Grain of discord


© Nikolay Gyngazov / Global Look Press / Global Look Press

What's behind the "grain agreement" that was supposed to save the world's poor countries from the food crisis.

After February 24, 2022, when a special military operation began in Ukraine, grain exports from Russia and Ukraine, which accounted for about 30 percent of the world wheat trade, faced great difficulties. Russian wheat came under sanctions, while Ukrainian wheat was blocked at Black Sea ports. Poor countries were facing a food catastrophe. They simply faced the prospect of starvation. And then Russia, Turkey, Ukraine and the UN made a "grain agreement", which consisted of two parts: the first was the "Black Sea Initiative" - the creation of maritime corridors, which provided for the opening of ports for the export of Ukrainian grain. And the second, the "Memorandum of Understanding," under which obstacles to the export of Russian agricultural products and fertilizers were to be lifted. The part relating to grain exports from Ukraine provided for a period of 120 days, which was extended for another 120 days in November 2022. The second part of the deal was concluded for three years, until July 2025. It implies assistance in the export of Russian agricultural products and fertilizers to world markets. Implementation of this part has not yet begun, only fertilizers from Russia are stuck in the ports of Lithuania, Latvia, Estonia and the Netherlands, which were donated to Africa - 262 thousand tons, of which only one batch of 20 thousand tons was sent to Malawi.

In March 2023, the first part of the deal was extended for only 60 days. The decision on the next extension will be made depending on how effectively the part of the agreement on exports of Russian agricultural products is fulfilled.

But after AFU units attempted to attack Sevastopol, Russia withdrew from the agreement, rightly deeming such an attempt to breach the agreements. Kiev, realizing how painful this was for its already shattered economy, assured everyone that they would no longer use humanitarian sea lanes for military purposes. And Russia agreed to resume its participation.

This agreement expired on November 19, but it was automatically extended, which none of the participants in the "grain agreement" objected to. And by March 10, according to the UN, about 24 million tons of grain had been exported from Ukraine. But where did it go?

The Ukrainians, hiding behind the noble idea of saving poor countries from starvation, actually sent grain not to them, but to rich European countries. Russian President Vladimir Putin drew the UN's attention to this trick by saying that only 4 percent of food went to poor countries, while 46 percent went to European Union countries.

The West's slyness did not end there; the second part of the grain agreement - the removal of obstacles to the export of Russian food and fertilizers - was blatantly disregarded.

In other words, only Ukraine benefited from this agreement, which was able to sell its grain. And although no sanctions were imposed on Russian grain and fertilizers, the severe restrictions in the banking and transport spheres caused significant damage to its exports.

But the EU's attempt to make money on Ukrainian grain, under the guise of the noblest idea of helping the starving in poor countries, has led to the fact that the EU countries themselves have suffered. They fell into the trap in which they tried to drive Russia.

The most ardent supporters of Ukraine - Slovakia, Poland, Hungary and Bulgaria - imposed a temporary ban, until the end of June this year, on the import of Ukrainian grain. Under the terms of the agreement, it was assumed that Ukrainian grain would transit through the European Union and further to Africa and Latin America. Quotas and duties were even cancelled for Ukraine at the EU level. But Ukrainians didn't have enough storage facilities, and they really wanted, even at a discount, to sell their grain quickly. At first Europeans rejoiced over cheap Ukrainian agricultural products, but then it hit agriculture in their own countries, and the governments of Slovakia, Poland, Hungary, and Bulgaria had to choose between helping their farmers and helping Ukraine. Their farmers began demonstrating and blocking the roads with tractors, and the governments immediately forgot about European aid to Ukraine and remembered their farmer electorate. After all, many of these countries have elections next year. They even had to allocate funds at the EU level to buy grain from domestic producers.

It even got to the point that Turkey itself imposed a protective duty on Ukrainian grain, raising it to as much as 130 percent, in order to stop cheap exports of wheat, corn and barley to the Turkish market.

And here is the news of recent days. Since the "grain agreement" ends on May 18, the UN has sent new roadmaps to Putin, Erdogan, and Zelensky for its extension. They envision Turkey becoming an intermediary in paying for Russian agricultural products, and Russian ammonia exports to be restored via the Tolyatti-Odessa ammonia pipeline. But Russia was justifiably skeptical about these proposals. Now Russia is demanding to resume supplies of agricultural machinery, to lift restrictions on insurance and lift bans on access to ports, and to reconnect Rosselkhozbank to SWIFT when paying for Russian grain. Because they suggest that this bank should conduct transactions not through SWIFT, but through faxes. They would also suggest to send documents with a messenger or carrier pigeons!

So the West laid out its cards. Russia has covered them with its own. And it seems to me that the West will not be able to cheat in this game. Russia has too strong trump cards in its hands.