January 01, 1999

When the Going Gets Tough ... Buy Russian

In the remote, tsarist past, Russia was one of the world’s major exporters of wheat and other food products. Admittedly, Russia then included Ukraine, the proverbial “bread basket of Europe.” Still, the contrast with today could not be more stark. After seven decades of mismanagement, Russian farms and factories are too weak even to feed Russia alone.


Seven years ago, when the Soviet Union collapsed, the population’s growing demand for more and better foodstuffs was met by imports, rather than by serious reform of the agricultural sector. Imported foods poured into Russia like a torrent. Of course, the slick packaging, higher quality and greater reliability came at a higher cost. But, after decades of food lines and rationing, Russians were willing to pay that price. Until August 17, 1998, when the banking and financial crisis hit. Millions saw their savings and earnings become worthless overnight. Foreign food imports suddenly became an unaffordable luxury. As if waking up from a decade-long dream, Russians began searching for homegrown goods and found the pickings surprisingly slim. 

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