Russia wins grain deal

The grain deal, which Russia withdrew from back in July, is unlikely to find a second life. It seems that the “Black Sea Initiative” has come to such a finale as a result of the completed talks between Vladimir Putin and Recep Tayyip Erdogan in Sochi. The only thing that the leaders of Russia and Turkey have certainly managed to agree on is that Moscow will fulfill its obligations to the poorest African countries. And he will supply them with 1 million tons of grain. However, here domestic farmers who do not particularly like to do charity work have numerous questions.

As it became known following the talks between the two leaders, a special route has been developed for the supply of crops to the African continent. Moscow ships one million tons of grain to Turkey at a reduced price. There it is processed into flour. And already from Turkey, products are sent by sea to Africa, and Qatar pays for the transportation itself.

According to Vladimir Putin, Russia does not consider these grain deliveries as an alternative to the grain deal. “But on our part, this is a huge contribution to solving the food problems of African countries,” he stressed.

And presidential press secretary Dmitry Peskov added that the delivery dates have not yet been determined. But Russia is already shipping 25-50 thousand tons of grain free of charge, in particular, to Zimbabwe, Burkina Faso, Somalia and Eritrea.

The head of the Russian Grain Union, Arkady Zlochevsky, said at a press conference “on the occasion” that the grain deal ended in victory for Russia. The damage it caused to domestic producers has stopped. He clarified that in June, before the termination of the deal, Russian grain was sold at $240 per ton, and, for example, French grain at $257.

However, agrarian experts with whom we managed to talk have questions about a million tons of “free grain”. Which is quite natural, because the documents have not been published, so far only general declarations of intent have been heard from diplomats.

The collective opinion of the analysts interviewed by MK can be reduced to the following aspects. At the recent summit between Russia and African countries, it was discussed that we will donate 25-50 thousand tons of grain to six countries of the continent free of charge. It turns out, 200-300 thousand tons. Moreover, the leaders of some states in the same place, at the summit, declared that they were ready to pay for these purchases.

Now we are talking about a significantly larger volume – a whole million tons and for free. It is also unclear why (and under what conditions) Russia is transferring grain to Turkey for processing into flour. There is no point in this. Our milling industry is quite capable of doing this on its own, and recently we have significantly increased our flour exports abroad.

“Turkey will not process anything for free, especially the volume of a million tons. From the statements made, we can conclude that Russia will have to pay for this service,” one of the agrarian experts said on condition of anonymity.

And finally, the scheme itself with the participation of Turkey and Qatar raises questions among farmers. According to the interlocutors, in recent decades, the practice of free delivery of food to poor countries has been widely used in the world. But it was carried out under the auspices of the UN. The organization created a special fund in which funds were accumulated, food was purchased and delivered to certain countries in need. “This is a normal practice that must be followed,” the same interlocutor believes.

Recall that the grain deal was concluded in Istanbul on July 22 last year. And it meant the fulfillment of six requirements from the Russian side. The main ones are the connection of the Russian Agricultural Bank to the SWIFT system for mutual settlements between countries, the lifting of the ban on the export of Russian mineral fertilizers, the supply of imported agricultural machinery and components … None of these and other requirements of Moscow were met. The grain deal can be resumed today at any moment, but after the fulfillment of our conditions. So far, the world community is in no hurry to do so.

What does Russia gain in the end by refusing, at least at this stage, to extend the “Black Sea Initiative”?

“Even before the end of the grain deal on July 18, the Russian Grain Union spoke rather negatively about its extension,” says Nikita Maslennikov, a leading expert at the Center for Political Technologies. – From the point of view of the economy, it did not give us anything. Russia’s demands were not taken into account, we had to look for alternative options, which led to additional costs. According to some estimates, they amounted to a billion dollars, which was a significant burden for Russian farmers.

Thus, Russia’s position on this issue is confident and constructive. We are ready to return to the “Black Sea Initiative” if our conditions for the SWIFT system, ship insurance and other items are met.

As for our obligations to export grain to the poorest countries, they will be fulfilled. Vladimir Putin instructed the government to expedite the study of the issue of supplying, in fact, free grain. They can already start in 2-3 weeks. Moscow reaffirms its positions and humanitarian plans, but implements them not through a grain deal, but through other channels.