Journal of Quality and Environmental Studies
Volume 2, Issue 1, 2016
RUSSIAN
EMBARGO
ON
VEGETABLES AND FRUIT AS A
POLISH ECONOMY PROBLEM
Grzegorz Czapski 5
Uniwersytet Technologiczno-Humanistyczny w Radomiu
Abstract
Purpose: The general objective of this article is to present the consequences of
introducing the Russian embargo on fruit and vegetables from Poland on Polish
national economy.
Design/methodology/approach: literature review, critical analysis of the text.
Findings: The article presents the effects brought about by the introduction of
the Russian embargo on fruit and vegetables on Polish economy, and especially
the agricultural industry.
Originality/value: A very important move was the action taken by the
government authorities, aimed at reducing the effects caused by the ban on the
sale of the products in Russia.
Keywords: embargo, Russia, ban
Paper type: case study.
The current issue and full
text of this journal as
archive is available on
Scientific Society of Quality
and Environment at:
http://journalqe.com
Received: 15.03.2016
Revised: 21.03.2016
Accepted: 29.03.2016
Journal of Quality and
Environmental Studies
Volume 2, Issue 1, 2016
pp. 28-32
© Scientific Society of
Quality and Environment
5
Corresponding author
Grzegorz Czapski can be contacted at: [email protected]
28
Journal of Quality and Environmental Studies
Introduction
The embargo on fruit and vegetables
is not the first ban that has been imposed
on our economy. In 2005, Russia
imposed an embargo on imports of meat
and live pigs from Poland and then in
2006 they acted in a similar way towards
Ukraine. At that time we could see an
increase of exports from Poland to the
European Union. Modern Polish
economy depends on internal and
external factors, one of them is export of
food products to other countries. The
objective of this paper is to present
different points of view concerning
changes in Polish economy that resulted
from the introduction of the Russian
embargo. The article is based on
available literature, materials contained
in specialist journals and interviews with
practitioners from the agricultural sector.
1. The notion of embargo
According to the dictionary of foreign
trade "embargo" is an export or import
ban on some goods to and from a specific
country or a total ban on export and
import of gold, valuables or goods.
Embargo can be introduced in time of
war or peace, and it also occurs as
reprisals. It was used on the import and
export of goods from France to the Great
Britain during the Napoleonic wars, by
Western countries towards the Soviet
Union (in 1933 the United Kingdom
placed an embargo on the import of
many goods from the USSR); after the
Second World War, Western countries
introduced an embargo against China. It
was also used against the countries
tolerating overt racial discrimination
(South Africa, Southern Rhodesia).
However, in the book titled "Macro and
microeconomics
basic
problems"
embargo is defined as the most
restrictive form of non-tariff restrictions
- a ban on imports or exports. The
reasons why such limitations are
introduced can be political, economic,
ecological or any other. In the
Volume 2, Issue 1, 2016
managerial lexicon by Vaclav Šmida the
concept of embargo is understood as
“(…) issued by the state, a ban on
leaving the country by its own citizens,
on an outflow of ships in a certain
direction, as well as an arrest of foreign
citizens and their property (ships, goods,
etc.) in order to put pressure.
2. Russian embargo on fruit and
vegetables from Poland
The Russian embargo on fruit and
vegetables is valid from 1 August 2014.
The ban was introduced by the Russian
authorities in connection with the regular
infringements of provisions upon
delivery of food products to Russia. One
of the main reasons of the cessation of
receiving fruit and vegetables was the
presence of pests in the transports from
Poland. The ban on imports to Russia
concerns, among others, apples, pears,
cherries,
plums,
cabbages
and
cauliflowers. The effect of the ban was
an increase of prices in Russian shops
and shortages of certain types of
products on store shelves.
According to the Ministry of
Economy, the Russian ban affected
almost 15 percent of the total Polish
exports, which in 2013 was estimated at
11 billion dollars. The losses caused by
the introduction of the Russian embargo
on fruit and vegetables from Poland,
were estimated at about 3.5 billion Polish
zlotys. The most affected were fruit
growers because about 56% of the
national production of apples and 62% of
pears were exported to Russia. At the
same time half of the Polish production
of tomatoes and cabbages went to the
east. The Polish food-processing
industry suffered a loss estimated at 160
million euros because of Russia
introducing meat embargo.
According to the Ministry of
Economy in 2007-2012 there was a
noticeable increase in exports as well as
imports of goods between Russia and
Poland. The range of the changes is
shown in Table 1.
29
Journal of Quality and Environmental Studies
Volume 2, Issue 1, 2016
Table 1. Polish trade turnover with Russia in the years 2007-2012
Balance
Import
Eksport
Value in mln EUR
Polish
(Total)
to Russia
Polish
(Total)
from
Russia
Polish
(Total)
with
Russia
2007
2008
101 839,00
116 224,00
98 218,00
4 707,00
6 050,00
3 696,00
120 389,00
Eksport
Import
to Russia
Polish
(Total)
from
Russia
142 448,00 107 529,00
2010
2011
120 373,00 136 694,00
5 031,00
2012
143 456,00
6 139,00
7 678,00
134 188,00 152 568,00
154 040,00
10 499,00
13 877,00
9 206,00
13 730,00
18 380,00
21 629,00
-18 551,00
-26 204,00
-9 311,00
-13 815,00
-15 875,00
-10 584,00
-5 792,00
-7 828,00
-5 610,00
-8 699,00
Dymanics
-12 242,00
-13 951,00
2010
2011
2012
2007
Polish
(Total)
2009
Share in%
2008
2009
2007
2012
100,0 100,0
4,6
5,4
100,0 100,0
8,7
14,0
2012/
2007
115,8
114,1
84,5
122,6
113,6
104,9
140,9
125,2
128,5
59,4
139,9
122,0
125,1
163,1
119,5
128,3
75,5
124,8
113,7
101,0
128,0
107,8
132,2
66,3
149,1
133,9
117,7
206,0
Source: www.mg.gov.pl [Retrieved on: 11.02.2016].
Based on the data of the Central
Statistical Office, the Ministry of
Economy has prepared an analysis of
Polish exports to Russia. The drop in the
exports was particularly marked in the
fourth quarter of 2014. The biggest
regress, with more than a half of the
value relates to food products (Fig. 1).
Fig. 1. Polish export to Russia (in mln EUR)
Source: www.mg.gov.pl [Retrieved on: 11.02.2016].
30
Journal of Quality and Environmental Studies
Volume 2, Issue 1, 2016
Poland was one of the largest
suppliers of fruit, vegetables and dairy
products to Russia. An accurate analysis
is shown in Fig. 2. Russia was
considered to be one of the best Polish
trade partners.
Fig. 2. Amounts of food exported by some
countries to Russia
Source:
www.mg.gov.pl
11.02.2016].
[Retrieved
on:
As a result of the activities aimed at
the limitation of product exchange,
Poland was among five the most affected
countries by the introduction of the
Russian embargo. Fig. 3 shows potential
losses of the countries the cooperating
with Russia.
Fig. 3. Possible losses of each country caused
by the Russian embargo, in GDP percentage
Source:
www.mg.gov.pl
11.02.2016].
[Retrieved
on:
The analysis of the data shows that
Russia was one of the most important
trade partners for Poland. However, in
2014 there was a decline in the exports to
Russia. Based on the above data it can be
assumed that if there had been no export
embargo to Russia, a growth of the
Polish GDP would have occurred.
3. State aid after the Russian embargo
To reduce the effects associated with
the lack of export opportunities to Russia
an Internet campaign "Eat apples to
annoy Putin." was launched. The
objective of the campaign was to
promote Polish apples, as well as help
their producers. This action gained
strong support among Poles and
neighboring countries. The Ministry of
Economy allocated about 3 billion zloty
in support of Polish exports. These funds
were aimed at the promotion of Polish
products in India, Indonesia and the
Balkan countries.
More support for Polish farmers was
declared by the European Commission.
It supported Polish agriculture with 125
million euros. The funds were allocated
for the withdrawal of surplus products
from the market, which in turn would
prevent a decline in prices on the market.
The Polish authorities, to help
financially fruit and vegetable producers,
have prepared a draft law “to suspend
repayments of certain loans and credits
incurred in connection with farmming
activities”. The project of this Act
provides aid in the suspension of loan
repayments by farmers, who have
suffered financial losses in connection
with the introduction of the embargo, for
a period of one year from the date of the
entry into force of this Act.
4. Conclusion
The introduction of the Russian
embargo highlighted the degree of
dependence on the eastern market and
made it clear that many different sectors
of Polish economy are in close relations
with Russia, directly or indirectly. The
actions taken by the Polish authorities
after the introduction of the embargo by
the Russians played a very important role
in minimizing the effects of the crisis in
the food-processing sector. c In the case
of the Polish state inaction, the situation
of Polish agriculture would have been
dramatic, and consequently could have
led to liquidation of many farms.
Entrepreneurs also undertook a number
of actions to deal with the difficult
economic situation. One of these actions
was to look for new contracts on the local
and national market. Consequently there
was a decline in prices on the transport
market and at the same time an
31
Journal of Quality and Environmental Studies
Volume 2, Issue 1, 2016
improvement of the quality of transport
services.
References
Białecki K., Dorosz A., Januszkiewicz W.,
Słownik handlu zagranicznego wyd. 2 zm.,
Państwowe Wydawnictwo Ekonomiczne,
Warszawa 1993.
Marciniak S., Makro i mikroekonomia
Podstawowe
problemy,
Wydawnictwo
Naukowe PWN, Warszawa 2013.
Šmid W., Leksykon menedżera, Wydawnictwo
Profesjonalnej Szkoły Biznesu, Kraków
2000.
www.biznes.onet.pl.
www.cargonews.pl.
www.mg.gov.pl.
www.rp.pl.
www.sejm.gov.pl.
32