Should Russia comply with EU food safety norms in the wheat sector?

The impressive volumes of wheat production in Russia on the one hand, and the good baking quality of Russian wheat on the other hand enabled Russia to become one of the important wheat producers and exporters of the world since the recent few years. However Russia has a long way to go in the “front” of Sanitary and Phytosanitary (SPS), i.e. food safety, standards. As part of a larger study, financed by the German Research Foundation, the current research addresses the objective of estimating the potentials of wheat production in Russia under more stringent food safety standards as the current Russian national SPS regulations are. The comparative advantage analysis based on the Domestic Resource Cost approach (DRC) is applied to estimate the possible compliance of Russian norms with EU SPS standards. The DRC analysis resulting in a ratio of 0,37 provides evidence of high social profitability of wheat chain in Stavropol region. Also the scenarios of compliance of Russian food safety norms with those of EU offers plausible solutions with DRC ratios varying within the range of 0,49 – 0,96 dependent on the fluctuations of model parameters. This is the third paper from the series of analysis of competitiveness of the Russian wheat sector under different food safety policies. The first paper estimated the policy of the full enforcement of national SPS regulations . The second work assessed the policy of compliance with the international SPS norms and considered also the sensitivity analysis under this policy. As far as the EU SPS norms are more stringent as the international standards, there is a necessity to assess also this policy option.