IT’S PARTIALLY ABOUT CONTROL OVER UKRAINE'S VAST
AGRICULTURAL
SECTOR
Executive
Summary:
- Agro giants such as MONSANTO and CARGILL grab 1.6 million hectares of fertile, arable land in the UKRAINE
- Most important UKRAINIAN ministries were granted to foreign-born individuals who received UKRAINIAN citizenship
- Takeover of UKRAINIAN economy by the west?
- Move against pro – RUSSIAN interests?
- True objectives of the IMF and the WORLD BANK in the UKRAINE
- Did the ASSOCIATION AGREEMENT between UKRAINE and the EUROPEAN UNION ignited the conflict that ousted YANUKOVYCH?
- The UKRAINIAN agricultural sector has been a prime target for foreign private investment
- Agro giant’s next step: “takeover” of UKRAINE’S infrastructure and SHIPPING
- The EU ASSOCIATION AGREEMENT and the ARTICLE 404 clause creates an opening to bring GM products into EUROPE
At the same time as the
UNITED STATES, CANADA and the EUROPEAN UNION announced a set of new sanctions
against RUSSIA in mid-December last year, UKRAINE received US$350 million in US
military aid, coming on top of a $1 billion aid package approved by the US
Congress in March 2014.
MOST
IMPORTANT UKRAINIAN MINISTRIES WERE GRANTED TO FOREIGN-BORN INDIVIDUALS WHO
RECEIVED UKRAINIAN CITIZENSHIP
WESTERN governments'
further involvement in the UKRAINE conflict signals their confidence in the
cabinet appointed by the new government earlier in December 2014. This new
government is unique given that three of its most important ministries were
granted to foreign-born individuals who received UKRAINIAN citizenship just
hours before their appointment.
The Ministry of Finance
went to NATALIE JARESKO, a US-born and educated businesswoman who has been
working in UKRAINE since the mid-1990s, overseeing a private equity fund
established by the US government to invest in the country. JARESKO is also the
CEO of HORIZON CAPITAL, an investment firm that administers various WESTERN
investments in the country.
TAKEOVER
OF UKRAINIAN ECONOMY BY THE WEST?
As unusual as it may
seem, this appointment is consistent with what looks more like a takeover of
the UKRAINIAN economy by WESTERN interests.
In two reports - "The Corporate Takeover of UKRAINIAN
Agriculture" and
"Walking on the West Side: The WORLD BANK and
the IMF in the UKRAINE Conflict" - the Oakland Institute has
documented this takeover, particularly in the agricultural sector.
THE
TRUE OBJECTIVES OF THE IMF AND THE WORLD BANK IN THE UKRAINE
A major factor in the
crisis that led to deadly protests and eventually to president VIKTOR
YANUKOVYCH'S removal from office in February 2014 was his rejection of a
EUROPEAN UNION Association agreement aimed at expanding trade and integrating
UKRAINE with the EU - an agreement that was tied to a US$17 billion loan from
the International Monetary Fund (IMF).
After the president's
departure and the installation of a pro-WESTERN government, the IMF initiated a
reform program that was a condition of its loan with the goal of increasing
private investment in the country.
The package of measures
includes reforming the public provision of water and energy, and, more
important, attempts to address what the WORLD BANK identified as the
“structural roots” of the current economic crisis in UKRAINE, notably the high
cost of doing business in the country.
Background
Information: THE IMF AND WORLD BANK
IMF DOCTRINES AND
ITS GEOPOLITICAL IMPACT
Chronicle of a debt foretold: IMF & Argentina
THE
UKRAINIAN AGRICULTURAL SECTOR HAS BEEN A PRIME TARGET FOR FOREIGN PRIVATE
INVESTMENT
and is logically seen by
the IMF and WORLD BANK as a priority sector for reform. Both institutions
praise the new government's readiness to follow their advice.
For example, the
foreign-driven agricultural reform roadmap provided to UKRAINE includes
facilitating the acquisition of agricultural land, cutting food and plant
regulations and controls, and reducing corporate taxes and custom duties.
The
stakes around UKRAINE'S vast agricultural sector - the world's third-largest
exporter of corn and fifth-largest exporter of wheat - could not be higher. UKRAINE
is known for its ample fields of rich black soil, and the country boasts more
than 32 million hectares of fertile, arable land - the equivalent of one-third
of the entire arable land in the EUROPEAN UNION.
The
maneuvering for control over the country's agricultural system is a pivotal
factor in the struggle that has been taking place over the last year in the
greatest EAST-WEST confrontation since the Cold War.
Background
Information: AGRICULTURE BUSINESS
SHARE OF THE
COMMODITY CAKE
INTERNATIONAL AGRO
CORPORATIONS GAIN RECORD EARNINGS IN LATAM AGRO INDUSTRY
AGRO
GIANTS SUCH AS MONSANTO AND CARGILL GRAB 1.6 MILLION HECTARES OF FERTILE,
ARABLE LAND IN THE UKRAINE
The presence of foreign
corporations in UKRAINIAN agriculture is growing quickly, with more than 1.6
million hectares signed over to foreign companies for agricultural purposes in
recent years. While MONSANTO, CARGILL, and DUPONT have been in UKRAINE for
quite some time, their investments in the country have grown significantly over
the past few years.
CARGILL is involved in
the sale of pesticides, seeds and fertilizers and has recently expanded its
agricultural investments to include grain storage, animal nutrition and a stake
in UKRLANDFARMING, the largest agribusiness in the country.
Similarly, MONSANTO has
been in UKRAINE for years but has doubled the size of its team over the last
three years. In March 2014, just weeks after YANUKOVYCH was deposed, the
company invested $140 million in building a new seed plant in UKRAINE.
DUPONT has also expanded
its investments and announced in June 2013 that it too would be investing in a
new seed plant in the country.
NEXT
STEP: “TAKEOVER” OF UKRAINE’S INFRASTRUCTURE AND SHIPPING
WESTERN corporations have
not just taken control of certain profitable agribusinesses and agricultural
activities, they have now initiated a vertical integration of the agricultural
sector and extended their grip on infrastructure and shipping.
For instance, CARGILL now
owns at least four grain elevators and two sunflower seed processing plants
used for the production of sunflower oil. In December 2013, the company bought
a “25% +1 share” in a grain terminal at the BLACK SEA port of NOVOROSSIYSK with
a capacity of 3.5 million tons of grain per year.
All aspects of UKRAINE'S agricultural
supply chain - from the production of seeds and other agricultural inputs to
the actual shipment of commodities out of the country - are thus increasingly
controlled by WESTERN firms.
MOVE
AGAINST PRO – RUSSIAN INTERESTS
EUROPEAN institutions and
the US government have actively promoted this expansion. It started with the
push for a change of government at a time when president YANUKOVYCH was seen as
pro-RUSSIAN interests. This was further pushed, starting in February 2014,
through the promotion of a “pro-business” reform agenda, as described by the US
Secretary of Commerce PENNY PRITZKER when she met with Prime Minister ARSENLY
YATSENYUK in October 2014.
THE
ASSOCIATION AGREEMENT BETWEEN UKRAINE AND THE EUROPEAN UNION IGNITED THE
CONFLICT THAT OUSTED YANUKOVYCH
The EUROPEAN UNION and
the UNITED STATES are working hand in hand in the takeover of UKRAINIAN
agriculture. Although UKRAINE does not allow the production of genetically
modified (GM) crops, the ASSOCIATION AGREEMENT between UKRAINE and the EUROPEAN
UNION, which ignited the conflict that ousted YANUKOVYCH, includes a clause
(Article 404) that commits both parties to cooperate to “extend the use of
biotechnologies” within the country. (MONSANTO has been trying to get a
foothold regarding GM products in EUROPE for some time now)
THE
EU ASSOCIATION AGREEMENT AND THE ARTICLE 404 CLAUSE CREATES AND OPENING TO
BRING GM PRODUCTS INTO EUROPE
This clause is surprising
given that most EUROPEAN consumers reject GM crops. However, it creates an
opening to bring GM products into EUROPE, an opportunity sought after by large
agro-seed companies such as MONSANTO.
Background
Information: MONSANTO
EU SUCCUMBS TO U.S. PRESSURE ON
GM CONTAMINATION -
INDUSTRY SPENT OVER HALF A
BILLION LOBBYING FOR PRO-GMO POLICIES IN PAST DECADE.
MONSANTO PROFIT,
POWER AND GEOPOLITICS
MONSANTO – “GLOBAL
MONSTER CORPORATION”?
MILITARY STYLE
TRADE WARS, GOVERNMENT CORRUPTION
Opening up UKRAINE to the
cultivation of GM crops would go against the will of EUROPEAN citizens, and it
is unclear how the change would benefit UKRAINIANS.
It is similarly unclear
how UKRAINIANS will benefit from this wave of foreign investment in their
agriculture, and what impact these investments will have on the seven million
local farmers.
Once they eventually look
away from the conflict in the EASTERN "pro-RUSSIAN" part of the
country, UKRAINIANS may wonder what remains of their country's ability to
control its food supply and manage the economy to their own benefit.
As
for US and European citizens, will they eventually awaken from the headlines
and grand rhetoric about RUSSIAN aggression and human rights abuses and
question their governments' involvement in the UKRAINE conflict?
Adapted by Geopolitical
Analysis and Monitoring from the original article written by Frederic Mousseau -
Policy Director at the Oakland Institute.
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