Black Sea Grain Initiative: Will Putin create world hunger?

Ihor Petrenko

13 mins - 25 de Julio de 2023, 07:00

On July 18, 2023, Russia suspended the Black Sea Grain Initiative, or as it is called in the media, the “Grain Agreement”. A day earlier, the Russian Federation announced its withdrawal from this agreement against the background of the attack on the Crimean bridge - the Kremlin announced this decision through the mouth of Putin's Press Secretary D. Peskov. Russia also refused to provide route security guarantees for vessels with Ukrainian grain headed towards the Bosphorus. This means that the Russian Navy can attack any military or civilian vessel located in the northwestern waters of the Black Sea. Already in the short term, we should expect an increase in prices for bread and food in such EU countries as Spain, Italy, and the Netherlands, and a high probability of famine, as well as the influx of refugees from Africa to Europe in the future.

For context: The Black Sea Grain Initiative was signed on 22 July 2022 with the participation of Minister of Infrastructure of Ukraine Oleksandr Kubrakov, Minister of Defense of Turkey Hulusi Akar and UN Secretary General Antonio Guterres. Russia concluded a similar agreement with Turkey and the UN. It was signed by the Russian Defense Minister Sergei Shoigu. The document was called “The Initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian ports”. Formally, Ukraine did not conclude an agreement with the Russian Federation, with which it has de facto been in a state of full-scale war since February 24, 2022. The UN and Turkey, which were interested in resuming the export of Ukrainian grain, became mediators in this process.

Ukraine is the breadbasket of Europe and the guarantor of food security in the world. As of 2022 (before the start of the full-scale invasion), Ukraine occupied the 1st place in the world by the volume of sunflower oil exports (45 % of the world market). According to the Food and Agricultural Organization of the United Nations (FAO), the country also was the 3rd in terms of corn and barley production, and the 6th in wheat production. In general, before the war against Russia, Ukraine held the 5th place in the world in terms of grain exports. The total export of agricultural products from Ukraine amounted to 50 million tons annually, that was 45 % of Ukrainian exports in general (in 2020, foreign currency income to the Ukrainian treasury due to the sale of food amounted to $22.2 billion). After the start of the full-scale invasion, Russia initiated a complete blockade of Ukraine's seaports. In the next few months of the war, food exports from Ukraine fell 5 times, hitting its economy and the national currency - the hryvnia. At that time, there were 22 million tons of grain in Ukrainian ports, which could not be delivered to buyers due to the blockade.

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The Russian generals viewed the military blockade of Ukrainian ports, first, as a tool to destroy the Ukrainian economy. The Kremlin sought to cause as much damage as possible to Ukraine and hoped that the complete cessation of agricultural exports from Ukraine would lead to the collapse of its banking system, the devaluation of the hryvnia, and the bankruptcy of agricultural enterprises and Ukrainian farmers - direct producers of agricultural products. If grain exports had not been resumed in July of last year, Ukrainian farmers would have been forced to reduce the area of cultivated land by 30 % to 60% compared to 2021, depending on the type of grain crops they grew (according to the Current Analytics of the Agricultural Sector of Ukraine). This was Russia’s deliberate actions in order to destroy the agricultural potential of Ukraine - its pride and a way of filling the budget.

The role of Ukraine as a grain exporter cannot be overestimated. Countries such as Lebanon, Djibouti, Pakistan, Somalia, Mauritania and Eritrea meet about half of their wheat demands thanks to Ukraine. Accordingly, a supply failure will cause negative consequences for these countries, because exporting grain, for example, from Canada to Lebanon will be much longer and more expensive than from Ukraine.

The Grain Agreement saved 100 million people from extreme poverty around the world. This statement was made by Stéphane Dujarric, Spokesperson for the Secretary-General of the United Nations, in October 2022.
Russia was aware of the importance of Ukrainian grain as a guarantee of the absence of the global famine. Therefore, the blockade of Ukrainian seaports should be considered not only as a way to weaken the Ukrainian economy, but also as an economic bargaining tool and an undeclared hybrid aggression against the West. In particular, long before the “Grain Agreement” was signed, Russia put forward 5 conditions that had to be fulfilled in response to the Kremlin's agreement not to interfere with the export of Ukrainian grain. Among them: the lifting of the ban on the export of Russian ammonia, the reconnection of the Russian Agricultural Bank to SWIFT, the resumption of supplies of agricultural machinery and spare parts to the Russian Federation, transport logistics and the unblocking of frozen Russian assets abroad - according to the most conservative estimates, it is about at least 300 billion euros. In other words, Russia sought to remove part of the sanctions imposed on it thanks to the unblocking of Ukraine's seaports.

The hybrid threat that directly affects Europe in case of a blockade of Ukrainian grain export means the natural famine in the countries of Africa and Asia. Accordingly, the EU is the closest and most attractive place where the citizens of these countries will seek refuge. In particular, of the above-mentioned 100 million people who would suffer to one degree or another from the lack of Ukrainian grain, at least 47 million would suffer from a severe famine. It is not difficult to imagine how shocking an uncontrolled flow of refugees could be for Europe, which would lead to a spike in crime, street violence and epidemics. On the Belarusian-Polish border, there are constantly refugees from Bangladesh, Pakistan and Iraq who seek to move to Germany through Poland. The Mediterranean Sea has become the only obstacle for thousands of refugees from African countries who are sailing to Italy, Spain and France. Russia has an extensive experience in organizing artificial famine, so now Putin is implementing this tactic to carry out a hybrid attack on the EU.

The rise in prices for bread and food is the least painful consequence for Europe if the Grain Agreement cannot be restored. In the future, the EU countries may receive a “tsunami of refugees” from Africa, who will seek salvation from hunger. In this case, the streets of European cities will become a zone of violence.
World hunger in the countries of Africa and Asia is a factor of regional destabilization. The geographical proximity of these regions to Turkey made it the next destination for refugees fleeing hunger. On the other hand, China is a powerful geopolitical player and an ally of the Russian Federation, traditionally exporting a large amount of Ukrainian grain, primarily feed grain. So it is not surprising that these two countries in 2022 pressed the Kremlin in an effort to restore the export of Ukrainian grain. China was responsible for backroom negotiations with Russia, while Turkey - for official ones: the Grain Agreement was signed in the Dolmabahçe Palace in Istanbul, and the Joint Coordination Center was opened in the same city on July 27, 2022, which monitored the implementation of the agreement. It is significant that on the day after the signing (July 23, 2022), Russia launched a missile attack on the Odesa Sea Trade Port, its capacity allowed for the shipment of a large amount of grain.

“Any agreement with Russia is not worth the paper it is written on,” Otto von Bismarck said.

Initially, the Grain Agreement was supposed to be valid until November 19, 2022, grain was shipped from the Odesa, Chornomorsk and Yuzhny ports (Odesa Oblast). On October 29, 2022, the Russian Federation briefly refused to implement it, referring to the shelling of Russian Navy ships in Sevastopol, and blaming Ukraine for this. On November 19, 2022, the Grain Agreement was extended, the Mykolaiv and Olvia ports (Mykolaiv Oblast) were also added, the capacities of which were used for grain export. In 2023, the Grain Agreement was extended twice: in March and May, respectively. From April 2023, Russia began to systematically interfere with the export of Ukrainian grain. Ships carrying grain from Ukrainian ports were detained by the Russians for a declared inspection, as a result of which the layoff lasted for days, sometimes weeks. On July, 17 2023, after a drone attack on the Crimean bridge, an important transport artery for the delivery of Russian troops and weapons to the occupied territories of Ukraine, the Kremlin announced its withdrawal from the Grain Agreement. On the morning of July 18, 2023, the Russian Air Force carried out a powerful missile and drone attack on the port infrastructure of Odesa and Mykolaiv Oblasts of Ukraine. The day before, Russian media called for the complete destruction of Ukrainian ports, bridges, roads, and railways.

According to the UN, during the Grain Agreement period, Ukraine exported 32.8 million tons of grain and oil crops, primarily corn and wheat, worth $9.8 billion. China bought a third of Ukrainian grain exports, taking the first place, while Spain and Turkey took the second and third places, respectively. At the same time, a large amount of Ukrainian wheat goes to poor and developing countries. This year's export potential of Ukraine is 40 million tons of grain, in addition, there is still not exported last year's surplus. Russia insists that it will join the grain deal if its conditions are met. It is expected that the Kremlin will continue to attack Ukraine's transport infrastructure and blackmail the West, and the Kremlin's minimum demand will be to reconnect RusAg Bank to SWIFT.

According to weather forecasters, the summer of 2023 will be hot and dry, many climate records have already been broken in Europe, 42 % of the EU territory, primarily Spain and Portugal, are at risk of severe drought. This will cause food prices to rise all over the world. Instead, Ukraine expects a favorable harvest.

Russia is calculating its steps, having developed in advance a plan to withdraw from the Grain Agreement and creating ideal conditions for artificial famine and the flow of refugees to Europe. Ukraine has certain opportunities to export grain by rail and through small ports on the Danube, but this method of grain transportation is more expensive, and the volumes are minimal. For comparison: Ukrainian ports can ship at least 7 million tons of grain in one month, while land transport infrastructure can transport only 12 million tons per year. Currently, there is not a single foreign ship with grain left in Ukrainian ports, Russia is predicted to mine the Ukrainian waters of the Black Sea and destroy Ukrainian port and transport infrastructure. After 16 months of war, the Kremlin no longer hides that the only reason it started the war is the occupation of Ukraine. Ukraine's agricultural potential, its logistics and port infrastructure are the guarantee of food security in the whole world, which is under threat due to the dictates of the Russian Federation. Accordingly, if the Black Sea Grain Initiative is not renewed, every average European will feel the consequences of its termination.

Currently, the President of Ukraine is calling on the world community to press decisively on Russia so that the invaders do not block the export of Ukrainian grain through the Black Sea. He offered Turkey and the United Nations to continue the Black Sea Grain Initiative to deliver Ukrainian grain to other countries of the world without the aggressor country. Ukraine, the UN and Turkey can jointly ensure the operation of the food corridor and the inspection of ships. It is Important to add that the termination of the Grain Agreement is a serious blow to Erdogan’s authority, who the day before declared that it should be extended and that allegedly Russia supports this idea. In addition to the political dividends from the implementation of the agreement for Erdogan, that demonstrates its at least regional leadership, he also has economic benefits, which is an important incentive for decisive actions in the situation of the financial crisis in Turkey. In the same way, the suspension of the agreement also affects the authority of the UN, which is already under great question. The world must clearly tell the Russian Federation that no one has the right to destroy the food security of any people.

The impression now is that Putin is bargaining, again seeking to secure concessions through blackmail, particularly concerning the sanctions regime. However, it's essential to remember that any concessions Putin perceives as weakness, and he will exploit it against the West. Therefore, a resolute, clear, and uncompromising stance is the only right step that will demonstrate to Putin that his blackmail no longer works, and there are forces ready to guarantee security even without Russia's involvement.

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