(C) Daily Kos This story was originally published by Daily Kos and is unaltered. . . . . . . . . . . Ukraine Update: Global food security depends on Ukraine winning the Battle of the Black Sea [1] [] Date: 2023-10-03 You can read more great Ukraine coverage by both staff and community members here. ------ When John Lyly wrote “all is fair in love and war” in 1578, war was a more brutal business where mass rape, mass starvation of civilians, and wholesale destruction of enemy towns and villages were simply an accepted part of warfare. As more civilized sentiments took root in nations the world over, a gradual recognition took place that warfare where “all is fair” is to no one's benefit, and civilized nations began pledging to protect innocent civilians from harm as much as possible. Vladimir Putin’s government, in so many ways, has missed the memo. The ground war has rightfully taken center stage in the conflict between Ukraine and Russia. The outcome of the battles north of Tokmak will play the greatest role in determining the victor of the Russo-Ukrainian War. However, control of the Black Sea has become a new front in the overall war. In the long term, wresting full control of the Black Sea from Russia would have massive implications for a potential Ukrainian-Crimean campaign. But even now, Russia’s attempts to blockade Ukrainian trade threaten massive famine in developing nations through Africa, the Middle East, and Southwest Asia. And Putin is using that threat of starvation to gain one key concession from the West: to reconnect the Russian State Agricultural Bank to SWIFT, allowing Russia to use that bank as a conduit to evade Western financial sanctions. As such, the Russian Defense Ministry has declared that any commercial vessel headed for Ukrainian ports is subject to attack. Offers to connect a small subsidiary of the State Agricultural Bank to process legitimate payment under the deal (which would have been far less prone to abuse) were refused by Russia, and, without this concession, Russia has refused to revive the Black Sea Grain Deal that allowed Ukraine to export grain through the Black Sea. There are two ways Ukraine can stop this potential man-made famine: accede to Russia’s demands, or drive the Russian navy’s influence out of the Western Black Sea to establish a secure corridor for commercial vessels. ukraine’s role in the global food supply To understand the stakes in the Battle of the Black Sea, it’s necessary to understand the role that Ukrainian food exports plays in world markets. Ukraine is renown for its fertile black soil that produces abundant wheat, corn, barley, soybean oil, sunflower oil, and numerous other food products. Between July 22, 2022, and July 1, 2023, under the Black Sea Grain Initiative Agreement brokered between Ukraine and Russia, over 1,000 ships moved 33 million tons of agricultural food products, most importantly wheat (8.9 million tons) and corn (16.9 million tons). Of that, 725,000 tons of wheat was shipped from Ukraine to Ethiopia, Somalia, and Yemen alone through the United Nations World Food Program (WFP). Then there's the global nature of commodities markets. When Ukrainian wheat is purchased in say, France, it is purchased because it is the cheapest available. If that wheat from Ukraine is unavailable, the French buyer buys the next cheapest ton of wheat—paying a few dollars more to ensure shipment. This creates a global chain reaction where the absence of that Ukrainian wheat in France results in higher-paying customers buying wheat that would’ve ended up in Egypt, which buys a ton of wheat that would’ve ended up in Nigeria, which buys a ton of wheat that would’ve ended in Ethiopia—and so on until (in a global shortage) buyers in the poorest nations are unable to afford any wheat at all. Thus, where the Ukrainian wheat is directly delivered is actually somewhat beside the point. Even if 100% of Ukraine wheat production was bought by France (for example), the inability to deliver any Ukrainian wheat would result in famine in Africa or Southeast Asia. Developed countries may suffer from higher food costs, but they’ll always be able to afford more expensive wheat. Richer countries can pay more to avoid the consequences of shortages, while the poorest countries have no choice but to go hungry. Thus, it’s important to understand that every bit of food that Ukraine exports is key to avoiding a global food shortage. The black sea grain initiative The Black Sea Grain Initiative (aka the Grain Deal) was a parallel set of agreements. One was between Russia, Turkey and the U.N., and another was between Ukraine, Turkey, and the U.N. The goal was for Ukrainian and Russian food and fertilizer exports to travel through the Black Sea unimpeded, preventing the war from adversely affecting the food security of the developing world. From July 22, 2022, to July 13, 2023, the Black Sea Grain Initiative protected any commercial vessels carrying Ukrainian foodstuff for export. These goods would be inspected by Russian inspectors in Turkey to ensure that contraband was not being secretly exported or imported. In return, the U.N. entered into a parallel agreement, through which the Western allies lifted sanctions on two key sectors of Russian exports that impact developing nations’ food security: Russian food and chemical fertilizers. Payments for those exports would not be impeded by sanctions. the problem Russia began signaling its discontentment with the deal almost from the outset, initially suspending its participation in the Grain Deal barely three months after it was first struck, in November 2022, only to resume three days later. Russian noncompliance with the deal took a serious turn on April 29th, 2023, when Russia began ignoring its inspection duties in Turkey. Without inspections, freighters could not proceed to Ukrainian ports. Ukraine and the United States began protesting that Russia was violating the Grain Deal. Why was Russia upset? It appears that Russia expected that to process payments for its food and fertilizer exports, the Russian State Agricultural Bank would be reconnected to SWIFT. SWIFT, or the Society for Worldwide Interbank Financial Telecommunications, is a global network of banks and financial institutions that permit them to securely exchange information, such as payment instructions. Headquartered in Belgium, SWIFT is the primary means by which virtually all major financial institutions globally exchange payment processing information. Disconnection from SWIFT isolates financial institutions internationally, making it difficult for them to process international transactions. Major Russian banking institutions were gradually banned from SWIFT transactions as part of western sanctions between late February and May 2022. Russian banks could then only engage in major international transactions by exchange of cash payments, slowing the verification of transactions and vastly increasing costs. So when Russia entered into the Grain Deal, it became clear that to Russia, “facilitating payment of Russian exports” meant reconnecting its banks to SWIFT. To Russia’s great vexation, the U.N. instead contracted with JPMorgan Chase to craft a secure, bespoke payment processing system that would rapidly and securely process payments for Russian food and fertilizer exports—and only such payments. The U.N. and the U.S. were satisfied this system would meet the conditions of the grain agreement. Russia was unhappy it didn’t get the sanctions-busting abilities it wanted, arguing in late April that the JPMorgan payment system was “no substitute” for being reconnected to SWIFT. That is when Russia suspended its inspection duties. The Ukrainian Foreign Ministry and its allies characterized this Russian activity as “blackmail,” holding global food security hostage as a means for Russia to alleviate or evade Western sanctions, and to strengthen its war efforts. Talks broke down and the Grain Deal was permitted to expire entirely by Russia on July 17, 2023. russia aims to Starve the developing world Within days of the deal’s expiration, Russia began to use its air and naval forces in a multipronged attempt to close the Black Sea to Ukrainian shipping, and to destroy existing infrastructure for storing or shipping Ukrainian foodstuffs for export. Russia first opened with attacks on Ukrainian port infrastructure and Ukrainian grain storage silos and sites. A series of cruise missile strikes from the Russian navy and drone attacks from Crimea targeted facilities along the western Black Sea coastline and grain-export port hubs along the Danube River, such as port facilities at Reni and Izmail, destroying over 270,000 tons of grain, according to Ukrainian authorities. U.N. observers have confirmed the destruction of massive quantities of grain from Russian strikes. Russian patrol boats have engaged in the interception and harassment of freighters. On Aug. 13, 2023, the Russian patrol ship Vasily Bykov fired warning shots at the ​Palau-flagged Turkish freighter Sukru Okan, which was traveling in international waters off the coast of Bulgaria in the western Black Sea, an act that Ukraine characterized as illegal “piracy.” there are no good alternatives to black sea shipping There are not many economically viable alternative routes for Ukraine to bring its grain to market. Exterior view of the grain storage terminal during visit of United Nations Secretary General Antonio Guterres at the Odesa Sea Port, in Odesa, Ukraine, Aug. 19, 2022. Two cargo ships have arrived in one of Ukraine’s ports Saturday, using a temporary Black Sea corridor established by the government. They're the first since Russia’s withdrawal from a wartime agreement designed to ensure safe grain exports from the invaded country’s ports The profit margins are razor-thin when shipping low-cost commodities like grain. The Maritime Executive estimates the cost of rail transport per shipping container to be approximately $2.75 per mile, while it is only $0.80 per mile via maritime shipping. Train transport is by far the cheapest overland transportation method, yet it costs triple compared to maritime transport. One ton of wheat is worth only $345, so transportation over significant ground distances will rapidly consume any profit margin for grain suppliers, making overland transportation economically unviable. Embargos and shipping restrictions were enacted during the Iran-Iraq War back in the 1980s, known as the “First Tanker War” which resulted in the deaths of more than 400 civilian seamen. But oil still continued to flow from both nations as the effects of Iraqi and Iranian attacks on each other’s shipping were blunted by the high economic value of oil. Even as shipments were imperiled, the economic incentives for delivering the oil were high enough to warrant creative overland solutions or justify high costs of shipping insurance. This is simply not the case for large quantities of cheap commodities like grain. Russia need not destroy or interdict every freighter that attempts to enter Ukrainian ports to enforce a de facto embargo, all because of insurance. Even small ocean-going cargo vessels cost around $17 million, so shipping companies will not risk losing their vessels without insurance against loss. Ordinary maritime insurance does not cover loss from acts of war, so Lloyds of London and other British insurance providers have played a vital role in providing insurance coverage against loss for ships at risk from Russian attack. However, those are market-based initiatives conducted in cooperation with the British government, and have been subject to market fluctuations from perceived insurance loss risks. Keeping insurance costs reasonable can only be achieved by minimizing the risks from Russian naval and air attacks. russian offers of “free grain” are no replacement Russia cynically responded to American and Ukrainian criticisms that it is holding global food security hostage by offering what it called an African grain deal to “replace Ukrainian grain” and feed the developing world. In reality, Putin’s offer was aimed at only six nations: Burkina Faso, Zimbabwe, Mali, Somalia, Central African Republic, and Eritrea—the same six African nations who did not vote to expel Russia from the U.N. Human Rights Council and have diplomatically aligned themselves to Russian interests in Africa. For example, Mali, Zimbabwe, and Central African Republic host Wagner mercenary forces and make use of their services, while permitting those same forces to control profits from mineral rights (like gold mines). Vladimir Putin playing games with people’s food security Russian promises to these six nations have varied between offering 25,000-50,000 tons of grain per nation (up to 300,000 tons), to 1 million tons of free or discounted grain. But that offer has not been extended to dozens of other African nations dependent on Ukrainian grain like Libya, Morocco, Uganda, Ivory Coast, or Nigeria. Kenya, Somalia, and Ethiopia were at particular risk of famine, according to the U.N. Commissioner, due to drought conditions in 2023 that have imperiled their food supply, but it is clear that Russian “aid” is not offered based on need. Nor have those benefits been extended to numerous other developing nations that directly depend on Ukrainian grain or other food imports, such as Kazakhstan, Yemen, Uzbekistan, Oman, and Myanmar. Russia is not proposing a major increase in their food exports to cover the shortfall of Ukrainian foodstuffs. Instead, it is proposing providing food that it would already export at a discount to nations that have chosen to embrace Russian influence, and to partially shield those nations from the effects of the coming famine. A million tons of free or discounted grains is a tiny fraction of the combined 50 million+ tons of wheat and corn alone that Ukraine exported annually prior to the war. strategic implications Why does Russia want to trigger a humanitarian crisis? To obtain leverage and try to force the West to negotiate on Russian terms—aka the ceding of Ukrainian territory to Russia. News of the Russo-Ukrainian War “causing” mass starvation in Africa, the Middle East, and Southeast Asia could help drive a narrative in Western media of the broader harm that continuation of the war is causing, and how Ukraine must be willing to accept loss of its territory “for the good of the world.” The fact that this is a cynical and deliberate ploy on Russia’s part to murder thousands of innocent children and civilians by starving them of food is largely irrelevant. Russia is already setting up to sell a very specific narrative. The war is causing disruptions to global food security, so only by ending the war can this famine be ended. Russia cannot be blamed for the famine, as Russia is providing free grain and trying its best to help the developing world. The Ukrainian grain deal meant shipping food mostly to Europe, and Russia’s cancellation of the grain deal isn’t to be blamed for the crisis. America and Europe should be blamed for triggering the crisis because of their outrageous refusal to abide by the conditions of the Grain Deal (which, according to Russia, means reconnecting its banking system to SWIFT). Thus, Russia aims to “win” in one of two ways: 1. By triggering a massive humanitarian food crisis in the developing world that forces Ukraine and the West to the negotiating table, or 2. By forcing the West to lift some financial sanctions, reconnect Russia’s banking to SWIFT, and fuel Russia’s war efforts financially. Even if the West were to meet Russian demands (reconnect the State Bank to SWIFT and lift financial sanctions on various products), Russia could then escalate its demands a few weeks or months later, leading to another round of lifting sanctions, or even Russian threats to starve the developing world. The only alternative is a combination of military, financial, and information condition-setting efforts. Ukraine needs to win the Battle of the Black Sea, and demonstratively prevent Russian air and naval assets from operating near or striking the western Black Sea. Ukraine needs the weapons and military assistance that can give them the capability to strike Russian air and naval assets in Crimea, preventing Russian forces from operating from within striking range of the western Black Sea. Ukraine needs adequate air and drone defense systems to protect its Black Sea and Danuban grain port facilities against Russian attacks. The West needs to support British insurers to facilitate (and, if necessary, subsidize) insurance on freighters against wartime losses to allow merchant vessels to provide shipping to Black Sea and Danuban grain ports. If push comes to shove, the Western allies might consider an arrangement like that of the Merchant Marine during World War II, where the Allies temporarily leased private merchant shipping vessels. Western allies could, in theory, fund the Ukrainian government’s temporary leases of private shipping vessels. Ukraine would take on the full financial risk of wartime loss while the ships traverse the Black Sea to obtain the grain. The temporary lease would expire when the ships return to the Bosporus, where private shipping companies would take on the remaining task of shipping the grain to their intended destinations—freeing shipping companies from the financial risks of wartime loss entirely. Finally, the West needs to do a better job of communicating the reality of the story to the world. The truth of the Grain Deal is, as noted above, quite complicated. When the economic, diplomatic, and military situation is fully understood, the evil nature of Russia’s plan is quite apparent. But the West needs to sell the justice of its cause in easy-to-understand soundbites that can be digested by the average person in 30 seconds or less. When it comes to this, the West is falling behind Russian disinformation yet again. Whether it takes official government channels, the media, or social media groups like NAFO, I hope that the crucial moral, diplomatic, economic, and military necessity of Ukraine’s victory in the Black Sea is understood by all. [END] --- [1] Url: https://www.dailykos.com/stories/2023/10/3/2196511/-Ukraine-Update-Global-food-security-depends-on-Ukraine-winning-the-Battle-of-the-Black-Sea?pm_campaign=front_page&pm_source=top_news_slot_11&pm_medium=web Published and (C) by Daily Kos Content appears here under this condition or license: Site content may be used for any purpose without permission unless otherwise specified. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/dailykos/