Putin bans food from nations with sanctions on Russia

Russia's President Vladimir Putin chairs a session of the State Council Presidium in Voronezh on Aug 5, 2014. -- PHOTO: REUTERS
Russia's President Vladimir Putin chairs a session of the State Council Presidium in Voronezh on Aug 5, 2014. -- PHOTO: REUTERS

MOSCOW (AFP) - President Vladimir Putin on Wednesday slapped a one-year ban and restrictions on food and agricultural product imports from nations that have imposed sanctions on Russia over its defiant stance on Ukraine.

The decision marks yet another escalation in a furious diplomatic standoff that has seen Russia slip into growing international isolation and the onset of what some US media are calling a “new Cold War”.

It also threatens to send the price of Russian food soaring and feed public discontent with an economic slowdown that analysts indirectly attribute to Putin’s perceived backing of pro-Kremlin insurgents fighting government forces in eastern Ukraine.

Putin had earlier promised to shield consumers from the effects of any retaliatory steps he would take against the West for its painful new measures against Russia.

The Kremlin said in a statement that Putin’s executive decree “either bans or limits... the import into the Russian Federation of certain kinds of agricultural products, raw materials and food originating from countries that have decided to adopt economic sanctions against Russian entities and (or) individuals.”

Government spokeswoman Natalia Timakova said ministers were currently drafting the list of goods intended for future import restriction.

Russia’s Rosselkhoznadzor agricultural sector watchdog said it would publish its list of recommendations by Thursday evening.

Sources at the agency told Russian state media that the list would include all fruits and vegetables produced in the 28 EU nations. The ban would also cover US chicken and other agricultural goods.

State statistics show Russia has imported about a third of its food in the past decade.

Some of those deliveries have come from ex-Soviet nations with strong ties to Moscow.

But Russia’s expanding middle-class has also become accustomed to fancier packaged goods from Europe lining their grocery shelves.

Russia has already halted some food imports from a range of European countries and also threatened to limit the amount of chicken products it buys from the United States.

Moscow has denied that the measures were in any way linked to punishing new financial restrictions imposed by Brussels and Washington against state companies and officials with close links to Putin.

The latest punitive steps forbid companies in the EU and US from striking future deals in Russia’s vital oil and arms sectors.

Top state-held firms have seen their access to Western borrowing markets severely restricted and face a possible freeze on trade of their shares on both European and New York exchanges.

The volatility has stemmed the flow of Western investment into Russia and forced the Kremlin to search for new alliances with China and even nations such as Iran.

Moscow’s Vedomosti business daily said the Russian government was considering whether to strike back at the European Union by placing a total or partial ban on its airlines’ flights over Siberia to Asia.

The Western sanctions are expected to send Russia’s fragile economy to the brink of a recession by the end of the year.

“The scenario of retaliation entails significant costs to the Russian economy,” the London-based Capital Economic consultancy said in a research note.

“In the short term, the economy would fall into a deep recession, with output contracting by 2-3 per cent.”

But the West’s increasingly strict approach toward Russia has thus far failed to soften Putin or force him to call on the separatist militias fighting Kiev forces since April to lay down their arms.

NATO this week said Russia had boosted its military presence along its Western neighbour’s border to 20,000 from 12,000.