“Sweet” and “bitter” Arguments for the Right Protectionism

Abstract

The paper examines the dynamics and differentiation of agrifood markets in the context of the national policy of import substitution. The process of sugar market formation is analyzed in the context of the use of tariff and non-tariff protection measures, the “sweet” arguments in favor of protectionism are shown by this example. “Bitter” arguments are considered on the example of the garlic market, almost entirely represented on the Russian market by imported (Chinese) products. It is noted that the process of “conquering” the domestic sugar market began long before the imposition of the embargo on food imports. Budget support and lack of foreign competition became a powerful incentive for the growth of supply and a significant increase in exports. In December 2019, as a result of overproduction, the retail price of granulated sugar fell below production cost. This classic response was replaced by a sharp increase in consumer prices, which experts attribute to increased exports and focus on world prices. The author concludes that different approaches to each commodity market of the agro-food sphere and point economic policy, combining both measures to stimulate production volumes and measures to reduce it or maintain it at the same level, are necessary.