Agriculture, Baltic States – CIS, EU – Baltic States, Financial Services, Legislation, Markets and Companies

Nikolai Fyodorov.

This is the first time when a Russian official admits that the decision to strike back at the United States and European Union's sanctions with sweeping meat and produce bans, may have long-term costs for both its budget and consumers.

Russia relies heavily on foreign fruits and vegetables because its long winters and inhospitable climate keep farmers from growing a wide range of produce desired by the country's booming middle class.

Russia also imported huge volumes of Australian and European meat along with U.S. poultry and Norwegian salmon, all of which are now banned from being imported into Russia.

Fyodorov told the Russian broadcaster "Rossiya 24" that in order to keep Russian stores stocked with the same range of goods until the end of the year, the country will require tens of billions rubles. EUR 200 million is the current equivalent for ten billion rubles.

But Fyodorov quickly warned that the costs would not end there. "Next year and in the subsequent years, you could say that this sum will be measured in the hundreds of billions of rubles," Fyodorov said.

His estimates imply that Russia may have to spend at least EUR 10 billion on subsidies over the next few years.

That level of support has not been provided for in the federal budget and may require other popular social programs to be cut.

The trade war is part of a broader crisis in East-West relations sparked by Russia's perceived attempts to split strife-torn Ukraine in response to Kiev's new political and economic alliance with Europe.