Stung by complaints over the rapidly escalating price of foods in Russia, President Putin has issued edicts in an attempt to reduce prices and salvage the questionable popularity of his autocratic regime. Food prices rose 6.5 percent in June 2021 from the corresponding month in 2020. Various measures introduced include an export tax on wheat and placing price controls on foods. The action has resulted in complaints from the agricultural sector and the inevitability of unintended consequences.

Generally when governments under pressure impose price controls, a cheap food policy degenerates into a no-food policy and is accompanied by black market trading.  The most recent example of ham-handed attempts at manipulating the relationship between supply and demand was the response of the Government of the Philippines to a shortage of pork caused by an outbreak of African Swine Fever.  The government retained a heavy import duty on imported pork and attempted to cap the domestic price.  Pork disappeared from the market creating artificial shortages for consumers until the duty was rescinded. Similar situations have occurred in Zimbabwe, Venezuela and innumerable nations where government intervention, usually prior to an election, has resulted in disruption of the supply chain with shortages of essentials. 

Food inflation in the Russian Federation

Russia has experienced a sharp reduction in purchases of wheat following imposition of the tax generating a competitive benefit for other producers including neighboring Ukraine.