Keith Woodford discusses why understanding Russia can be important to our New Zealand agrifood industries

By Keith Woodford*

The issue of whether Russia belongs in the West or the East might seem a strange topic for a New Zealand agri-food systems person like me to be discussing. However, political and food systems, and the associated international trade, are joined at the hip. Politics and agricultural trade are always fellow travellers.

These last two weeks, while working in Russia, I have pondered as to where Russia belongs. From a cultural perspective, I have no doubt it is in the West. Yet from a geopolitical perspective it would seem that Russia’s future is more with China in the East. Here, I explore the dichotomy and the contradiction.

The two centres of Russia’s culture and history are Moscow and St Petersburg. Both cities are very European. Both cities have firmly left their Soviet past behind them. Both cities have re-embraced their cultural identity from earlier centuries.

The churches destroyed by Stalin’s vandalism have been painstakingly restored, and even Mr Putin aligns himself with the Russian Orthodox Church and its values. I see many people, both old and young, going into the churches to pray. Soviet-style communism and the fundamental concept of the Soviet Union are now seen as a mistake.

Remarkably, both Moscow and St Petersburg have escaped the ravages of war. Their enemies have tried, but only the Russians know how to fight and win a war on their own territory. And so, both cities still depict the architecture of the 18th and 19th centuries, albeit with also many modern buildings, particularly in Moscow.

This morning, over breakfast in St Petersburg, I listened on the restaurant audio system, first to some American jazz, and then a Russian singer presenting a beautiful accented version of George Harrison’s song about his guitar that gently weeps. I have also been listening to Michael Jackson and Elton John. Yes, the dominant Russian culture comes from the West.

However, the geopolitics of Russia tell a different story. The West does not like Russia, and that is deeply rooted in history. The Cold War is once again in play, for reasons that the Russians find hard to comprehend.

Given Western hostility, including sanctions, then Russia has little option but to find friends elsewhere. And the pathway leads inevitably to China.

From a military perspective, Russia does not really need friends. If attacked, Russia has the technology to destroy the world. It would be crazy for the West to go there. Russia does feel threatened by American actions in both Ukraine and in the ‘Stans’, but it knows it can defend itself. 

From a Russian perspective, the current political situation in the Crimea is very simple. Crimea had been Russian territory for a long time until Mr Khrushchev gave it away to Ukraine when both Ukraine and Russia were part of the Soviet Union.

We can go right back to 1854 when the English Light Brigade, led by befuddled officers, charged up the Crimean Valley of Death to be slaughtered by Russian guns. Just what did the English think they were doing fighting the Russians so far from their English homeland?

The Russians regard Crimea not just as Russian territory – a stance that is very popular within Russia – but of critical importance in providing a warm water port for their navy. As long as Ukraine was friendly to Russia, then the Russians could live with Khrushchev’s historical actions. Once Ukraine turned away, there was only one option.

Quite simply, it does not matter what pressure the West puts on Russia over Crimea, the Russians will never step back. As for Ukraine itself, many Russians are glad they no longer have to support those pesky Ukrainians. Let someone else solve their problems!

Whereas Russia can survive all military pressures, including from America and NATO, it does need economic partners. There are many constraints to economic development, and much of Russia, away from Moscow and St Petersburg, is still very poor. That is where China comes in.

Russia and China together can form an increasingly formidable axis of economic power. Russia has plentiful oil and gas, plus the fundamental sciences, and an agriculture that is grossly under-developed.  

China has the consumers, capital and applied engineering, but lacks sufficient oil and gas, and is still struggling with producing new fundamental science that underpins technology. This Chinese science limitation stems from a schooling system that does not foster independent inquiry.

Surely, there is an irony that the West in general and the Americans in particular are by their actions pushing the Russians and the Chinese to work ever increasingly together.

The cultures of Russia and China do not naturally align, but economic necessity prevails.  It will work because both countries are smart enough to understand that they can have an economic axis without interfering in each other’s internal affairs.

In New Zealand, we have come to recognise that our economic future lies increasingly with the East. But it is an uncomfortable relationship for many, because once again our cultures do not naturally align. We also have a remarkable ability – common in the West – to tell other people as to how they should live their lives.

Somewhere in amongst all of this, it might seem that there is a logic that we might also have a future with Russia. It is hard to see how Russia could ever be our largest trading partner – that role is always going to be for China, as long as once again we don’t try and tell other people how to live their lives. But Russia can also be important as a destination for our food products.

I have previously discussed some relevant aspects of Russian agri-food and cuisine here. I may also have more to say on those specifics at a later time.

Several years ago, the prospect of a free trade agreement between New Zealand and Russia was high on our Government agenda. However, with Cold War politics coming to the fore, New Zealand decided to take a step back. 

New Zealand’s key concern in stepping back was not so much any moral imperative, but the pragmatic need to keep onside with the USA and Europe. Indeed, we trade elsewhere with some truly horrible regimes.

Surely, there is yet another irony here, accentuated by the range of European brands on show in Russia. It could be time to test the waters again.

It may not even need a formal free trade agreement which would annoy our so-called allies. It might just need a change of attitude.


*Keith Woodford was Professor of Farm Management and Agribusiness at Lincoln University for 15 years through to 2015. He is now Principal Consultant at AgriFood Systems Ltd. His articles are archived at http://keithwoodford.wordpress.com. You can contact him directly here.

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32 Comments

I have heard it said that property rights are not very well respected in Russia, and that this has dogged their economic performance since communism took hold there. Are they making any progress on this front?

Jock Silver.
I made no specific investigations but the impression I got was that property rights are now secure, at least in the cities, but probably also elsewhere.
KeithW

Keith, that's naive.

It's a corrupt country. From top to bottom.

You want someone's land? The standard method in Russia is to kidnap them, beat the crap out of them, leave them on the outskirts of town. If you don't sell/give them your land after that, next time they kill you.

Saw this on a documentary on TVNZ1 around 5 years ago. I doubt things have changed since.

Let's all listen to this dude - he's seen a documentary on the telly.

A real Sherlock Holmes right here in the comments section he is. TVNZ also said Iraq had WMDs a while back.

They have a lot of energy, compared to Saudi they are saints.

I thoroughly recommend reading Bill Browder's Red Notice. Gives great insight into the Putin regime & why he may have wanted to intervene in the US election.

I will read it if you watchThe Magnitsky Act .
https://www.youtube.com/watch?v=x6PQNFcog3s&t=900s

I will take a look Andrew. Who are you saying are saints compared to the Saudis? Surely not the Putin regime? Putin has the blood of many journalists on his hands.

For a start Russian have a orthodox church which is seeing massive resurgence, they have more in common with us than the followers of Ibn taymiyyah/ Wahhabism extremism.

Russia has elections, it's huge country and it heavily armed but I don't think it's interested in expansionist policy, I'm not so sure about China, they both have areas of interest just like the US and NATO.
I suspect the entitlement culture of the West is coming under pressure and with it our ideologies will be challenged.

https://edition.cnn.com/2017/03/30/europe/russian-orthodox-church-resurg...

Best when in Russia to do what the Russians do. Centuries on centuries of brutal rule by the Czars & when the Bolsheviks took over, same thing, different brand. Huge country, huge history but I always recall, rather fondly in fact, the lady here who waxed lyrical about the superior life style on offer in Russia, only to turn down the one way air ticket offered by Bob Jones. Russians are tough, just ask the London underworld when their Russian contempories started filtering in.

I always thought that the Crimean war was fought to stop Russian orthodoxy spreading south, taking over the crumbling Ottoman empire, where a lot of Russian people lived.
I think of Russia as both west and east, something that goes back to the Mongols.

Andrewj
Yes, and interestingly, the English sided with the crumbling Ottamans.
And incidentally, I also look for your comments, particularly on 90 seconds at 9.
KeithW

Keith, have you noticed how well they know their history? I was always fascinated to bring up the Mongols or Peter the Great, finding myself in immeshed in an hour long debate with lots of others joining in. Stalin was a sore point no one was so keen to talk about but that was over 20 years ago, i'd imagine today was different.

Some time ago I watched an interview between a noted British journalist and a senior Russian government authority who was probably, past tense. I regret I did not pay sufficient attention and nor can I identify the two participants. But there was amongst everything else an exchange wherein the journalist went heatedly and deeply into the history of the Gulags, Stalin’s era of course. That was the crowning condemnation. It struck me as strange that the Russian did not immediately riposte that the British had after all, invented the concentration camps of modern times, during the Boer war. What that sums up I think in terms of west and east, is that for this sort of history, the former forgets far too readily and the latter simply doesn’t really care about any of it.

Andrewj,
I think Stalin is now seen by all as a disgraceful despot, although grudgingly given some credit in relation to WW2. In contrast, Lenin is still recognised as an overall force for good.
KeithW

You must be joking. Ask any surviving Kulak descendant about Dekulakization. That was masterminded by Lenin fair square and center and is not far off equaling Himmler’s final solution. An overall force for the good? Bollocks!

No doubt Lenin created a mess but Stalin was a thug.
What happened in Russia and China scared the daylights out of many countries, just like the French revolution did to the UK. I don't follow how the threat of communism led to the justification of dropping unbelievable quantities of explosives on Vietnam and Cambodia.
I just don't think Russia is any longer the sworn enemy of the West. They have been dependable suppliers of energy to Europe, the way Russia was treated under Yeltsin has left many in Russia anti Western.
I cannot imagine how any country can survive after the horrors of Stalin or Mao, the millions killed and maimed the pogroms, the terror the population transfers.
I think the West needs an enemy to justify it's military spending, they are trying to make Russia fit the shoe but it's simply not working.
I had lunch with a Russian after the cold war ended, he used to be in the KGB, i found it rather unnerving. He risked his family and his life to transfer thousands of secret documents to the UK. this led to the uncovering of spies, important spies in the USA, his story was nothing short of incredible.

https://crimereads.com/oleg-gordievsky-the-greatest-spy-youve-never-hear...

It’s worthwhile to chart Churchill. Entrenched anti bolshevik, to pro Soviet, to Iron Curtain proponent. For the middle part suggest The Deadly Embrace by Read/Fisher. Human life in the ientirety of the history of Russia has been of little importance, and death of little consequence. Like Hitler Stalin soon grasped the importance of terror as a weapon, but he realised much sooner, the equal importance of death as a solution. The West cannot understand or accept how this has been imbued and accepted by the Russian people(s) since before recorded time. The Bolsheviks simply modernised things and the West reacted, with apologies to Hunter, out of fear and loathing. Over reacted. So going back to Churchill he realised that sitting back and setting Hitler against Stalin was going to be a double edged sword, whoever the winner turned out to be. Can’t change history and can’t change its direction overnight. That’s my take. Thanks for chance to vent.

Tks Andrew & from the look of it this in the same vein as my above recommendation. There is an argument surely that the British were blinded from backing the Whites and losing and could not put that to one side. In high circles their suspicion of Stalin outweighed their fear of Hitler. Stalin could see where Hitler was heading, lebensraum. Stalin reached out to the West but was rebuffed, bitterly. Had that not happened there would not have been the non aggression pact with Hitler and until Germany invaded them, Russia would not have been supplying raw materials and energy for their war machine. Without the pact and that supply, Hitlercould not have moved on Poland and beyond as early as he did. The whole Continental theatre of war would have been completely different. As said Churchill woke up to the impending consequences of ignoring Russia but he was too late, too alone,too powerless. The British have made any number of these sort of blunders. For instance read WW1 using the Japanese to take Tsingtao which gave them that foothold/springboard against China and a whole lot of islands in the Pacific for naval bases WW2.

Really, two weeks is all it takes to spout the Russian propaganda. Its Russia that has turned away from the West, not the other way.

Russia is actually doing pretty well. If you look at who the big food importers are, (for NZ growth it's mostly China) then Russia often already has close business contacts with them. Food security is often more of a priority than political convictions.

https://www.rt.com/business/443543-russia-wheat-exports-fifty-surge/

Its Brazil who has the most potential.

https://www.beefcentral.com/trade/jbs-grows-chinese-beef-beef-business-w...

"BRAZIL’S DOMINANT ROLE IN WORLD AGRICULTURE

The increase in Brazil's farm production has been stunning. Between 1996 and 2006 the total value of the country's crops rose from 23 billion reais ($23 billion) to 108 billion reais, or 365% and they continue to grow. Brazil increased its beef exports tenfold in a decade, overtaking Australia as the world's largest exporter. It has the world's largest cattle herd after India's. It is also the world's largest exporter of soybeans, poultry, sugar cane and ethanol. Moreover, Brazil supplies a quarter of the world's soybean trade on just 6% of the country's arable land.

No less astonishingly, is the fact Brazil has more spare farm land that all the spare land in both Russia and the U.S.. This is land in the right areas with the right rainfall that can be placed into production. This dominance has allowed Brazil to be labeled the world’s breadbasket and has turned Brazilian meat companies into the largest in the world. JBS and Marfrig, the purchaser of a majority interest in National Beef, are the number one and number two beef processors in the world.

As we all have read, doing business in Brazil like many other countries around the world is or has been tainted with payoffs and bribes. The wheels of commerce are oiled with payments, both political and commercial, to allow goods to flow in and out of the production venues. Reform is always just around the corner and it may happen. One thing that appears certain is some of the Brazilian giant ag companies are not going to wait to see, they are extending their grasp abroad and the U.S. is a important target.

The entry of Margrig into the beef processing business in the U.S. brings global expertise to our industry. The Brazilian companies now control something short of 50% [with JBS and Marfrig combined] of our processing capacity and will plan to source much of our domestic beef for export shipment. They also will challenge our own beef companies to innovate and will provide a competitive landscape for American beef producers to market their cattle. "

Here is a view that Russia is not the issue, and that Western Europe has not been doing enough assisting E Europe develop.

https://www.youtube.com/watch?v=FmM6IZmcWCg
Max can be a bit mad, so round the 12 min mark he talks to his China guy.

See you in Serbia!

Never Serbia but Slovakia looks interesting.

Im still thinking we are in an L recovery
https://www.alhambrapartners.com/2018/11/23/in-a-booming-economy-you-buy...

Andrewj,
Yes, there is still great potential for Brazilian agriculture, and without going anywhere near the Amazon jungle.
KeithW

Living in the information age is something I'm still trying to get my head around.

How does it take thousands of years to go from a hunter gatherer society to an agricultural society, a couple of thousand years to get to the industrial age, two hundred years to the Atomic and only two decades to the information age. So whats next, AI in ten years? Whats that look like because it appears to be heading towards us at breakneck speed.

Scary to say the least.........

Only one brief mention of Putin, dictator for life.

Politically they are in the 'East' alright.

Waymad,
A fascinating article by Goldman ,with great insights but still from a very American-centric perspective
KeithW

To be sure. But one has to ponder the chances of publication of anything remotely similar, and always excluding the security apparatuses (apparati? apparatchiks? apparitions?) from within Russia under Tsar Putin, or China, under Emperor Xi.......