Russia Imposed Ban on Pak-Agro-Products 2013 An Analysis

1. Russian Ban on Pak Agro-Products 2013
(Destruction of Potential Market)
Tabassum Naveed
MSc-IR 3rd
April-2014
Introduction
Pakistan has rich agriculture potential which constitutes the largest sector of county’s economy. It accounts for
21 % of GDP and is a primary source of raw material to downstream industry and therefore contributes
substantially to Pakistan’s exports besides absorbing more than 40 % of employment. The exports of agriculture
products all around the world fetches over 625 million US dollars of foreign exchange which comes to 21% of
total foreign exchange earnings coming through exports.
Pak-Russian Trade Relation History
Pakistan's formal trade with Russia dates back to early 90s. Traditionally Pakistan's trade was west centric and
Russia also had inbound trade within Common wealth of independent states. The demise of former Soviet
Union brought a shift in Russian external outlook after which its trade expanded to outside world. Pakistani
exporters also capitalized the opening and established their foothold. With the expanding economy, its capacity
base is on rise.
Pakistan and Russia had some minor trade disputes in the past including;
i) Reluctance on part of Russia to sign FTA(Free Trade Agreement)/PTA(Preferential Trade
Agreement) as Russia earlier committed to sign PTA as proposed by Government of Pakistan
after signing WTO but later it declined on the pretext that it has already entered into Customs
Union with Kazakhstan and Belarus,
ii) Pakistan and Russian sides have long persisting overlapping claims against each other and in
the same very context , National Bank of Pakistan on the instructions of government of
Pakistan had to freeze 14 million US dollars account owed to Russian state corporations
As evident from the below Table exports to Russia not only include conventional items but market is opening
up for finished products like sports, cutlery and leather products which is an encouraging sign.

2. 52.419
83.4
98.626
105.757
119.2
183.57
189.614
0
20
40
60
80
100
120
140
160
180
200
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Exports Flow to Russia
US $ in Millions
Regardless of the volume, the encouraging aspect is the fact that exports to Russia is on the positive trajectory.
As evident from the above table, the exports in the last 5 years grew 100 percent which is quite a rare
phenomenon and speaks of the potential of Russian market.
Ban History
1. In year 2007, Russian government imposed first ban on Pakistan’s agro products on account of
Quarantine (it is a regime preventing intrusion of diseases from other countries) issues which was
lifted in following year.
In Nov 2007, a MUTUAL COOPERATION PROCEDURE AGREEMENT was signed with
Russia and Government of Pakistan assured to make full compliance up to the Russian and
international standards.
2. Russia's Federal Service for Veterinary and Phytosanitary Surveillance (FSVPS) has placed ban on
import of Pakistani agriculture products from October 1, 2013 for discovering bacterial contaminated
potatoes and quarantine objects in rice.
Phytosanitary (is a normative act undertaken to prevent introduction/spread of pests and diseases.)
3. Russian authorities have attributed this ban on account of systematic violations of international and
Russian Phytosanitary and quarantine requirements.
4. Instead restricting the ban to contaminated items, Russian Government went ahead and implied it on all
agro exports from Pakistan.

3. In Feb 2012, Russian Authorities hinted at imposing restrictive measures against import of quarantine products
including Orange, rice, mangoes and potatoes and called upon quarantine controlling body to take cognizance.
FSVPS placed a notice on its website about imposing ban on Pakistani products but same couldn’t invite
attention of government authorities and remains unnoticed.
A letter by RSVPS, Russia written on 14th
Feb, 2012 expressing anxiety over presence of nematode in potatoes
and likely quarantine objects in citrus products and referred to the pending replies on part of Ministry of Food
Security Pakistan since year 2008.The replies were pending for the last 4 years in which only basic details were
solicited by Russian authorities.
The banning orders which says;
“Introducing temporary restrictions on imports from Pakistan on the territory of Russian Federation of
regulated products of highly phytosnitary risk, according to the list of regulated products subject to
quarantine control at Custom border of Customs Union and Customs territory Union approved by
Commission of Customs Union on 18th
June, 2012.”
From here the problem starts
In one of the recent studies conducted by trade wing of Ministry of Commerce, Russian market is perceived to
have a huge potential for Pakistani exports particularly fruits and vegetables. Pakistani kinos are on high
demand in Russia and being used for making juices as mix content with Vodka drinks.
The ban is likely to have instant adverse implications on upcoming Kino and potato season which assumes a
substantive proportion of exports to Russia. The season starts in December/ January and thus the ban will have
immediate loss of approx. 55 million for Kino and 24 million USD for potatoes which tunes up to 80 million
USD instant impact.
In the last few years, efforts have been undertaken to introduce Pakistani meat and processed food items which
are likely to be matured soon. In the wake of current distrust, it is quite likely that Pakistan may not able to enter
into this field and the UNTAPPED REMAINS UNTAPPED.
Since the ban implies on all agro items, overall it will deprive off Pakistan from 160-170 million US dollars
foreign exchange. When we would not like to let go a single dollar, this quantum of losing foreign exchange
will be a serious setback for the ailing economy of the country.
Competitors in Russian Market
Pakistan’s main competitors in the Russian market for Kino and potatoes are Egypt, Morocco, Spain, Israel,
Holland and France. They will definitely grab Pakistan’s market share due to the void created on account of
ban.
Russia, Kazakhstan and Belarus are signatories’ to Customs Union. On occasions, the consignment destined to
Russia, reaches at Belarus from where it is transported to Russia by road while a portion of it, is consumed in
local market as well. It is quite likely that Belarus and Kazakhstan may also follow the suit and Government end
up in loosing additional 12 million US dollars per annum.
Consequences
Since the ban attributes to health reasons, it has a social dimension as well. It may shatter the confidence of
consumers in those markets. Once an agro-product is labeled for being contaminated, the consumers may not
like to prefer it if alternative option is available.

4. Apart from international trade perspective, the ban has serious domestic implications. Thousands of people
employed in agro-sector and export industry would lose their jobs which would increase the poverty and
ultimately lead to rise of crimes.
Closure of international market means more supply in local market and hence price would drop significantly
due to which farmers will suffer.
It can be safely deduced that had the Ministries of National Food Security and Commerce had at least responded
in time, we could have been able to avoid horizontal application of ban on all the agro products.
Even in follow up of ban imposed, the draft MOU was signed and the Minister for National Food Security
(Pakistan) held a meeting with Russian Ambassador on November 2013 and discusses the prospects of lifting of
ban. He has categorically conveyed that Pakistan has to ensure strict compliance to quarantine and
phytosanitary regime. The meeting didn’t bring any positive result.
Failure of Govt Authorities
Issuance of Phytosanitary Certificates without due processing has raised a question mark on our governance
framework - leading to embarrassment at international level. Inaction on part of government against the
complaints added insult to the injury. In a bid to save skins of individuals, credibility of national organization
has been put on stake.
The recent incident has vehemently exposed lack of inter-ministerial coordination framework. After 18th
amendment, Ministry of Food & Agriculture was devolved but clarity of mandate and terms of Reference has
become a serious barrier in routine working. Apathy on part of Ministries concerned shows that probably
gravity of situation has not been realized at all.
Ministry of Commerce in the case under consideration, miserably failed to play any worthwhile role instead it
confined itself to an isolation and left the matter into the hands of Ministry of National Food and Security. Its
role was in total contrivance to one of the cardinals of its marketing mandate i.e. collection of better commercial
intelligence. In the case under consideration, the INTELLIGENCE KNOCKED AT THEIR DOOR BUT
MINISTRY KEPT ITS EYES SHUT
Phytosanitary and Quarantine issues have assumed prime significance in international trade spectrum.
Unfortunately, In Pakistan no tangible efforts are seen on ground despite prospects of capitalizing foreign
funding. A Lab has been established at Karachi but failed to implement second phase i.e. hiring human
resource.
Russian Trade attitude
Russian authorities are quite strict on quarantine and quality control standards.
1) Case Study of Indian Ban & Response
Russia imposed a similar kind of ban on India in 2012 due to presence of pest on rice and oil seeds and Indian
government reacted very fast and sent two member delegation to Russia on 9th
day of receiving complaints and
managed to resolve it in 4 months’ time. They also invited Russian delegation to India and arranged inspection
to the cultivation sites and assured full compliance. Likewise they didn’t let the ban to be imposed on any other
item which had no symptoms of contamination.
2) Case Study of Netherland Ban & Response
RSVPS issued a warning to Netherlands on presence of quarantine objects on food items which was
immediately addressed by up gradation of their quality standards in line with Russian standards. Netherlands
Ambassador took keen interest in the matter and managed it in 45 days.

5. Recommendations
Post of Trade Co-coordinator for Russia should not be vacant for what so ever reasons. He is considered as THE
MAN who acts as interface between the two governments on trade matters.
1. Engagement process of Russian Authorities using diplomatic channels be done forthwith. Russian
delegation may be invited for discussion on their concerns, offering inspection of cultivation sites,
processing units, export centers etc. Ministries of Foreign Affairs, Commerce have to integrate and
coordinate for evolving a well thought out strategy.
2. Russian authorities should be convinced to allow exports of those products against which there are no
issues of quarantine. Additional safeguards be invoked after consultation with Russian authorities i.e.
after testing from any laboratory on which they have more faith.
3. Minstry of National food security should conduct an inquiry into the issuance of certificates without due
process and culprits be penalized. The same may be shared with Russian authorities to win their trust.
4. The situation demands that its capacity building on scientific/electronic lines be made and Unified
integrated system called Webocc be installed which would not only weed out chances of fake
certification but would also establish an efficient networking mechanism within trading partners. The
funding of WTO and World Bank need to be capitalized as they are quite open to it.
5. There is a need to mobilize Russian importers for seeking immediate concession for export of other
agro items less rice and potatoes. It is the responsibility of our Embassy in Russia to reach out to local
importers and sensitized them on the issue.
6. Pakistan Russia Business council should be established for establishing linkages between the stake
holders of both the countries. Such like associations play an active role in dispute settlement processes.
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