31 July 23
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The consequences will be dire for low-income countries, which are particularly vulnerable to rising grain prices on global commodity markets. If Putin is allowed to pursue this strategy, the likely effect will be economic disruption, increased poverty and more disaster-driven migration around the world.
For centuries, Ukraine was referred to as the “breadbasket of Europe.” Since regaining its independence in 1991, Ukraine improved its agricultural efficiency and in 2021-22 was exporting between 3 and 6 million metric tons of grain (corn, wheat and barley) per month. Before the full-scale invasion in early 2022, much of this export was by ship through the Black Sea. This route was initially blocked by Russian forces, but in July 2022, all sides agreed to allow Ukrainian grain exports to resume.
Now, unfortunately, Russia is again blocking that grain export corridor.
Earlier this month, Russian forces destroyed a grain terminal in the port of Odessa, wiping out storage facilities holding enough grain to feed nearly 300,000 people for a whole year. Russia has since blocked the movement of more than two dozen ships that were already loaded with enough Ukrainian grain to feed millions. Russia is not strong enough to conquer Ukraine, but it has enough missiles to close trade in the Black Sea.
Higher grain prices will tend to increase inflation in the U.S., the European Union and other rich countries. But in lower-income countries, the potential impact on food prices and supplies will be sufficient to put perhaps 500 million people at significantly increased risk of hunger (the World Food Program estimated that 345 million people would face food insecurity in 2023, when the Black Sea grain corridor agreement was still in place). Hunger means increased risk of childhood and adult diseases in the poorest countries. And worsening social conditions will create more migration pressures in part of the world.
The Russian international propaganda machine is already hard at work, trying to divert blame for the coming crisis. The leadership in some poorer countries has been credulous enough to think that Putin is still their friend — as seen in the Russia-Africa summit held in St. Petersburg this week. A more realistic interpretation is that Putin and his colleagues want to create chaos and will do anything to strengthen their hand against Ukraine and the Western democracies that support Ukraine.
The U.S., the G7 and the European Union need to prevent food shortages and to keep food prices at a reasonable level. But it is hard to boost agricultural output and exports on short notice — this year’s harvest is already planted in the northern hemisphere. At this point, there is no way to replace Ukrainian exports by sea; there is not enough rail and other land infrastructure in place or that can be built.
The only way to reopen the Black Sea corridor is through a diplomatic agreement with Russia. Pressure from Turkey can help and did help in 2022. But Russia will ignore the West, unless Putin feels that he may be losing support among developing countries. The U.S. and Ukraine’s other allies need a high-level diplomatic initiative, persuading low-income countries to push Russia to allow Ukraine’s grain exports.
If high-income countries provide more money (loans or grants) to low-income countries to buy food, that will just drive up the price of food and wouldn’t solve the problem of a supply shortage.
The world is in a precarious state. Many of the poorest countries are already unable to feed themselves and remain ill-prepared to deal with climate change and extreme weather events. Global poverty has declined in recent decades, but according to the World Bank at least half a billion people still live in extreme poverty.
Putin’s strategy is to hold tens of millions of people hostage by using food as a weapon of war — both in weakening Ukraine’s shattered economy and threatening the global grain markets — to exact an even higher price for Ukraine’s refusal to capitulate. The governments of poorer countries need to demand that Ukrainian grain be allowed to flow freely. The Black Sea corridor must be reopened and kept open as a top priority for all parties working to defeat Putin.
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