World Trade Institute
Farmers in Ukraine need confidence to produce for Africa
Improving global food security is one of the UN Sustainable Development Goals. However, Russia’s war of aggression against Ukraine shows how trade insecurity can destroy food security. The Word Trade Institute (WTI) at the University of Bern has been monitoring Ukraine’s grain exports, which are so important for Africa, since February. Now it is formulating demands.
“Our figures speak for themselves,” says Christian Häberli, lecturer at WTI, as he looks at the tables and statistics on the table in front of him. Together with a Ukrainian grain trade specialist in Kyiv, every month he monitors how the Ukrainian-African grain trade has deteriorated due to the Russian invasion of Ukraine.
The new WTI program was created following a call from the EU Commission in March 2022 for all EU-funded research projects to study the war of aggression and to include Ukrainian researchers in their projects. Since 2021, the WTI has been one of the 14 partners of the EU-funded Horizon 2020 program MATS (Making Agricultural Trade Sustainable). The aim of this program is to identify leverage points for changes in agricultural trade practices and to show the positive and negative effects they have on sustainable development and the right to food as guaranteed by the UN Treaty.
The WTI has maintained an intense exchange with Ukraine for many years and is therefore well acquainted with its institutions and trading systems. Ukrainian doctoral student Yuliia Kucheriava has helped in the preparation of the project. Several Ukrainians who hold important positions in their home country or in the WTO were also trained at the WTI.
The data collected shows very impressively how massively Ukraine’s agricultural exports, especially those via the Black Sea route to North Africa, are suffering as a result of the acts of war. The United Nations fears food shortages and hunger in poor parts of the world if Ukraine is eliminated as a major grain and vegetable oil supplier.
No "weaponisation of trade"
The third survey in August showed the impact of the agreement that Russia and Ukraine had signed with the United Nations and Turkey at the end of July. In September and October, four million tons of grain each were exported directly to Africa and the Middle East by sea. These include ships of the United Nations World Food Programme. “The agreement made it possible to stop Russia using the grain trade as a weapon of war, at least for the time being. This is a major achievement that must be acknowledged accordingly,” says Häberli. On November 19, the agreement was extended for 120 days after Russia had threatened to terminate it on several occasions. However, Russia continues impeding Ukrainian ship passage at the Bosporus. The problems are far from solved.
Feeling of discouragement looms
Data collected by the WTI shows that the reopening of the Black Sea route meant that only part of the 2021/22 Ukrainian harvest could be removed. The damage to the agricultural and transport infrastructure is severe, and transport via other routes is not working. Processing, transport and domestic consumption were also seriously disrupted.
The quality of the harvest suffers if it remains in unsuitable transit warehouses for too long – it can then only be used as animal feed. According to the Ukrainian Ministry of Agriculture, this will affect already the sowing of winter grain in 2022/23, explains Christian Häberli: “If farmers don’t believe that they can sell their products at a cost-covering price, they will grow less and trade will come to a standstill. This is also a major threat to world food security.”
This lack of trade security can exacerbate Africa’s food security problem in the short and medium term. World market prices could rise again and thus hit particularly hard the poorer consumers in Africa. In addition, in the medium to long term, production in Ukraine, which until now had no subsidies or support from abroad, will become even more difficult.
Ukraine is also called the “Bread Basket of Africa”. If it is no longer able to fulfill this task, other providers will step in. After all, Ukraine is an important player in global agricultural trade, but it is not irreplaceable. It can take many years to regain lost market share.
West causes damage with subsidies
The weakening of Ukraine as a food exporter – especially maize, wheat, barley and sunflower oil, but also fertilisers that are urgently needed worldwide – also brings to light other, deeper problems of the WTO. Häberli emphasises: “The WTO is unable to prevent other countries – notably from Western Europe or North America – which are able to produce more cheaply due to their agricultural subsidy structures and export risk insurance schemes, from jumping into the gap.” Under what is referred to as the Doha Round, poor developing countries called for better market access for their agricultural products by reducing or banning agricultural dumping, particularly by industrialised countries. These negotiations failed in 2008. Since then, nothing has been done in this regard. And export restrictions and prohibitions remain in force and lead to inefficient production structures.
According to Häberli, there is a lack of willingness to commit to measures to strengthen global food security through sustainable agricultural trade. For example, poor farmers in importing countries could be better protected and encouraged to boost domestic production.
Immediate action required
The monthly reports of the Bern-based MATS sub-project are attracting a great deal of attention from the authorities and the agricultural sector in Kyiv. Against the backdrop of the challenges described and based on its own data collection, the WTI also sent letters in July to the five largest grain exporters from Ukraine, all based in Switzerland, and in September to the G7 countries. It called on them to act responsibly. For example, Ukraine’s agricultural and trade infrastructure must be restored as quickly as possible. What is needed now is a kind of stock-taking in which all operators are involved – large and small farmers, the manufacturing industry such as mills and oil presses, lenders and insurers, (fuel) traders and transport companies. This is the only way to get a quick overview of the extent of damage to transport routes, train stations and storage facilities, especially in the vicinity of deep sea ports. The research team recommends an overall view of what needs have arisen along the entire supply chain and where. This is the only way farmers would be able to shoulder the risk of winter sowing in spite of a continuing war. To this end, it calls for a “master plan” to efficiently and pragmatically drive forward the repair of the production and trade infrastructure. Otherwise, Ukraine, a major producing country with its huge, fertile cultivation areas, will face irreparable market share losses.
Such a master plan would be crucial for Ukraine’s reconstruction and safeguarding food security in Africa, in addition to ensuring open and safe transport routes across the Black Sea. “Ukrainian agriculture is not subsidised like ours. Above all, the farmers now need confidence and courage to assume that it is worthwhile to invest and produce again,” concludes Christian Häberli.
Editor’s note: This article was last updated on 23 February 2023. War impacts on the situation after this date could not be taken into account.
CALL FOR ACTION
Eating grain instead of using it for feed
Half of the grain needed for the UN World Food Programme has so far come from Ukraine. In addition, in Western countries, agricultural land is often used for livestock farming or feed production – and not for a country’s own food production. In Switzerland, fodder is grown on a large proportion of arable land. Nevertheless, feed must also be imported for Swiss livestock. So even wealthy countries depend on imports.
“The attack on Ukraine significantly increases the pressure for action to rapidly transform the global food system,” stresses political scientist Lukas Fesenfeld from the Oeschger Centre for Climate Change Research (OCCR) at the University of Bern. Already in March, more than 600 scientists called at an international level for a transformation of the food system. Shortly afterwards, Fesenfeld initiated an open letter to the German government, which attracted a great deal of attention, and formulated detailed policy recommendations in a report in September.
The researchers believe it is necessary to reduce meat consumption, increase domestic production of plant-based foods and avoid food waste. This would stabilize the food system, reduce dependencies – and it is urgently needed to curb global warming.
New magazine uniFOKUS
Subscribe free of charge now!
This article first appeared in uniFOKUS, the new University of Bern print magazine. Four times a year, uniFOKUS shows what academia and science are capable of. Thematically, each issue focuses on one specialist area from different points of view and thus aims to bring together as much expertise and as many research results from scientists and other academics at the University of Bern as possible.
The online magazine of the University of Bern
Subscribe to the uniAKTUELL newsletter
The University of Bern conducts cutting-edge research on topics that concern us as a society and shape our future. In uniAKTUELL we show selected examples and introduce you to the people behind them – gripping, multimedia and free of charge.