“Ukraine’s agriculture could be a real gold mine.” – U.S.-Ukraine Business Council
Behind the U.S.-backed coup that ousted the democratically-elected president of Ukraine are the self-serving predatory interests of giant corporations – from Cargill to Chevron to Monsanto – and vulture capitalists which see the country as a potential “gold mine” of profits from the plunder of its rich agricultural and energy resources, as JP SOTTILE* documents in consortiumnews.com. This underlies the sharpness of the inter-imperialist contradictions over control of Ukraine as well as the crimes being carried out by the big powers of the U.S. and Europe against the Ukrainian people. Canadians should firmly reject this meddling in Ukraine’s affairs as they can no doubt extrapolate that the same process in the Ukraine is also being carried out by the imperialists in our country and elsewhere.**
(March 16) – ON JANUARY 12, a reported 50,000 “pro-Western” Ukrainians descended upon Kiev’s Independence Square to protest against the government of President Viktor Yanukovych. Stoked in part by an attack on opposition leader Yuriy Lutsenko, the protest marked the beginning of the end of Yanukovych’s four year-long government.
That same day, the Financial Times reported a major deal for U.S. agribusiness titan Cargill.
Despite the turmoil within Ukrainian politics after Yanukovych rejected a major trade deal with the European Union just seven weeks earlier, Cargill was confident enough about the future to fork over $200 million to buy a stake in Ukraine’s UkrLandFarming. According to Financial Times, UkrLandFarming is the world’s eighth-largest land cultivator and second biggest egg producer. And those aren’t the only eggs in Cargill’s increasingly-ample basket.
On Dec. 13, Cargill announced the purchase of a stake in a Black Sea port. Cargill’s port at Novorossiysk — to the east of Russia’s strategically significant and historically important Crimean naval base — gives them a major entry-point to Russian markets and adds them to the list of Big Ag companies investing in ports around the Black Sea, both in Russia and Ukraine.
Cargill has been in Ukraine for over two decades, investing in grain elevators and acquiring a major Ukrainian animal feed company in 2011. And, based on its investment in UkrLandFarming, Cargill was decidedly confident amidst the post-EU deal chaos. It’s a stark juxtaposition to the alarm bells ringing out from the U.S. media, bellicose politicians on Capitol Hill and perplexed policymakers in the White House.
It’s even starker when compared to the anxiety expressed by Morgan Williams, President and CEO of the U.S.-Ukraine Business Council — which, according to its website, has been “Promoting U.S.-Ukraine business relations since 1995.” Williams was interviewed by the International Business Times on March 13 and, despite Cargill’s demonstrated willingness to spend, he said, “The instability has forced businesses to just go about their daily business and not make future plans for investment, expansion and hiring more employees.”
In fact, Williams, who does double-duty as Director of Government Affairs at the private equity firm SigmaBleyzer **, claimed, “Business plans have been at a standstill.”
Apparently, he wasn’t aware of Cargill’s investment, which is odd given the fact that he could’ve simply called Van A. Yeutter, Vice President for Corporate Affairs at Cargill, and asked him about his company’s quite active business plan. There is little doubt Williams has the phone number because Mr. Yuetter serves on the Executive Committee of the selfsame U.S.-Ukraine Business Council. It’s quite a cozy investment club, too.
According to his SigmaBleyzer profile, Williams “started his work regarding Ukraine in 1992” and has since advised American agribusinesses “investing in the former Soviet Union.” As an experienced fixer for Big Ag, he must be fairly friendly with the folks on the Executive Committee.
Big Ag luminaries
And what a committee it is — it’s a veritable who’s who of Big Ag. Among the luminaries working tirelessly and no doubt selflessly for a better, freer Ukraine are:
–Melissa Agustin, Director, International Government Affairs & Trade for Monsanto
–Brigitte Dias Ferreira, Counsel, International Affairs for John Deere
–Steven Nadherny, Director, Institutional Relations for agriculture equipment-maker CNH Industrial
–Jeff Rowe, Regional Director for DuPont Pioneer
–John F. Steele, Director, International Affairs for Eli Lilly & Company
And, of course, Cargill’s Van A. Yeutter. But Cargill isn’t alone in their warm feelings toward Ukraine. As Reuters reported in May 2013, Monsanto — the largest seed company in the world — plans to build a $140 million “non-GM (genetically modified) corn seed plant in Ukraine.”
And right after the decision on the EU trade deal, Jesus Madrazo, Monsanto’s Vice President for Corporate Engagement, reaffirmed his company’s “commitment to Ukraine” and “the importance of creating a favorable environment that encourages innovation and fosters the continued development of agriculture.”
Monsanto’s strategy includes a little “hearts and minds” public relations, too. On the heels of Mr. Madrazo’s reaffirmation, Monsanto announced “a social development program titled “Grain Basket of the Future” to help rural villagers in the country improve their quality of life.” The initiative will dole out grants of up to $25,000 to develop programs providing “educational opportunities, community empowerment, or small business development.”
The well-crafted moniker “Grain Basket of the Future” is telling because, once upon a time, Ukraine was known as “the breadbasket” of the Soviet Union. The CIA ranks Soviet-era Ukraine second only to Mother Russia as the “most economically important component of the former Soviet Union.”
In many ways, the farmland of Ukraine was the backbone of the USSR. Its “fertile black soil” generated over a quarter of the USSR’s agriculture. It exported “substantial quantities” of food to other republics and its farms generated four times output of “the next-ranking republic.”
Although Ukraine’s agricultural output plummeted in the first decade after the break-up of the Soviet Union, the farming sector has been growing spectacularly in recent years. While Europe struggled to shake-off the Great Recession, Ukraine’s agriculture sector grew 13.7 per cent in 2013.
According to the Centre for Eastern Studies, Ukraine’s agricultural exports rose from $4.3 billion in 2005 to $17.9 billion in 2012 and, harkening the heyday of the USSR, farming currently accounts for 25 per cent of its total exports. Ukraine is also the world’s third-largest exporter of wheat and of corn. And corn is not just food. It is also ethanol.
But people gotta eat — particularly in Europe. As Frank Holmes of U.S. Global Investors assessed in 2011, Ukraine is poised to become Europe’s butcher. Meat is difficult to ship, but Ukraine is perfectly located to satiate Europe’s hunger.
Just two days after Cargill bought into UkrLandFarming, Global Meat News (yes, “Global Meat News” is a thing) reported a huge forecasted spike in “all kinds” of Ukrainian meat exports, with an increase of 8.1 per cent overall and staggering 71.4 per cent spike in pork exports. No wonder Eli Lilly is represented on the U.S.-Ukraine Business Council’s Executive Committee. Its Elanco Animal Health unit is a major manufacturer of feed supplements.
And it is also notable that Monsanto’s planned seed plant is non-GMO, perhaps anticipating an emerging GMO-unfriendly European market and Europe’s growing appetite for organic foods. When it comes to Big Ag’s profitable future in Europe, the stakes couldn’t be higher.
For Russia and its hampered farming economy, it’s another in a long string of losses to U.S. encroachment — from NATO expansion into Eastern Europe to U.S. military presence to its south and onto a major shale gas development deal recently signed by Chevron in Ukraine.
So, why was Big Ag so bullish on Ukraine, even in the face of so much uncertainty and the predictable reaction by Russia?
The answer is that the seeds of Ukraine’s turn from Russia have been sown for the last two decades by the persistent Cold War alliance between corporations and foreign policy. It’s a version of the “Deep State” that is usually associated with the oil and defense industries, but also exists in America’s other heavily subsidized industry — agriculture.
Morgan Williams is at the nexus of Big Ag’s alliance with U.S. foreign policy. To wit, SigmaBleyzer touts Mr. Williams’ work with “various agencies of the U.S. government, members of Congress, congressional committees, the Embassy of Ukraine to the U.S., international financial institutions, think tanks and other organizations on U.S.-Ukraine business, trade, investment and economic development issues.”
As President of the U.S.-Ukraine Business Council, Williams has access to Council cohort — David Kramer, President of Freedom House. Officially a non-governmental organization, it has been linked with overt and covert “democracy” efforts in places where the door isn’t open to American interests — a.k.a. U.S. corporations. ***
Freedom House, the National Endowment for Democracy and National Democratic Institute helped fund and support the Ukrainian “Orange Revolution” in 2004. Freedom House is funded directly by the U.S. Government, the National Endowment for Democracy and the U.S. Department of State.
David Kramer is a former Deputy Assistant Secretary of State for European and Eurasian Affairs and, according to his Freedom House bio page, formerly a “Senior Fellow at the Project for the New American Century.”
Nuland’s engineering of the Ukraine
That puts Kramer and, by one degree of separation, Big Ag fixer Morgan Williams in the company of PNAC co-founder Robert Kagan who, as coincidence would have it, is married to Victoria “F*ck the EU” Nuland, the current Assistant Secretary of State for European and Eurasian Affairs.
Interestingly enough, Ms. Nuland spoke to the U.S.-Ukrainian Foundation last Dec. 13, extolling the virtues of the Euromaidan movement as the embodiment of “the principles and values that are the cornerstones for all free democracies.”
Nuland also told the group that the United States had invested more than $5 billion in support of Ukraine’s “European aspirations,” meaning pulling Ukraine away from Russia. She made her remarks on a dais featuring a backdrop emblazoned with a Chevron logo.
Also, her colleague and phone call buddy U.S. Ambassador to Ukraine Geoffrey Pyatt helped Chevron cook up their 50-year shale gas deal right in Russia’s kitchen.
Although Chevron sponsored that event, it is not listed as a supporter of the Foundation. But the Foundation does list the Coca-Cola Company, ExxonMobil and Raytheon as major sponsors. And, to close the circle of influence, the U.S.-Ukraine Business Council is also listed as a supporter.
Which brings the story back to Big Ag’s fixer — Morgan Williams.
Although he was glum about the current state of investment in Ukraine, he’s gotta wear shades when he looks into the future. He told the International Business Times, “The potential here for agriculture/agribusiness is amazing … production here could double. The world needs the food Ukraine could produce in the future. Ukraine’s agriculture could be a real gold mine.”
Of course, his priority is to ensure that the bread of well-connected businesses gets lavishly buttered in Russia’s former breadbasket. And there is no better connected group of Ukraine-interested corporations than American agribusiness.
Given the extent of U.S. official involvement in Ukrainian politics — including the interesting fact that Ambassador Pyatt pledged U.S. assistance to the new government in investigating and rooting-out corruption — Cargill’s seemingly risky investment strategy probably wasn’t that risky, after all.
*JP Sottile is a freelance journalist, radio co-host, documentary filmmaker and former broadcast news producer in Washington, D.C. His weekly show, Inside the Headlines w/ The Newsvandal, co-hosted by James Moore, airs every Friday on KRUU-FM in Fairfield, Iowa and is available online. He blogs at Newsvandal.com
Notes on the article by TS
** On September 11, 2013, SigmaBlezer, U.S. vulture capital, acquired 62 per cent of the French agribusiness AgroGénération, which controls 120 000 hectares in operation in Ukraine although it was only formed in 2007. The new group formed with Harmelia ranks among the top five producers of grains and oilseeds in the Ukraine with a potential annual production of 400 000 tonnes. In a March 15, 2011 report, Reuters said, “AgroGeneration has, so far, based its development in Ukraine, the breadbasket of the former USSR, lured by rich soils, cheap rental and labour costs, and a wide choice of uncultivated or badly cultivated former collective farms to turn around.” The Group also jointly operates 16,000 hectares in Argentina.
AgroGénération is a member of the U.S.-Ukraine Business Council.
*** Before joining Freedom House in 2010, David Kramer was an adjunct professor at the Elliott School for International Affairs at The George Washington University and “senior transatlantic fellow” at the German Marshall Fund of the United States (GMF). The GMF, through its newly-formed Black Sea Trust, financed by USAID and the Stewart Mott Foundation, directly initiated the Kiev Security Forum in April, 2007 – an organizing platform for NATO, EU integration and neo-liberalism under the pretext of “public policy.” – and then the Halifax International Security Forum (HISF) aka the Halifax War Conference in November, 2009. The Kiev Forum was co-sponsored by the Open Ukraine Foundation of Arseniy Yatsenyuk, the Wall Street-supported usurper puppet prime minister of Ukraine, who at the time was Minister of Foreign Affairs, with funds from the usual suspects of “humanitarian intervention” and “democracy promotion.”
Through this and other means a fifth column was groomed within the Ukraine to annex the country to serve the corporate interests that are documented above, as well as the international financial oligarchy (debt, etc.). This conformed to the recommendations of the Princeton Project to Obama about establishing new international networks of “regional elites” in the manner of the Cold War. Further, we can extrapolate that the same process in the Ukraine is also being carried out by the imperialists in our country of Canada and elsewhere. Kramer is now secretary of its board of the HISF, whose president David Van Praagh was in 2007 head of the GMF’s Black Sea Trust, and whose headquarters are in Washington but entirely financed by Canadian taxdollars.
Furthermore, the anti-farmer, anti-national policies of the annexed Harper government – such as the destruction of the wheat board, subsidizing beef companies to expand production, and the integration of the US and Canadian agricultural industry into a semi-continental market – are in the direct service of Cargill et al. Cargill, a U.S. private company remains the largest beef processor in Canada, controlling 55 per cent of the industry. Its 2011 revenue worldwide was more than $109 billion with profits of over $3.3 billion. Cargill controls 22 per cent of U.S. supply.
A 2010 National Farmers Union (NFU) report, Losing Our Grip: How a Corporate Farmland Buy-up, Rising Farm Debt, and Agribusiness Financing of Inputs Threaten Family Farms and Food Sovereignty, is available by email by calling (306) 652-9465.
U.S. finance capital expands into agriculture
The U.S. vulture capitalists are seizing the agricultural assets of the Ukraine as part of their new paradigm, their empire building.
In the Ukraine, foreign players have invested some $2.8 billion and control about 1.5 million hectares, or 4.5 per cent, of the 33 million hectares of arable farmland.
The investors included Morgan Stanley, in a failed project aptly called “Golden Field.”
A December 2, 2013 article on investment trends in farmland in Moscow News highlights the expansion of international finance capital into agriculture and the Ukraine and Russia:
“In most parts of the world, farming has traditionally been the domain of families and vertically integrated agro-processors. But the food price spikes in 2007-08 highlighted imbalances in the global supply and demand of food commodities, and doubled the price of wheat. Since then, interest in farming from a new class of institutional investors — including hedge, endowment, pension, private equity and sovereign wealth funds — has surged.
Two factors are driving investments: potential gains from rising farmland values and potentially attractive operating returns. Underpinning the investment case is the view that commodity markets are in the early stages of a super-cycle of higher prices. This in turn is being driven by rising demand for food from a global population forecast to grow from 7 billion to 9 billion by 2050, as well as by changing dietary trends in emerging markets, driven by a middle class estimated to increase from 400 million to 1.2 billion over the next 20 years. Institutions also view farmland as a distinct asset class and a means of diversifying risk by using real assets as a hedge against inflation, as well as having a low correlation to traditional asset classes.
A recent study by the United Nations’ Food and Agriculture Organization and the European Bank for Reconstruction and Development estimates institutional investment in primary agriculture worldwide at about $24 billion. This represents a fragment of the value of farmland globally, which TIAA-CREF, a large U.S. pension manager and leading institutional investor in farmland, estimates at some $8 trillion. Institutions have focused mostly on four regions: the U.S.; Canada; Australia and New Zealand; and Brazil and Argentina. These regions account for about 84 percent of the investments made to date.
Five key features define their attractiveness: strong agricultural potential, well-developed farmland markets, significant depth in farming expertise, effective legal and contractual processes, and developed supply chain infrastructure.
Russia, Ukraine and Kazakhstan have also attracted institutional interest, although they represent only 10 per cent of such investments globally. While the Commonwealth of Independent States offers some of the most potential for institutional-scale investment, country risk perceptions, complexities in doing business and the lack of high-quality opportunities have limited actual commitments.
The remaining 6 per cent of institutional investment in primary agriculture has been in Africa, where fragmented land rights, weak infrastructure and governance issues have held back investments. But the continent offers vast potential to increase agricultural production and, along with Brazil, is perceived as having the most scope to open new areas of arable farmland.
While the investment model in the U.S. and Canada generally consists of owning and leasing farmland, the lack of independent players with the requisite operational expertise has compelled investors in Russia and Ukraine to manage farms themselves.
Lower land costs continue to be the competitive advantage for CIS countries. Farmland in Russia costs about 10 per cent of that in North and South America, but the need to manage operations has increased the complexity of investments. Since 2006, foreign institutions and private companies have invested an estimated $2.9 billion in farming in Russia, and they control some 1.7 million hectares, or 1.4 per cent, of its 120 million hectares of arable farmland. Foreign capital has also dominated the institutional investor landscape in the country. While local agro-holdings continue to invest widely, there are just two major commitments by domestic, nonfarming institutions in Russia’s primary agriculture: Finam’s Capital Investments Fund and VTB Capital’s Irrico development.”