Sanctions present Russian cheesemakers with Gouda opportunity

Thanks to Western sanctions, Russian cheese producers have celebrated three strong years of growth, but economists warn the rest of the economy is suffering.

Celebrating sanctions: Cheesemakers are happy, but economists warn Russia's economy is hurting

Oleg Sirota is an IT worker turned cheesemaker. He hopes to become Russia's 'King of Parmesan.' (Corinne Seminoff/CBC )

When Russian cheesemaker Oleg Sirota's prized dairy cow wandered away from its pasture recently,  he worried it was an omen of bad news to come.

He had nicknamed the animal, "Sanctions" — a playful poke at the economic measures imposed by the West on Russia that have crippled economic growth here  — because in Sirota's case, the supposedly punitive moves have provided him with lots to celebrate.

His cheese-making business is booming, but he was concerned the missing cow might augur an end to that, as President Donald Trump mused about loosening Russian sanctions.

"We were so worried we lost Sanctions —  the most valuable thing we have,"  he said on his farm in Istra, about 78 kilometres west of Moscow.

Meet 'Sanctions,' the cow, and lucky charm of the third annual 'Sanctions Festival.' (Corinne Seminoff/CBC)

But he needn't have been concerned.

A few days later the cow wandered back, just in time for Trump to sign a new round of economic restrictions against Russia.

Longer the better

"We need at least another 10 years under the sanctions," Sirota said, leaning on a fence beside his good luck animal. 

"We worry if they remove these sanctions which we value so much. Right now they give us protection."

That first round of restrictions from the U.S., Canada and Europe was aimed at Russia's banking, finance and oil sectors in response to the country's 2014 takeover of Crimea.

Russian cheese lovers are getting used to new tastes and varieties of domestic cheeses. (Corinne Seminoff/CBC)
Russia responded with a series of import bans including a ban on European dairy products.

Sirota, a former IT entrepreneur from Moscow, saw an opportunity. He received a grant of land and start-up money from the Russian government to get into the cheese business.

This summer, he's preparing to release his first batch of parmesan cheese — which he claims will be indistinguishable from the real stuff from Italy and potentially land him the title of "Russia's parmesan king."

 "We need, like 10 more years of sanctions.  If Russia has a decade of sanctions,  we'll be selling our cheeses to Europe,  America and Canada."

Sanctions festival

Every summer in early August, Sirota now throws a festival on his rural property to celebrate sanctions.

Russians are now making over 70 types of cheeses, including ricotta, Roquefort and mozzarella. (Corinne Seminoff/CBC)

This year, scores of producers set up booths for tasting, offering soft cheeses such as Brie, Camembert and goat's cheese and harder ones such as Gouda.

The taste varies widely, as cheese-making techniques for each of these varieties have taken generations to perfect.   

"I can't say it's the same quality that we bought in Italy but it's very good quality,"  said shopper Dimitri Virashnikov.

The Russian economy is in a deep system crisis- Andrey Nechaev, Russian economist

Russia used to import $1 billion of European Union cheese every year. In countries such as Denmark,  Russia was overwhelmingly the largest cheese export market.

Hard facts and figures about cheese production are hard to come by, but the Russians officials have suggested cheese production is growing by at least 10 per cent a year.

Russia's government has also spent heavily to help farmers buy new machinery and production equipment.

Resenting the Americans

Still, outside the dairy and agriculture sector, resentment over Western sanctions remains intense.

More than a week after the latest U.S. sanctions — approved by Congress in response to allegations of meddling in the last presidential election — Russia's nightly talk shows continue to feature angry speakers denouncing the unfairness of the measures.

"America sees us as their competitor," vented one pundit.

"They want to clear us away."

Economists who've studied the impact of the sanctions say, while certain sectors may benefit from the lack of competition offered by the dairy ban, in the long term the results on Russia's economic growth will be felt.
Economist Andrey Nechaev says, despite some highly publicized upsides, in the long run sanctions will impede Russia's economy (Pascal Dumont)

"The Russian economy is in a deep system crisis," said Andrey Nechaev, an economics professor and Russia's first post-communism economy minister in Boris Yeltsin's government.

He said the lack of competition in many areas of Russia's economy has created a poor investment climate which sanctions and counter-sanctions have made worse.

He singled out the impact the restrictions are having on the oil and gas sector with regards to curtailing foreign exploration and drilling.

"You can live without this for some years. After several years you have no new oil fields and then it will be a negative result,"  he said.

A bigger farm

After two years of shrinking, most analysts are expecting Russia's economy to finally start growing again slightly this year.

Agricultural production — a fraction of Russia's main commodity, energy — is anticipated to have a good year.

"Every year,  there are more and more of us. Last year,  there were 25 farmers, next year 150, and after that there will be a 1,000," Sirota said.

Sirota said he may even need a bigger farm if his cheese party continues to be such a big hit.
Alexander Krupetskov proudly wears his 'Thanks for the Sanctions' T-shirt. He used to work in computers but now makes Camembert cheese. (Corinne Seminoff/CBC)


Chris Brown

Foreign Correspondent

Chris Brown is a foreign correspondent based in the CBC’s London bureau. Previously in Moscow, Chris has a passion for great stories and has travelled all over Canada and the world to find them.