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Has the Russia-Ukraine grain deal worked?

  • March 18, 2023

For five months following Russia’s invasion last year, Ukraine —  a leading producer of grains and other agricultural products — could not export those goods to the world. The Russian blockade of Ukraine’s ports meant a vital artery of the global food system was blocked.

This was potentially catastrophic for the world’s poorest nations due to the grain shortage and resulting surge in prices, food security experts warned. Russia and Ukraine eventually reached an agreement in July, brokered by Turkey and the UN, to end the blockade. The ‘Black Sea Grain Initiative’ has not all been smooth sailing, but it has largely held, despite Russian threats to withdraw.

That deal is due to expire on March 18. Negotiations to renew it are ongoing, with Russia saying earlier this week it was willing to extend the agreement for 60 days — half the 120 days it agreed when the deal was previously renewed last November.

Moscow says it is not willing to go further due to restrictions on its own agricultural exports. Although Russia’s food exports have not directly been sanctioned, Russian officials says secondary sanctions on logistics and insurance have made it difficult for the country to export. Moscow has been signalling discontent on this point for months.

What’s the deal?

William Moseley, professor of geography at Macalester College and a member of the UN High Level Panel of Experts for Food Security and Nutrition, says it is true that Russia has struggled to export fertilizers under the deal. But the country’s wheat exports have doubled, he points out, suggesting they are doing “very well”.

A crew member prepares a grain analysis for a control made by members of the Joint Coordination Center (JCC) onboard the Barbados-flagged ship
During the war in Ukraine, wheat shipments out of the country helped calm volatility in global grain marketsImage: Yasin Akgul/AFP

This highlights the complexity around analyzing the Black Sea Grain Initiative eights months after it was first agreed.

The grain deal had “contributed to lowering the global cost of food and has offered critical relief to people,” UN Secretary-General Antonio Guterres said earlier this month, while in February World Food Programme (WFP) director David Beasley said that its renewal was “critical”.

Bernard Lehmann, a veteran food security expert and chairman of the UN High Level Panel of Experts for Food Security and Nutrition, told DW that the grain deal has had a significant impact on alleviating hunger in parts of north and east Africa, as well as in the Middle East and Asia.

“Without the deal, there would have been a shortage of grain for these imports, and prices in general would have risen even more, making the purchase of wheat from other countries very, very expensive,” he said. “So, the deal generally calmed the market and the countries mentioned above benefited from that.” 

Moseley describes the deal as a “qualified success” as it contributed to an 8% fall in international grain prices since March and allowed Ukraine to open up storage capacity and keep producing. “The deal may mostly be considered successful if the goal was to calm fears and stabilize grain prices,” he said.

He points out that grain prices are not back to pre-war levels yet and says that the deal underlined how vulnerable certain African countries are to grain import supply disruptions and price volatility. He says countries which produced their own grains, including traditional small grains such as millet and sorghum, fared much better during the recent crisis.

Global food crisis: A world going hungry? | DW Business Beyond

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“More localized production of a diversity of grains across several African countries is the best long- term solution,” he said. “The food crisis is also most acute in areas impacted by conflict, for example Somalia and Yemen. This deal cannot help in those situations, although the World Food Programme, which helps in emergency food situations, has historically sourced a lot of its grain from Ukraine.”

Friederike Greb, from the World Food Programme, says the Black Sea Grain Initiative has been “highly successful”, pointing out that 24.5 million tons of grain have been shipped since it came into operation.

“Ukraine is a key supplier for the World Food Programme,” she said. “It’s the biggest in 2022, and was the biggest in terms of wheat in 2021. In that sense, for food security, the initiative is absolutely critical.”

Grain for the rich?

A persistent criticism of the grain deal is that richer nations, including many across the EU, received more grain from Ukraine after the blockade ended than countries in poorer regions.

This is true, Moseley says. But a lot of what was shipped out via the initiative was corn, not wheat. The main point of the grain deal, he adds, was how it impacted international grain markets, moreso than the flow of the Ukrainian grain itself.

“What is most important is that the grain goes on the market. More grain on the market, plus the calming of fears, puts downward pressure on grain prices which benefits everyone, but especially poorer, more food insecure countries which are net grain importers,” he said.

Greb agrees. “Even if the ship goes to Europe, then the European country who gets that grain doesn’t purchase what you could think of the global pot, So there’s less demand on the global side and that means someone else can buy it.”

Symbolbild: Getreidefelder in der Ukraine
According to the World Food Programme, 382 million people in 82 countries are facing acute food insecurityImage: Sergey Bobok/AFP/Getty Images

Renewal of the deal is not enough in the long-term

The focus now is on getting the deal renewed for the coming months.The World Food Programme’s Friederike Greb says it is “absolutely critical” that the deal is renewed. She says that even though the deal has stabilised food prices, they remain at a very high level compared with pre-pandemic levels, and that ending the deal could provoke a price surge crisis that would cripple low-income countries.

Lehmann says that a failure to renew would lead to massive price increases, which would heap further pressure on food insecure parts of the world. The World Food Programme says there are currently 382 million people facing acute food insecurity in 82 countries around the world, describing the current situation as a “global hunger crisis of unprecedented proportions.”

He is confident that it is in Russia’s interests to renew the deal. Moseley agrees, saying Moscow may see it as a way of garnering favor with its allies in Africa.

However, he emphasizes that while renewing the grain deal is beneficial in the short term, it does not address the structural problem of too many poor countries being dependent on a narrow range of grains, namely wheat, maize and rice, from a handful of suppliers.

“Longer term,” he said, “we need a more resilient global food system fed by a broader range of grains from more diverse sources.”

Edited by: Kristie Pladson

Article source: https://www.dw.com/en/has-the-russia-ukraine-grain-deal-worked/a-64991953?maca=en-rss-en-bus-2091-xml-atom

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