Regional protection rates for food commodities in Russia: Producer and consumer perspectives

Abstract

This paper examines producer- and consumer-protection measures for a set of food commodities in three Russian oblasts. Secondary data for the period 1992–1995 show that agricultural producers were taxed but at a diminishing rate. Secondary sources for 1995, supplemented by a comprehensive household survey, reveal significant subsidisation for food staples such as bread, sugar and milk on the consumer side, which reflects attempts by regional governments to buffer the negative consequences of rapid price increases resulting from food price liberalisation in 1993. Since most of these transfers are absorbed by the wealthier segments of the population, however, more efficient alternatives should be sought. The implied producer taxation and consumer subsidisation can be attributed mainly to poor economic institutions and infrastructure, rather than to trade and sectoral policies.