Cereals transport from Ukraine resumed on the same day that Lithuania lifted the ban on the transit of Russian goods, causing relief among the residents of the Russian exclave, Kaliningrad. An American thread also appears in the background: a significant portion of the grain produced in Ukraine was produced by US-based agricultural companies, for which the US government had lobbied countless times before. If this was the case now, too, it would be the first major US-Russian agreement since the outbreak of the Russia-Ukraine war.

It received little attention, but in the latest phase of the conflict between Russia and Ukraine, a decision was made about opening up the Lithuania-blocked rail supply route to the Russian exclave of Kaliningrad, at the same time as Ukrainian cereal shipments resumed from the port of Odessa. The agreement was mutually beneficial for the parties, but grains transports are not only interesting from a humanitarian and supply security aspect. Large US agricultural companies (Big Agro) own significant stretches of farmland in Ukraine, and according to some, are developing GMO products, the Hungarian daily Magyar Nemzet reports.

Curious coincidence

After consultations with the EU and citing EU sanctions as the basis, Lithuania closed its borders on 17 June to certain freight trains through its territory to Kaliningrad. Forbidden goods included coal, ferrous metals and construction materials. Residents of Kaliningrad started panic buying due to shortages, and the Russian foreign ministry demanded that the goods transit be resumed immediately, German paper Deutsche Welle then wrote. The German chancellor and the Polish foreign minister both stated that the conflict could easily lead to the escalation of the war, so it must be resolved at all costs in some fashion.

Radio Free Europe wrote on the same day, 17 June, that several hundred empty cereals transport ships were moored off the coast of Romania, as they were unable to access Ukrainian ports. International experts warned that the Russian invasion could lead to global famine, the media outlet added.

Josep Borell, the EU’s high representative for foreign affairs, held a press briefing also on 17 June, in which he spoke about the role of the UN in the opening of the port of Odessa. French President Emmanuel Macron said on the very same day at another press briefing that he saw little chance of an agreement with Russia on the cereal transports.

Based on the identical dates, it seems that the EU cleverly exploited Kaliningrad’s situation:

on the same day that the Russian and the Ukrainian delegation sat down at the negotiating table in Istanbul to discuss the resumption of Ukrainian grains exports on the Black Sea, the EU told the Lithuanian government to allow the retstricted freight trains to cross the Lithuania-Russia border.

Lithuania finally lifted the ban on goods transport to the Russian exclave on 23 July, with the first train arriving curiously enough on 26 July, the same day that in Istanbul, Russia signed the agreement on the establishment of a cereals coordination centre.

Besides the spectre of global famine, there may be another reason why the West, and mainly the US, considers it especially important that agricultural products from Ukraine make it to the global market. Since 2021, when Ukrainian President Zelensky permitted foreign investors to buy Ukrainian farmland, the ownership share of US companies in those farmlands grew significantly, Magyar Nemzet and the Hungarian portal Origo recently wrote.

Big Agro

US Big Agro companies have been eyeing Ukrainian arable land since the fall of the Soviet Union, but started gaining a significant influence in the Eastern European country only since 2014. Despite the fact that selling farmland was prohibited in the country until 2021, the ownership structure of the land has been changing since 2014. The press reported a plan as early as 2012 about leasing unused land owned by the government to high-volume agricultural investors. The plan would have offered long-term lease on areas over 400 thousand hectares for the minimum price of 200 million dollars, with various state benefits in return.

Although the plan never got off the ground, significant areas of farmland were obtained by foreign investors in the following years. Despite the moratorium on selling land, ten international companies possessed 2.8 million hectares of land in Ukraine by 2016.

A report by Open Democracy also reveals that 71 per cent of the Ukrainian agricultural market is controlled by ten private companies.

Besides farmland, other agricultural opportunities have also attracted agro giants such as Monsanto, Cargill and DuPont. Behind the acquisitions a very strong lobby worked in the background, aiming to legalise the use of GMO technology in the country. This has been prohibited by law for years. However, the Oakland Institute reported that in 2014

Article 404 of the Ukraine-EU agreement de facto provides for the use of „biotechnology”

in the country. This was confirmed by the 2017 Economic Cooperation Agreement, which also mentioned „support for modern agricultural products, including the use of biotechnology” – another implicit opening to GMO crops.

Predator companies: Cargill

One of the most active Big Agro firms in Ukraine in recent years has been the US company Cargill. As is well known, Cargill, together with ADM, Bunge and Louis Dreyfus, forms the so called „ABCD” group, which dominates the world agricultural market. Cargill entered Russia and Ukraine shortly after the collapse of the Soviet Union, and has since invested more than a billion dollars in the grain and food trade in the two countries. Cargill has six facilities in Ukraine and its investments have contributed to the development of the country’s agricultural infrastructure.

In 2016, Cargill started to build its own terminal in the port of Yuzhne, on the outskirts of Odessa, which is one of the largest docks in Ukraine. It is worth remembering that the recent Istanbul agreement on the transport of cereals also concerns this port. Cargill currently owns 51 per cent of the port and is now responsible for the second largest export capacity on the Black Sea. But Cargill has not only brought agricultural investments to Ukraine: through one of its financial companies, Cargill Financial Services, it has also provided the Ukrainian state with loans totalling 250 million euros in 2019, 2020 and 2021, with maturities of between two and five years.

According to Ukrinform, Cargill CEO Dave MacLennan also met with the Ukrainian president in Davos in 2020,

where Mr Zelensky then asked Mr MacLennan to make further investments to increase yields.

The serious business relationship between the Ukrainian government and Cargill goes back even further: in 2014, the company bought a five per cent stake in UkrLandFarming, the country’s largest landowner, for 200 million dollars. Cargill dubiously struck the deal in January 2014, amidst the Maidan protests, which was a clear entry point for the company to acquire more Ukrainian farmland, the Oakland Institute says. However, the events of 2014 had a negative effect on the company, and in 2016 Cargill pulled out of the investment.

In 2015, the US giant took over assets worth hundreds of millions of dollars from Ukraine’s fourth largest bank, Delta Bank, in which it had held a 30 per cent stake since 2010. The move came weeks before the bank went bankrupt. Cargill’s actions caused a major scandal, as the assets in question were letters of credit from Ukrainian traders and their value was as high as the value of Cargill’s stake in the bank.

It is therefore easy to consider that this was the company’s way of recouping its assets from the bank,

before the financial institution became officially insolvent.

This year, however, has been a year of huge profits for the family behind the company. Three members of the Cargill-MacMillan family have been included on the Bloomberg Billionaires Index 2022. The Cargill-MacMillan family is usually ranked among the 25 richest families in the US, fourth according to Forbes, Business Insider wrote, adding that the family’s fortune was boosted most recently by the hike in food prices caused by the war in Ukraine, which benefited the largest agricultural companies. Last year Cargill made a profit of 4.9 billion dollars, the most successful result in its history. It is important to note that 88 per cent of Cargill was owned by roughly 90 members of the family in 2020. The company is also active in mining in Ukraine: in 2021, Black Iron chose Cargill to export its iron mining products from the country. In return, the US company has announced a 75 million dollar investment to develop the production site.

Predator companies: DuPont

DuPont Pioneer, which is also mentioned alongside Cargill, entered the Ukrainian market in 1998 and invested more than 55 million dollars in the country by 2017. Their largest plantation is in Stasi, Poltava, and they also own a research plot in the Kyiv region, where they are conducting research on hybrid maize varieties. The company is also researching hybrids of sunflower and rapeseed. In 2015, the Russian-Ukrainian conflict prompted DuPont to offer its help to Ukrainian farmers, offering them seed in exchange for crop.

In 2011, the WikiLeaks scandal revealed that the US was lobbying for biotech companies, such as Monsanto and DuPont, worldwide. The former company doubled its workforce in Ukraine in 2012, and later, in May 2013, Monsanto announced a 140 million dollar investment in a non-GMO corn plantation in Ukraine. At the same time, also in 2013, six major Ukrainian agricultural organisations submitted a proposal to amend the law banning the use of GMO technology in Ukraine. The organisations sought to authorise the production, testing and transport of GMO crops, including the legalisation of GMO seeds.

Predator companies: Monsanto

Like the companies mentioned above, Monsanto has also seen the potential in Ukraine, and has been expanding its presence in the country since 2013. According to Begemann, a subsidiary of Monsanto has set up an experimental centre in Uman, where it is experimenting with different seeds that could significantly increase agricultural production in Ukraine.

The Oakland Institute noted in 2014 that

the World Bank and the International Monetary Fund (IMF) have required Ukraine to open its economy to GMO crops as a condition for securing a loan

and lift the moratorium on land purchases. If these criteria were met, the Eastern European country would have received a loan of 17 billion dollars. As is well known, President Yanukovych opted instead for a smaller Russian loan, which included a gas purchase concession for Ukraine.

Also in 2014, Monsanto was linked to the acquisition of a new plantation in Ukraine, announced by the Ukrainian Ministry of Agriculture. In March 2014, two weeks after President Yanukovych’s departure, the US company invested another 140 million dollars. Due to the economic situation at the time and the crisis in Ukraine, Monsanto was faced with huge opportunities, as their production was for export. In 2018, the plantation of Bayer-Monsanto (Bayer bought Monsanto in the same year) in the village of Pochuiky was inaugurated. This was another 200 million dollar investment. Ukraine now accounts for a quarter of Bayer-Monsanto’s European market.

The start of cereals shipments from Ukraine was therefore also in the interest of the US – the Big Agro-corporations – which means that it can be

strongly suspected that ultimately there is a US-Russia agreement behind it,

which has also been beneficial for Russia, as it no longer has to fear that its citizens in Kaliningrad suffer from shortages. If a deal is indeed the case, this could be a sign of hope that the parties could also agree on peace, or at least start a dialogue in that direction.