Got milk? Belarus sells dairy to China as relations with Russia sour over trade blocks

Russia and Belarus are close allies and trading partners but ties have become strained

PUBLISHED : Wednesday, 14 June, 2017, 5:33pm
UPDATED : Wednesday, 14 June, 2017, 10:19pm

A spat between Russia and Belarus seems to have spilt over into the dairy sector, as Moscow has whipped up a conflict that is pushing its neighbour to export its products to China.

Ex-Soviet Belarus’s dairy producers accuse Russian food hygiene officials of deliberately sabotaging them by issuing multiple bans against various dairy plants and abattoirs.

While Moscow insists these measures are all about hygiene, they resemble the commercial embargoes the Kremlin has applied to other countries whenever political relations break down.

Russia and Belarus are close allies and trading partners but ties have become strained as veteran strongman Alexander Lukashenko, increasingly wary of Moscow since its annexation of Crimea from Ukraine, has argued over border controls and energy prices.

The stakes are very high for landlocked Belarus with its closed economy and extreme dependence on Russia: last year 95 per cent of its food exports worth $3.7 billion went to Russia.

The dairy sector is particularly important because Belarus has a large number of producers and they have a high reputation for quality in Russia, which does not produce enough milk for its own consumers.

Russian agricultural officials accuse Minsk of taking advantage of Russia’s embargo of European food imports imposed in revenge for EU sanctions by sending it products of inferior quality.

But for Minsk there is no doubt that “certain structures have an obvious interest in using their influence to keep out Belarusian producers” from the Russian market, said Belarusian agriculture minister Leonid Zayats in an interview with ONT state television.

The restrictions on Belarusian enterprises have fluctuated constantly for months - being introduced, then softened or toughened up. They take all forms, from outright bans to increased monitoring. At the end of May, they affected almost 100 dairy plants and abattoirs.

Searching for new markets, agriculture professionals met at a conference in mid-May organised to help them sell to Chinese consumers who increasingly hungry for dairy products.

“Russia has closed its market to us, I’ve come in order to start exporting to China,” Alexander Mikhailovsky, the director of the Lepelsky dairy plant, said.

Alexander Subbotin, the country’s chief veterinary inspector, said around 30 dairy producers had already been authorised to sell to China. And certification is underway for future exports of beef.

Subbotin said dairy exports to China in the first quarter of 2017 were worth $1.3 million, more than in the whole of 2015.

“We are going to sell our products to consumers who need them,” agriculture minister Zayats told state news agency Belta recently.

These commercial spats come at a time of complicated diplomatic relations.

Minsk has criticised Moscow’s role in the Ukrainian crisis and edged closer to the West by convincing the European Union to lift sanctions after Lukashenko freed imprisoned opposition politicians.

At a press conference in February, Lukashenko, in power for over two decades and prone to outspoken declarations, spent a long time berating Russia and accusing it of not respecting international agreements.

The Kremlin responded by reminding Minsk which side its bread is buttered: Moscow gives “major economic, political and other support to Belarus”, it said, citing loans and agreements worth tens of billions of dollars.

A meeting in early April between Lukashenko and counterpart Vladimir Putin helped smooth over the cracks, as they resolved a raging disagreement on the price of Russian energy supplies. But relations remain volatile.

Vladimir Zharikhin of the CIS Institute argues the crisis between the two is only relative, with Belarus still one of the few members of a Moscow-led economic union.

For Zharikin, Belarus needs the Russian market to sell its products and Moscow has an interest in protecting its alliance with a neighbour bordering the European Union.

He links the current problems to the Belarusian president’s personality and his “habit of raising purely business matters onto a political level”.

“These are relations between two close countries. They cannot always be absolutely cloud-free.”