Import Substitution in the Meat Industry: Expansion for One Dollar

Abstract

Theagro-industrial complex faced another unexpected strength test. Reduced demand, especially due to suspended operation of catering and shopping centers, reduced incomes and new institutional barriers caused by the pandemic and protectionist policies, demonstrated problems and advantages of accelerated development.The food embargo and the current policy of import substitution “cleared the way” for domestic producers in the saturated competitive food market and ensured augmented demand and supply of Russian products respectively. However, protectionist policies produced some expected results precisely in the created “greenhouse conditions”. In the current situation of the coronavirus pandemic, a significant reduction in demand against the background of increased supply, which was achieved due to state support and absence of foreign competition, is now putting pressure on prices. For this reason, meat producers are intensively looking for new markets. Analysis of import substitution results, which at this stage is already exhausting its potential, showed the inefficiency of expansion policy under existing conditions. Reduction in state support for the agro-industrial complex that has become a political priority manufacturers point out as the main risk of further development.