0.5 bn Rub (4.8% of total importers’ gain), importers from Uruguay gained 0.4 bn Rub (3.9%), Swiss cheese importers gained 0.2 bn Rub, importers from Armenia – 0.2 bn Rub (1.8%). While importers of cheese from Ukraine, the Netherlands, Germany, Finland, Poland, Lithuania, France, Denmark, Italy, and Estonia lost market access over 2013-2016.

Apples

In 2013 constant prices, average real price for 1 kg of apples increased by 20.0%  up to  84 Rub/kg in 2016 from 70 Rub/kg in 2013. Domestic output increased by 3.5% to 324 thous. tons in 2016 from 313 thous. tons in 2013. Domestic consumption decreased by 40.8% to 986 thous. tons in 2016 from 1665 thous. tons in 2013. According to our analysis, the  effects of countersanctions on the apple market are the following: consumers’ losses amounted to 15.2 bn Rub or 13.1 of apple consumption in 2013; producer’s gain is 4.6 bn Rub or 3.0%; deadweight loss is estimated at  1.2  bn Rub or 1.1%; importers’ gains equal 9.4  bln Rub or 8.1%.

Out of a total 9.4 bn Rub of importer’s gains, importers from Serbia acquired the major share (49.7%) – 4,7 bn Rub, importers of apples from China gained 1.6 bn Rub (16.7% of total importers’ gains), those importing from Macedonia gained 0.8 bn Rub (8.4%), from Azerbaijan 0.6 bn Rub (6.0%), and from South Africa 0.4 bn Rub (4.5% of total importers’ gains). While importers of apples from Poland, Italy, Belgium, and France lost market access.

Overall effects for 12 commodity groups

We calculated the welfare effects for 12 commodity groups: beef, poultry, milk, cheese, cottage cheese, ton butter, dairy products, apples, bananas, oranges, grapes and tomatoes.

Total consumers’ loss due to countersanctions amounts to 288 bn Rub, producers gain 63% out of this amount (182 bn Rub), 26% of total consumers’ loss is redistributed to importers (75 bn Rub), deadweight losses amount to 10% (31 bn Rub).

Distribution of importers’ gains

Belarus is the major beneficiary of Russians countersanctions: its exporters gain 29.4 bn Rub (38%), Ecuador’s exporters are in the second place with 16.4 bln Rub (21). Exporters from Serbia gained 5.1 bn Rub (7%).

Conclusion

There is no doubt that countersanctions were paid out of the pockets of Russian consumers: our estimation of total consumer losses amounts to 288 billion rubles, i.e. each Russian citizen paid 2000 rubles per year.  Out of this sum, Russian producers received 144 billion rubles, i.e. transfer from Russian consumers to producers equals 1260 rubles per person per year. Among Russian sectors, major gains and associated increases in production happened in pork industries (50%), poultry (20%), dairy products (10-30%), fruit and vegetables (10-50%).

The transfer from Russian consumers toward importers from non-sanctioned countries equals 75 billion rubles a year (520 rubles per person per year), out of which 30% was acquired by Belarusian importers. Countersanctions lead to deadweight losses in the efficiency of Russian economy equal to 31 billion rubles or 215 rubles per person per year.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.