The Russia-Ukraine grain deal that has been critical to keeping global food prices stable and preventing famine is currently in tatters. On July 17, 2023, Russia said it was pulling out of the year-old deal, which allowed shipments of grains and other foodstuffs to travel past the Russian naval blockade in the Black Sea. And to make matters worse, over the next two days Russia bombed the Ukrainian grain port of Odesa, destroying over 60,000 tons of grain.

As a result, food prices have surged, with the cost of wheat, corn and soybeans in Europe, the Middle East and elsewhere all skyrocketing.

So, what is the grain deal, and why is it so important to the global food supply chain?

Anna Nagurney is an expert on supply chains, including those involving perishable products like food, and is co-chair of the board of directors overseeing the Kyiv School of Economics in Ukraine. She explains how important Ukrainian grain is to feeding the world—and why the Black Sea is a vital route to getting it to people who need it.

What makes Ukraine such an important part of the global food supply chain?

Ukraine has been called the breadbasket of Europe and is a major supplier of wheat, barley, sunflower products and corn to Europe as well as to developing countries such as in the Middle East, Northern Africa and China.

More than 400 million people relied on foodstuffs from Ukraine before Russia invaded Ukraine in February 2022.

One key reason for that is Ukraine has approximately one-third of the world’s most fertile soil, which is known as chernozem, or black soil. And before the war, Ukraine was able to rely on its year-round access to ice-free harbors in the Black Sea to ship grains to nearby markets in the Middle East and Africa.

What happened when war broke out?

Even before the war, famine was increasing across the globe. Russia’s invasion made it a lot worse.

From 2019 to 2022, more than 122 million people were driven into hunger by a combination of the impacts of climate change, the COVID-19 pandemic and the war in Ukraine, the United Nations said in a recent report. Other researchers have suggested global hunger is the highest it’s been since at least the early 2000s.

From February to June 2022, at least 25 million tons of Ukrainian grain intended for global markets got trapped in Ukraine because of Russia’s naval blockade, causing food prices to jump.

How did the grain deal come about?

The U.N. and Turkey brokered what is officially known as the Black Sea Grain Deal with Ukraine and Russia on July 22, 2022.

The agreement allowed for the secure passage of agricultural products from Ukraine from three ports on the Black Sea, including its largest port, Odesa. While the original agreement was to last 120 days, it has been extended several times since.

Ukraine has exported more than 32 million tons of food products through the Black Sea since August 2022. The World Food Program, the world’s largest humanitarian agency,
purchased 80 percent of its wheat from Ukraine. Ethiopia, Yemen, Afghanistan and Turkey have been the biggest recipients of humanitarian shipments.

The U.N. has estimated that the grain deal has reduced food prices by more than 23 percent since March 2022.

The amount of grain shipped per month had already been falling before the deal fell apart in July 2023, from a peak of 4.2 million metric tons in October to about 2 million tons in June. This is primarily because of slowdowns in the number of inspections Russians had been conducting before ships could exit the Black Sea.

Another problem generally is falling production. Ukraine is expected to produce 31 percent less wheat, barley, corn and other crops during the current season that it did before the war. And this estimate came before the destruction of a key Ukrainian dam flooded fields.

Why is the Black Sea so important for Ukrainian exports?

Colleagues at UMass Amherst and the Kyiv School of Economics and I published a study in May 2023 that showed just how vital the Black Sea ports are to ensuring Ukrainian grain gets out to the world. Before the war, 90 percent of Ukraine’s agricultural exports were transported on the Black Sea.

While Ukraine also ships its grain and other food over land through Europe, doing so costs a lot more and takes more time than sea exports. And transportation costs over land were rising because of the war as a result of mines, the destruction of agricultural infrastructure and other challenges.

Why did Russia say it’s pulling out of the deal?

Russia has threatened to exit the deal before, but each time it has chosen to stay in.

But on July 17, 2023, it said it’s unwilling to stay in the deal unless its demands are met to ship more of its own food and fertilizer. Over the following two days, it attacked Odesa with drones and missiles in one of the largest sustained assaults on the port. Russia also said it would deem any ship in the Black Sea bound for a Ukrainian port to be a legitimate military target.

This caused the price of critical commodities such as wheat and corn to soar and created vast uncertainty and global concern around hunger. Chicago wheat futures, a global benchmark, are up about 17 percent since Russia left the deal.

While Russia has extended the deal after previous threats, this time may be different. Russian strikes caused extensive damage to Odesa, which may severely limit Ukraine’s ability to export through the port in the future —deal or no deal.

I believe Russian leader Vladimir Putin is weaponizing food at a time of growing hunger. I only hope goodwill prevails and somehow Ukraine’s vital exports are allowed to continue.

Anna Nagurney is a professor and Eugene M. Isenberg Chair in Integrative Studies at UMass Amherst.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The post Why Russia Pulled Out of its Grain Deal with Ukraine, and What That Means for the Global Food System appeared first on Modern Farmer.

Within a week, soldiers had come to his village near Zaporizhzhya, in south-east Ukraine. He started hearing of bombs dropping and deaths rising in cities such as Kyiv. He even saw bombs hitting an airfield close to his house, all the while growing increasingly worried. 

Still, he was composed. Soldiers were now occupying most of the homes near him, and had cut off the ability to move freely. That was tough for Mistiuk, who farmed wheat, sunflowers and legumes over about 500 hectares of land. 

At one point, Mistiuk and his father had to prepare grain for their chickens, and they needed to drive to the grain shed. On the way there, a soldier “started interrogating us. He searched our car for bullets. He didn’t find any, and he allowed us to keep going, but still, those soldiers were quite dangerous. They threatened to shell the city and kill everybody,” Mistiuk says through a translator provided by PR Army. 

It was a month into the full-scale invasion, and supplies were running low. When Mistiuk realized he didn’t have enough food for his then-eight-month-old daughter, the panic finally set in. He knew his family had to flee to Ukrainian-controlled territory.

“Of course, this was not easy,” Mistiuk says, now settled in Lviv. “They interrogated us a lot at the border, but we still managed to escape.” 

Mistiuk is one of the lucky ones. Some estimates put the number of killed or injured civilians at more than 25,000, with millions more impacted. Across Europe, more than eight million Ukrainian refugees have been recorded in border countries such as Poland and Slovakia. As the occupation drags on, farm fields have been left to fallow or, worse, been destroyed. Many fields are now littered with landmines and explosives. Ukraine is one of the world’s top producers of wheat, sunflower and barley. Without these crucial ingredients making their way out through the Black Sea, global prices for the commodities rose dramatically and fueled food insecurity. In Ukraine, a country heavily dependent on agriculture, the losses in the sector are estimated to reach nearly $9 billion. The damage to bombed and shelled granaries was so severe that the Kyiv School of Economics estimates losses of roughly 12 million tons of grain. 

Now, in the midst of spring planting season, many farmers must decide if working their fields is worth the risk.

Ihor Mistiuk with his family. Photography submitted.

Traversing the minefield

Farmers in Ukraine can generally be sorted into three groups. The first, like Mistiuk, have been displaced from their farms. Either their land has been destroyed or it is in the remaining occupied territory, mainly along the southern and eastern borders of the country. The second group of farmers still have access to their lands, but they have been unable to get their crops out of the country effectively. The usual ports of export have been blocked; trains through Poland, Slovakia and Hungary have been banned at times, causing bottlenecks and wildly fluctuating grain prices in central Europe. Ports along the Black Sea have also been difficult to traverse, with the port in Mariupol under occupation, and others near Kherson and Donetsk closed. One of the only remaining ports is in Odesa, but shipments out have been slowed. A UN-backed deal, which allows ships hauling grain to pass through the port, has been under threat, though there are reports that Russia has extended it for 60 days. Without access to that grain, some of the most food-insecure countries, such as Somalia, move closer to famine.   

Andriy Dykun, head of the Ukrainian Agri Council, says that, ironically, farmers are now dealing with spoiled grain. “We can store it, but we cannot export it out due to the logistics. And, of course, some of the grain spoiled in the occupied territories because of the bombing on the warehouses and grain silos.” But there’s no way of knowing just how much grain spoiled or stolen.

So, the first two groups of farmers either have no land to farm or have nowhere to send their crops. But the third group is dealing with something far more dangerous: landmines—thousands of them. 

Oleksandr Schelokov with some of his goats. Photography submitted.

Oleksandr Schelokov, a dairy farmer near Kyiv, has come to know the landmines intimately. “Just yesterday, we found a mine in the forest. It’s the only place I can go with my goats, and there are a lot of mines still left,” Schelokov explains through a translator. “Bombs can go off anywhere in Kyiv, almost anytime. But I’m most afraid of the minefields and the forests.” 

On the night of the invasion in February, Schelokov didn’t hesitate. His farm is too close to Kyiv, and the bombing was immediate. He gathered his wife, three daughters and other family and neighbors and tried to take shelter in his house. However, they lost power and water quickly. Schelokov knew they had to flee. 

“As the bombing grew..my daughters were very afraid,” says Schelokov. “We first tried to go on the highway, but it was closed by Russians. Then we fled through the fields.” Schelokov made the difficult decision to split his family up. Half went up towards Kyiv and the other half south, towards Uman. But Schelokov turned around and went home. 

“I returned to the farm. I was responsible for all of these animals. And they were without food, without water. Those animals needed me. I saw some of my neighbors had just opened the gates of their farms and their animals were in the wild. Those animals died very early because of the bombs. At that time, I felt a heavy weight, a tightness.” 

Before the invasion, Schelokov had cows and goats in his dairy, spread out over three locations on the outskirts of Kyiv. Two of his farms were completely destroyed, including those animals. The guilt that he still feels about that is palpable. He says he has roughly 38 cows and two dozen goats remaining on the third site, where his family home stands. He hopes to grow his herds this year and restore his farms, replacing both animals and destroyed equipment. However, it will be a long project to take on, as his farm is surrounded by landmines. “There is no safety here at all,” he says. 

Schelokov now has to run his goats through nearby forests, which also have landmines. Photography submitted.

Outside help

One of the many difficulties that farmers like Schelokov face is that there’s no way of knowing how many landmines and explosives await them across the country. Humanitarian aid organizations have come into the country to start demining efforts, but there aren’t reliable estimates for the actual mines they face. They only know that the demining work will take years. 

One of those companies is FMC Corporation, a global ag-tech company headquartered in the US, but with offices worldwide. The company is working with The HALO Trust, a humanitarian agency that demines areas in former warzones. FMC will support the HALO team monetarily; 3% of the revenue they generate in Ukraine will go to demining efforts. President and CEO Mark Douglas says the entire FMC team understands that this is simply the beginning of the support it intends to offer. “I think we’ll learn a lot in 2023, in terms of how HALO works and what we need to fund. But as we go through 2024, 2025, 2026 and, hopefully, conditions improve and we get some form of resolution in Ukraine, that’s when the accelerated work will really begin.” 

Landmine Clearance by The HALO Trust team. Photography by Chris Strickland via The HALO Trust.

In addition to financially supporting the demining efforts, FMC shut down its entire operations team in Russia within two weeks of the invasion. Douglas says it was, in part, a humanitarian decision. The company gave all the assets of its plant to the general manager and left. But it was also, in part, a business decision, and it wasn’t an easy one. There were approximately 80 Russian employees that were left behind. There was the financial impact of leaving a market so abruptly—it cost the company roughly $25 million. 

“I’ve never had a discussion before with my president of the [European division] where we were buying satellite phones and bulletproof vests and other equipment for our employees. That’s not the normal course of business,” says Douglas. “When you’re in that discussion, something has to change. Does it feel good? It feels good that we’re doing the right thing for our people. And we’re doing the right thing for the people of Ukraine.”

Photography by Chris Strickland via The HALO Trust

The Ukrainian Agri Council’s Dykun says mines are the major impediment for farmers across the country at this point, followed by a lack of transportation—namely pickup trucks. Lightweight vehicles such as pickups are easy for farmers to operate and transport their grain in, and the Council is now looking for vehicles from Europe or even through the US and Canada that they can transport to Ukraine to aid. 

“For us to leave Ukraine and live somewhere else, it is not our choice,” says Dykun. “It’s very difficult, but it’s not a matter of earning money, it’s a matter of survival. So we are one year in, and we cannot just leave.”  

Even farmers like Schelokov, who are back on their farms, aren’t able to produce much or make money. “There is no profit. I do not make money on the farm. Friends and relatives actually helped me financially, and charitable foundations keep me going. They helped me buy ten more goats and feed.” But between the cost of running his dairy and staying safe (Schelokov’s eldest daughters are in other countries for school, and much of his family is still scattered), there’s no profit to speak of yet. 

Still, he’s back on his farm. For farmers like Mistiuk, there’s not much to do but wait. He estimates that it could take ten or 15 years to get his operation back up and running. His equipment was destroyed, and his fields are full of landmines. “I have acquaintances from Kherson, which was liberated in the autumn, and they told me that they had to pay $200 or $300 for one hectare [of demining]. Imagine paying for my [500] hectares?”

Until then, Mistiuk and his wife and toddler wait in Lviv. Mistiuk takes on odd jobs and has worked at a friend’s farm for now, until he can get back to his own home. And he waits. “I feel that the war has kind of frozen us,” says Mistiuk. “The topic of the war in Ukraine gets less and less attention from the public, and, eventually, the world can forget about us. That is a pity, but still people continue to live. They do not have any choice but to live.”

The post ‘There Is No Safety At All.’ Living and Farming in a War Zone appeared first on Modern Farmer.