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Political Economy of the Russia Ukraine Conflict

August 28, 2022
The Citizen

By Shrinivas Dharmadhikari

The Russia-Ukraine Conflict is now in its sixth month. Global media has been saturated with reports about this conflict. The high sounding claims of protecting democracy and respect for the rule-based international order has successfully pulled the wool over the eyes of the majority in the Western World.

"When all think alike, no one really thinks."

What has been intriguing is the mullish stubbornness of the United States and European leadership. Despite spending an estimated 8 Billion US Dollars, and counting, and driving the world to the nuclear cliff, the Combined West is unwilling to consider any dialogue or diplomatic solution.

Why? What is at stake?

Why is the Combined West so keen on an all-out, no holds barred approach and has resorted to retaliatory measures like theft of the sovereign assets, international reserves, and to massive illegal unilateral sanctions? The answer to this question needs articulations on economic dimensions.[…]

It will not be a bad throw at the dartboard to say that the 'other goals' may be Ukraine's integration with the US/EU-based International order.

Agriculture has been the most attractive sector of the Ukrainian Economy. Ukraine has 32 million hectares of arable land with rich fertile black soil (the "Chernozem' variety has a high organic matter content), a large variety of climatic zones, and favourable temperature and moisture regimes. With such a rare natural symphony, Ukraine has a comparative advantage in grain production. Its production costs are estimated to be about 50% lower than those of European producers.

Ukraine is capable of producing a range of crops, including cereals and oilseeds. Ukraine's annual production of 64 million tons of grain and seeds. Ukraine is the world's largest barley, wheat and sunflower oil producer. In addition, Ukraine's proximity to large and growing neighbouring markets –the European Union — and access to the deep sea ports at the Black Sea provide direct access to the world markets and the giant grain importers in the Middle East and North Africa.

No wonder, since the fall of the USSR, economic interests have been converging on Ukraine. The three Agri-Business giants Monsanto, Cargill and Dupont were the first to be present in this market.

Cargill initially started off with the sale of pesticides, seeds and fertilisers; fast expanding into making investments in grain storage and animal nutrition and buying stakes in the giant agribusiness in the country, the UkrLandFarming. Similarly, Monsanto and DuPont have recently invested in a new seed plant.

More Foreign Corporations are making a beeline for the Ukrainian agriculture sector. It is estimated that over 1.6 million hectares of Agri land has been signed over to the foreign companies for agricultural purposes in recent years.

As Frédéric Mousseau, Policy Director at the Oakland Institute has put it succinctly, "the manoeuvring for control over the country's [Ukraine'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."[…]

(The author wishes to express his gratitude for the party theme and details of this article to the Oakland Institute, the USA, who documented in 2015 the takeover of the agricultural sector as outlined in their two reports - 'The Corporate Takeover of Ukrainian Agriculture' and 'Walking on the West Side: The World Bank and the IMF in the Ukraine Conflict.)