Putin's Inane Food Contraband Destruction Policy
In an action as economically stupid as president Roosevelt destroying US farm
produce during the Great Depression, Russia Incinerates Contraband Food.
One year into its embargo on western food products, Russia
has launched a controversial campaign to destroy all contraband meat, dairy
and produce, using on-the-spot incinerators, dump trucks, rollers and meat
grinders.
On Thursday, three federal agencies began confiscating and burning hundreds
of tonnes of illicit cheese, fruit and other goods, acting on a decree signed
by Vladimir Putin. Incinerators to destroy the food have been placed at
Russian border points stretching from Kaliningrad in the west to St
Petersburg in the north and Altai in the east.
By mid-afternoon on Thursday, Russia’s agricultural watchdog announced that
it had already destroyed 55 tonnes of peaches, nectarines and tomatoes in
Smolensk; 20 tonnes of cheese in Orenburg; and nine tonnes of cheese in
Belgorod.
In Moscow, the agency said it seized 28 tonnes of meat products from Canada,
the Netherlands and Germany and 28 tonnes of Polish apples and tomatoes.
“This work will be performed every day. This is not a one stage campaign — this
is serious work,” Alexei Alekseenko, a deputy for the agricultural
watchdog, told a Russian radio outlet.
Serious Stupidity
This is not "serious work", it's seriously counterproductive
stupidity.
Plagues of Locusts Invade Russia
Under any circumstances, destroying badly needed food items makes no sense,
and the insanity of such actions is heightened by the report Plagues of Locusts Darken Skies, Threaten Crops in Southern
Russia.
Waves of locusts began around July 20, according to
Stavropol’s regional agricultural ministry. Vasilii Yegorov, a deputy
agricultural minister, told ABC News that locusts appear in the region every
year but normally they are able to exterminate them before they hatch.
This year though, Yegorov said, locusts had migrated from neighboring Russian
regions, meaning authorities were unable to halt them easily, threatening
what is one of Russia’s major farming areas.
Swarms have been reported across many other southern regions, stretching from
Chechnya to the Astrakhan province on the Caspian Sea. Because of the
locusts, a state of emergency has been declared in three regions near
Stavropol, according to local media. In Stavropol alone, efforts to kill the
insects have stretched across more than 350 miles, according to officials.
Video of Swarming Locusts
I propose a simple economic law.
Law of Asset Destruction
- It never makes any sense to destroy your own productive
assets.
- In war, it may make sense to destroy someone else's
assets, but never your own.
To dispute point number one, someone may point to a "teardown" that
makes a property more valuable, but in such cases the "teardown"
itself should properly be considered a liability on the overall asset.
Putin Enforces EU Embargo on Russia
Once confiscated, rightly or wrongly, those food items became state assets.
And Putin destroyed them.
In the process, he missed a grand opportunity to make a mockery of the EU's
alleged embargo.
Putin could have and should have said "In spite of EU food embargoes,
we get food items from France, Spain, and Italy". A golden
opportunity to laugh at the world was tossed into the toilet.
Putin is effectively enforcing the EU's embargo on Russia!
What an economic moron. No other word come close to describing the
sheer stupidity of this move.
Addendum:
I had originally called it the "Law of Productive Assets" but
a more fitting title is "Law of Asset Destruction".
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
