The Ukraine-Russian War and Agriculture
Gearóid Ó Loingsigh
11 March 2022
Farmers harvesting wheat in Ukraine.
The war between Russia and Ukraine has provoked a global crisis in the energy markets as well as the agricultural market. The European Union is concerned about the increase in gas and oil prices and the announcement by Ukraine to suspend the exporting of cereals and the embargo placed on the exportation of Russian cereals has led to a food crisis.
Various countries have announced measures to plant more cereals to make up for the lack of access to the Russian and Ukrainian markets. The prices of grains and flour has increased and some sectors have begun to experience certain difficulties. These problems are partly caused by the war, but more so by the just in time production model that dominates all markets, both industrial, agricultural and food markets.
In the USA cereal production is concentrated in just a handful of states and companies. At a global level we can see that there is also a concentration in the production of cereals. In 2020, Ukraine had 6,564,00 Hectares(1) of land planted with wheat which produced 24,912,350 tonnes and Russia had 28,864,312 Ha. with a yield of 85,896,326 tonnes. It is a significantly large yield bearing in mind that the 27 countries of the EU have only 22,876,730 Ha. and an output of 126,658,950 tonnes. Globally there are 219,006,893 Ha. with a yield of 760,925,831 tonnes. However, a large part of that is for internal consumption. However, Russia and Ukraine exported a significant chunk of their wheat. In 2020 Russia exported 37,267,014 tonnes, a third of its crop and Ukraine exported 18,055,673 tonnes, with corn being its main export grain.
Russia is the largest wheat exporter in the world and Ukraine the fifth. If we look at other cereals, we can see a similar concentration in these two countries where they are also important players. This happens with barley and vegetable oils and the sanctions are increasing the cost of living for Europeans.
What the European governments are seeing now is that they depend on Russia and Ukraine for the supply of large quantities of cereals and now, in the midst of a war, that supply is in danger, on the one hand due to the war and on the other due to the sanctions they themselves imposed without thinking it through. Now in the midst of war several governments have announced they want to promote the growing of cereals and other products, crops that they used to grow, but no longer do so due to specialisation and the misnomer of comparative advantage.
However, it is a problem not just for Europeans but Latin America. From the 1990s onwards, governments in blind faith, implemented neoliberal doctrines and their agriculture output is highly specialised and where they used to grow foodstuffs, now they have cash crops. In the Covid-19 pandemic we saw how food imports increased and at the same time there was a fall in the demand for their cash crops.
The neoliberal model received its first hit with the pandemic, they saw that they had transferred the production of gloves, masks, oxygen tanks and medicines to other parts of the world and suddenly found themselves at the mercy of the market and in passing the goodwill of some countries such as China and India who could have caused a greater crisis by cutting off the supply of medicine and oxygen tanks, amongst other things.
The war has shown us that food sovereignty and security are essential to the welfare of a country. And if it is so in the midst of a war, why do Latin American countries have to hand it over in times of peace?
We will have no cereals but palm oil and asparagus that no one wants to buy. If a lack of access to just two markets can cause a food crisis in Europe, imagine what it can do in Latin America.
Notes
(1) All figures taken from
https://www.fao.org/faostat/en/#home