Russia May Cut Poultry, Pork Import Quotas

Poultry and pork import quotas could be slashed, which would hurt U.S. poultry producers that supply nearly 75 percent of the total poultry import quota.

MOSCOW (AP) -- Russia could cut poultry and pork import quotas by hundreds of thousands of tons, Agriculture Minister Alexei Gordeyev said Wednesday, according to the ITAR-Tass news agency.

The move, which could hit American producers hard, came amid deep political tension between Moscow and Washington over the war in ex-Soviet Georgia.

Russia is the biggest market for U.S. poultry producers. They supply nearly 75 percent of the total poultry import quota set by Russia, which stands at 1.2 million tons.

"It is time to change the quota regime and reduce imports, which have unfortunately built up in recent years," Gordeyev said according to the agency. He added that domestic producers could meet the shortfall.

Earlier this week, Russian Prime Minister Vladimir Putin backed proposals to freeze some of the agreements -- particularly in agriculture -- relating to efforts to join the 153-member World Trade Organization. Officials claim Moscow agreed to certain conditions with member countries in return for their help in fast-tracking Russia's entry.

"Agreements signed more than three years ago as part of the negotiations on WTO accession are unfortunately no longer in Russia's interests," Gordeyev said, the agency reported. "To put it mildly, we've been deceived."

Last month, Russian and U.S. lobbyists agreed in principle to a cut in poultry imports into Russia from 2009.

An analyst said Russia's timing was no coincidence.

"It has been on the agenda for some time," said Chris Weafer, chief strategist at UralSib bank in Moscow. "But the fact that it has been mentioned now is almost certainly linked with the rhetoric that we've had from Georgia, and from Prime Minister Vladimir Putin. ... It has just been accelerated as a result of current events."

Russian forces drove deep into U.S. ally Georgia earlier this month. Moscow has kept troops in the Caucasus nations despite Western protests and on Tuesday ignored U.S. President George Bush's exhortation against recognizing the independence of two Georgian separatist regions.

Jim Sumner, president of USA Poultry & Egg Export Council, said it was important to separate economics from politics.

Overall, poultry imports account for nearly 40 percent of Russia's total consumption, and pork around 30 percent. The government has pursued a policy to prop up its agriculture industry in recent years, making efforts to attract domestic and foreign investment into a sector which has suffered from massive lack of investment in the past decades.

Russian President Dmitry Medvedev told the Group of Eight nations earlier this year that Russia had a key part to play in addressing the global food crisis. He said Russia would significantly increase its agricultural production and supplies to the domestic and foreign markets.

But analysts say it will take Russian producers time to plug the gap left by foreign producers. It could take up to two years for domestic supply to match demand, pushing up prices in the process, said Natalia Zagvozdina, an analyst at Renaissance Capital investment bank.

Associated Press Writer Nataliya Vasilyeva contributed to this report.

More in Global