Publication: A State Trading Enterprise for Grains in Russia? Issues and Options
Loading...
Published
2009-10
ISSN
Date
2014-07-17
Author(s)
Editor(s)
Abstract
The impact of state trading enterprises (STEs) on domestic and international grain markets has been studied extensively over the years, generating a considerable body of theoretical and empirical evidence. The aim of this note is to draw on this body of evidence to analyze possible options for Russia's future state involvement in grain trade. The note covers the following three parts: i) outline of the potential economic impacts of STEs in grain trade from an economic perspective; ii) review of some of the global experience with STEs that are involved in grain exports; and iii) evaluation of options for state involvement in grain trade in Russia. The coverage in this note is limited to grains and to the impacts of STEs in countries that are net exporters of grain. Of the major grains, the note focuses on wheat which is by far the most important Russian export grain. Importing STEs are much more numerous than exporting STEs worldwide. However, unlike Ukraine, which has jumped between net export and net import situations for wheat as recently as 2003/04, it appears that Russia has become a consistent exporter since the beginning of this decade, even in years with relatively poor crop conditions. The note is further limited to the analysis of STEs and not grain market regulation in general (i.e. market and price support, income support for grain producers). However, as is discussed, such regulation can be used to help an STE pursue certain objectives by enhancing its market power, and STEs are generally implemented as part of an overall grain market regulation strategy.
Link to Data Set
Citation
“World Bank. 2009. A State Trading Enterprise for Grains in Russia? Issues and Options. © http://hdl.handle.net/10986/18899 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication A Conceptual Model of Incomplete Markets and the Consequences for Technology Adoption Policies in Ethiopia(World Bank, Washington, DC, 2013-10)In Africa, farmers have been reluctant to take up new varieties of staple crops developed to boost smallholder yields and rural incomes. Low fertilizer use is often mentioned as a proximate cause, but some believe the problem originates with incomplete input markets. As a remedy, African governments have introduced technology adoption programs with fertilizer subsidies as a core component. Still, the links between market performance and choices about using fertilizer are poorly articulated in empirical studies and policy discussions, making it difficult to judge whether the programs are expected to generate lasting benefits or to simply offset high fertilizer prices. This paper develops a conceptual model to show how choices made by agents supplying input services combine with household livelihood settings to generate heterogeneous decisions about fertilizer use. An applied model is estimated with data from a panel survey in rural Ethiopia. The results suggest that adverse market conditions limit the adoption of fertilizer-based technologies, especially among resource-poor households. Farmers appear to respond to market signals in the aggregate and this provides a pathway for subsidies to stimulate demand. However, the research suggests that lowering transaction costs, through investments in infrastructure and market institutions, can generate deeper effects by expanding the technologies available to farmers across all pricing outcomes.Publication Inequality and Poverty Impacts of Trade Distortions in Mozambique(World Bank, Washington, DC, 2009-06)Although Mozambique has considerable agricultural potential, rural poverty remains extremely high. This paper examines the extent to which global and domestic price distortions affect agricultural production and national poverty. The author develops a computable general equilibrium (CGE) and micro-simulation model of Mozambique that is linked to the results of a global model. This framework is used to examine the effects of eliminating global and national price distortions. Model results indicate that agriculture is adversely affected by current trade distortions due to policies in the rest of the world. While a removal of all merchandise trade distortions will reduce import prices, it will also raise agricultural production and reduce poverty. By contrast, removing only agricultural price distortions abroad will have little effect on Mozambique's agricultural sector. Model results indicate that Mozambique's own distortions are also biased against agriculture, with producers of processed agricultural products enjoying high protection levels. Removing these distortions causes a significant expansion of agricultural Gross Domestic Product (GDP) and a reduction in both poverty and inequality. The findings therefore suggest that removing own-country and rest-of-world distortions will have positive implications for agriculture and for the overall economy in Mozambique, and in particular it will reduce its poverty and inequality.Publication Ukraine Agricultural Competitiveness(Washington, DC, 2008-06)The agri-food sector is an important part of the Ukrainian economy. Agriculture could make an even larger contribution to economic growth and the vitality of rural areas in Ukraine than is currently the case. Ukraine has the agro-climatic potential to be a major player on world agricultural markets. Agricultural competitiveness in Ukraine also suffers from inadequate systems to test and document food product quality and food safety. Ukraine's food safety control system is complicated and characterized by fragmented and often overlapping jurisdictions. Many standards applied in Ukraine are inconsistent with World Trade Organization (WTO) provisions, with standards established by the responsible international bodies and with accepted practices in international trade. Without improvements towards an efficient and internationally recognized food quality and safety control system, Ukrainian agriculture will find it increasingly difficult to sell into international markets and its products will not be able to command top prices. The ban on Ukrainian meat, eggs, fish, cheese, milk and butter imposed by Russia in mid-January 2006 provides an example of the disruptions that can result. This negative impact on competitiveness will be increasingly acute for more perishable products, higher-processed products and products that combine different agricultural raw materials - in other words many high-value added products. Policy reforms and investments could greatly increase the competitiveness of Ukrainian agriculture. In the policy sphere, greater restraint should be exercised in the area of trade, market and price policy. Ad hoc intervention on agricultural markets should be reduced. Accession to the WTO is an important and encouraging signal that policy makers are willing to adopt less intrusive and more stable trade, market and price policies. In the investment sphere, priorities include food safety monitoring and certification systems, trade infrastructure and logistic capacity, food chain management, technical advisory and market information systems, streamlined and transparent customs procedures, land markets, and research and education institutions.Publication Higher Fuel and Food Prices : Impacts and Responses for Mozambique(Washington, DC, 2008-12)The dramatic increases in world food and fuel prices during 2007 and early 2008 may set back Mozambique's considerable advances in poverty reduction during the past decade. This study assesses the impact of higher fuel and food prices at both household and macroeconomic levels, and also considers policy options to mitigate some of the negative impacts of higher prices. Rising world prices certainly represents a negative terms-of-trade shock for Mozambique, since the country imports almost all of its fuel and is a net importer of food. The report is structured in six sections. Section two presents information on the extent of international food and fuel price increases and their transmission to local markets in Mozambique. Section three presents household-level analysis focused on the first order impact of the food price increases. Section four complements previous sections by examining the impact of higher food and fuel prices within a general equilibrium framework. Section five discusses the likely impact of alternative policy options in the short and long term. Section six summarizes and concludes.Publication Export Restraints on Russian Natural Gas and Raw Timber : What Are the Economic Impacts?(World Bank, Washington, DC, 2010-01)Export restraints by the Russian Federation on natural gas and timber have been the source of major controversy between the European Union and the Russian Federation. The analysis of this paper suggests that the export restraints in natural gas very substantially benefit Russia. On the other hand, in raw timber the analysis suggests that a substantial reduction of Russian export taxes would increase Russian welfare. The paper explains that Gazprom has failed to invest adequately, resulting in little development of new gas supplies. The result has been progressively increasing use by Gazprom of Central Asian gas supplies, at progressively higher prices for Russia. The increased prices of gas for Russian consumers have shown that it is crucial for Russia to allow new entrants and to introduce competition in the Russian domestic market. Without export restraints, however, competition among multiple gas suppliers from Russia would erode or eliminate the monopoly profits of the Russian Federation on gas exports. Thus, with a more competitive domestic market, the Russian government would be expected to grant exclusive exporting rights to a single entity (as it presently does with Gazprom) or impose export taxes. Thus, Europe should not expect to achieve cheaper Russian gas as a result of structural reforms within the Russian gas market. A more promising avenue for European energy diversification is new pipeline construction to open up new sources of supply independent of Russia (especially the Nabucco pipeline), and liquefied natural gas purchases.
Users also downloaded
Showing related downloaded files
Publication Mobilizing the Middle East and North Africa Diaspora for Economic Integration and Entrepreneurship(World Bank, Washington, DC, 2016-12)This paper advocates for the need to rally the MENA professional and skilled diaspora. It discusses the findings of a unique outreach exercise to the MENA diaspora and provides policy recommendations. First, the paper highlights the linkages between the diaspora and trade, investment, and knowledge transfer based on the literature and concrete examples. Second, it describes the outreach and the profile of the diaspora members surveyed. Third, it presents the main findings of the survey of the MENA diaspora in four areas: (i) overall engagement, (ii) appetite for investment, (iii) trade, and (iv) the role of institutions. The paper concludes with policy recommendations.Publication Financial Sector Assessment Program Update(World Bank, Washington, DC, 2020-05-01)The Credit Union (CU) sector is concentrated and has a significant number (129) of institutions. CU sector’s loan portfolio is concentrated mainly in consumer loans. The prudential and market conduct situation of the CU sector present weaknesses. The legal framework for CUs is outdated (from 1971) and has significant limitations for an appropriate prudential regulation and supervision of the sector. A new legal framework for the regulation and supervision of CUs should be developed urgently.Publication Regional Poverty and Inequality Update: Latin America and the Caribbean, October 2025(Washington, DC: World Bank, 2025-10-23)This brief summarizes recent facts related to poverty and inequality in Latin America and the Caribbean (LAC) using the latest wave of harmonized household surveys from the Socio-Economic Database for LAC (SEDLAC). This brief was produced by the Poverty Global Practice in the LAC Region of the World Bank.Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.