Harpers Pre Depression Farm Plan

Once again the Harper has ressurected the old Reform party made in America farm plan.

Under the Conservative plan, farmers would also be given greater choice in marketing and transporting their products, including choosing whether the wish to participate in the Canadian Wheat Board.

Ah hem, they already have the right to elect directors to the CWB. That issue was resolved years ago. But the right wing rump of farmers who wanted to sell their wheat directly to the U.S. still lobby against the CWB. Forgetting that the CWB for all its bueracracy was created by farmers after the market crash of 1929 which drove Alberta into debt and our farmers into poverty as the Eastern banks swooped up their land for the mortgages they owed. Farmers in Western Canada created the Wheat Board to market their coop grain for the best price. The greater good and all that liberal utilitarian philosophy.

The right wingers in Reform wanted what was good for them, I' m all right Jack screw you...they lived in the Southern half of Alberta, Manitoba and Sasktchewan so loading their trucks and crossing the border was not problem, but transportation costs for other farmers in central and northern parts of the provinces well who cares about them eh. Also many of them belonged to the Religious right, Mormons, Dutch Reformed, etc. whose religious ideology and kinship group is linked across the border in the US. So this was also a question of ideology not just practical economics.

Notice that these same right wing sop called free marketers never challenge the Quebec farm cooperatives and marketing boards for dairy and eggs. Wonder why? Cause they have NO political base in Quebec. That would require finding a couple of selfish stupid Gentlemen farmers who read too much Ayn Rand, hobby farmed and forgot the lessons of the Great Depression. See what I mean;

"The Conservative vision of agriculture policy has been shaped by MPs in almost every region of the country who have been deeply involved in farming for their entire lives. We are stronger because of this representation and, frankly, Conservatives have a better understanding of the impact of the difficult times facing many farm families today."

Putin's war is damaging the developing world

Perspectives
Jayati Ghosh
13 Mar, 2022

Russia's invasion of Ukraine has caused increases in oil and food prices, harming developing countries struggling to recover from the pandemic. Multilateral organisations should provide financing to help these economies cope, writes Jayati Ghosh.

As oil and wheat prices soar as a result of the Russian invasion of Ukraine, disruptions to global supply are likely to hit developing nations, still struggling to economically recover from the pandemic, hardest [Getty]

It is difficult to see any winners in the ongoing war caused by Russia’s irrational and devastating invasion of Ukraine. But the losers extend far beyond the people of Ukraine, who are being attacked, and the people of Russia, who did not choose this war but now must endure an economy being dismantled by trade and financial sanctions.

The economic impact of the conflict will be felt around the world, including in many developing countries that are already struggling to recover from the COVID-19 pandemic.

One immediate concern is the effect of rising oil prices. The price of benchmark Brent crude recently jumped by 20% to more than $139 per barrel, its highest level since 2008 – probably in response to news that the United States and its European allies were discussing a possible ban on imports of Russian oil, which had so far been exempt from Western sanctions. (On March 8, the US announced a ban on imports of Russian energy products, while the United Kingdom pledged to phase out imports of Russian oil and oil products by the end of 2022.)

"This latest oil-price spike is a blow they can ill afford, as it is likely to generate balance-of-payments problems and domestic inflationary pressures that will be tough to combat in the current uncertain context"

But global energy prices had already been soaring, following a period of dramatic volatility during the pandemic. The price of Brent crude, which had fallen to as low as $9 per barrel in April 2020 at the height of the pandemic’s first wave, rose above $90 per barrel in January 2022. Since then, the Ukraine war has put further upward pressure on oil and gas prices.

Western media have focused on the impact of rising energy prices in Europe, which relies heavily on natural gas imports from Russia. But most of the world’s oil and gas importers are much poorer. Many of these countries were unable to mount fiscal responses to the pandemic on the scale of those in the US and other advanced economies, and have since experienced much weaker recoveries in output and employment.

This latest oil-price spike is a blow they can ill afford, as it is likely to generate balance-of-payments problems and domestic inflationary pressures that will be tough to combat in the current uncertain context.

Of course, the additional inflationary pressures from the Ukraine war are also complicating the challenge that policymakers in rich Western economies face in tackling rising prices without causing a hard economic landing. Oil is a universal intermediary good, which influences the costs of commodities and services, as well as transport costs, in multiple ways.

Oil-price increases can thus be a significant driver of cost-push inflation even at the best of times. But inflation in rich countries was already at levels they had almost forgotten. Policymakers also appear to consider only the most simplistic weapons against inflation, like raising interest rates and tightening liquidity, which do little to address cost-push pressure and could cause a real economic downturn.

But the challenges are greater still in the developing world, leaving policymakers with even less wiggle room. The dramatic recent increase in oil prices obviously affects oil-importing countries directly, and will feed into all other prices through rising input and transport costs.

RELATED
The invasion of Ukraine and MENA's looming bread crisis
In-depth
James Snell

The tragedy playing out in Ukraine is also increasing global food prices, creating even more pain in developing countries where hunger had already increased dramatically during the pandemic. Before the war, Ukraine was the world’s fifth-largest wheat exporter, and also a major exporter of barley, corn, rapeseed, and sunflower oil. The prices of these commodities in global trade have risen significantly, adding to recent increases in crop prices generally.

Now there is a further danger: Financial investors who had been betting on speculative asset markets will need to find other places to park their money, and food futures could emerge as a favoured destination. In the first five days of March, the price of wheat futures at the Chicago Board of Trade increased by 40%, putting it on track for its largest weekly increase since 1959.

Crop production in developing countries could also be hit by fertiliser shortages. Russia, the world’s largest wheat exporter, is also a major fertiliser producer, and disruptions to these exports will push global food prices even higher.

We previously saw parts of this movie in otherwise peaceful times, just before the global financial crisis, and it was a dark and depressing story even then. The food crisis that resulted from financial-market speculation in 2007-08 led to massive increases in hunger and devastated the lives of hundreds of millions of people in developing countries.

"Without such efforts, Russia’s war against Ukraine will wreak much more damage on the global economy – and poorer countries will be among the hardest hit"

That crisis occurred even though global supply and demand of food items did not change much. But now, with real reductions in global food supply almost inevitable, the price rises could be greater and longer-lasting. If speculative pressure increases, already fragile economies will be damaged even more.

It may not be surprising that the G7 (whose recent track record as a self-appointed leader of the global economy is hardly distinguished) is not expressing much concern about these real and pressing dangers. But multilateral organisations surely need to step up in this time of crisis, at the very least by providing compensatory financing to help the developing world cope with multiple price shocks, and suggesting and enabling regulations to prevent speculation in essential markets.

Without such efforts, Russia’s war against Ukraine will wreak much more damage on the global economy – and poorer countries will be among the hardest hit.

Jayati Ghosh, Executive Secretary of International Development Economics Associates, is Professor of Economics at the University of Massachusetts Amherst and a member of the Independent Commission for the Reform of International Corporate Taxation.

This article originally appeared on Project Syndicate.

Ukraine crisis feeds fears of another food

crisis

13 March 2022

Author: Peter Timmer, Harvard University

The Russian invasion of Ukraine and the widespread devastation of the country raise the spectre of another world food crisis. Asia suffered badly during the last food crisis in 2007–08, mostly because of panicked behaviour in the region’s rice markets.

It is too soon to know the full impact on Ukrainian grain supplies and infrastructure from the Russian onslaught, on the prospects for a reasonably normal winter wheat harvest, and then spring planting of wheat, corn, sunflowers and other commodity staples for which Ukraine is a significant exporter. The country is known as ‘the breadbasket of Europe’ for a reason.

But what is clear is that the world food economy is on the verge of another major crisis, perhaps as disruptive as the one in 2007–08. Important lessons were learned from the last food crisis, and avoiding those mistakes will be critical to keeping the region’s food economies reasonably stable this time. How the developing countries of Asia will fare as food supplies tighten is a special interest to Australia.

World grain markets are seeking direction. Africa is already suffering from losing access to Ukrainian wheat. Maize and barley exports to China have been disrupted. An already tight oilseeds market is now threatened by the loss of Ukrainian sunflower seed oil. India has asked Indonesia to ease its restrictions on palm oil exports.

Prices for wheat on futures markets had risen in anticipation of the Russian invasion of Ukraine, and prices were already high because of supply chain disruptions caused by COVID-19. But there has been no sustained spike since the war started on 24 February 2022. Prices are high and volatile, with wheat futures prices trading both up and down the daily limits since the war erupted.

If a crisis actually materialises, there will be serious short and long-term repercussions in developing Asia Pacific countries.

Some of the short-term consequences are already in play. Modern agriculture is heavily dependent on energy inputs, both directly as fuel for farm equipment, and also to power the supply chains for farm inputs and output. Just as important is the dependence of high-yield cereal production on synthetic nitrogen fertilisers — natural gas plus electricity plus capital-intensive machinery equals urea. Vaclav Smil calculates that a third of the world’s population depends directly on the cereals produced with this urea and other synthetic nitrogen fertilisers.

High energy prices mean high fertiliser prices, lower applications and yields, and higher grain prices. In the short-term that means more hunger in poor countries. Even if rice prices from Asian exporters remain at their current elevated levels, there will be more hunger in Timor Leste, Laos, Cambodia, Myanmar and possibly Indonesia. Papua New Guinea and most Pacific island nations will be hit the hardest because they are highly dependent on food imports.

The longer-term consequences are possibly more troubling, but are much harder to analyse with the war still in its early stages. Historically, structural transformation in developing economies leads agriculture to decline in relative importance as the modern industrial and service sectors, mainly in urban areas, grow much faster. It has been the only sustainable pathway out of poverty. Any forces that slow this process, or even bring it to a halt, also slow or halt the reduction of poverty and hunger. These forces can be internal, such as hostile political environments, or external shocks, such as wars and food crises.

The sharply higher rural–urban terms of trade brought about by food crises significantly slow structural transformation. More agricultural workers remain on the farm, with fewer moving to more productive jobs off the farm or in urban areas. Rural poverty increases, agricultural productivity stagnates, and the country remains mired in poverty. Much of sub-Saharan Africa is caught in this trap, and a number of Asia Pacific countries remain vulnerable if the food crisis drags on.

Can anything be done now to prevent this dismal scenario from playing out? If there is anything the Western allies, or China, can do to prevent Russia from pursuing a ‘scorched earth’ campaign in Ukraine, they should try.

The most important thing is not to panic. There is enough wheat, rice and other foodstuffs in warehouses around the world or awaiting harvest in the northern hemisphere to ensure that no one need starve. But ‘don’t panic’ implies a level of trust in world grain markets to deliver the needed supplies in a timely manner. Such trust will depend on some degree of cooperation among participants in world rice and wheat markets.

The rice crisis in 2007–08 was caused by panicked importers, exporters and hoarding by small-scale participants along the rice supply chain. Prices spiked. Once the reality of adequate supplies was made apparent after Japan announced that two million tons of US long grain rice would be available for re-export from Japanese storage silos on 2 June 2008, rice prices fell very quickly. The world rice market stabilised in a matter of weeks, remaining fairly stable ever since. Trust in the world rice market has been re-established, at least among most Asian participants. ASEAN has played a surprising role in establishing and maintaining this trust.

Full and detailed accounting of current grain supplies by major exporters would go a long way toward preventing a repeat of the 2007–08 price panic. A pledge from these exporters to allocate supplies to customers most in need would eliminate importers’ fears, build trust, and stabilise the world grain economy. If the Ukraine war ends reasonably soon without destroying its farms and grain marketing infrastructure, a world food crisis can be avoided.

Dr Peter Timmer is Thomas D. Cabot Emeritus Professor of Development Studies at Harvard University.

PROFITEERING

Investors cash in on food commodities as the poor go hungry

As food prices rose and war broke out in Ukraine, investors looking for a sure bet flocked into food commodities. The trend could be pushing prices up even further, with live-or-die consequences for the world's poor.

The war in Ukraine has had a huge impact on food prices around the globe

Rising consumer prices are aggravating food shortages around the globe, and investors looking to make a buck off food commodities could be making matters worse.

Food prices have risen sharply after the coronavirus pandemic disrupted global supply chains, causing shortages around the world. The price of food spiked even higher following Russia's invasion of Ukraine. Both countries are major global suppliers of agricultural commodities, like wheat and sunflower oil.

"In Uganda, wheat and fuel prices have skyrocketed, making everyday goods like bread almost unaffordable to an ordinary citizen," Anna Slattery, external affairs manager at The Hunger Project, a nonprofit that works to end world hunger, told DW.

"In Malawi, our teams are reporting that the prices of maize grain, soybeans and cooking oil have increased significantly, over 50% in some places. The increase in prices is making it difficult for people to access these vital food items." 

An appetite for commodities

Investors trying to make money off the high demand for food and other commodities could be putting even more pressure on prices.

After the war broke out in February, commodity-linked "exchange-traded funds (ETFs)," a type of investment fund open to the public, saw a huge uptick in activity: By April, investors had pumped $1.2 billion (€1.12 billion) into two major agricultural ETFs, compared to just $197 million for the whole of 2021, Lighthouse Reports, an investigative journalism NGO, found out.

According to the news website The Wire, the Paris milling wheat market, the benchmark for Europe, has also seen a significant increase in the share of speculators — that is, investors whose primary aim is to turn a profit — buying up its wheat futures contracts. That's in place of commercial traders or hedgers, i.e. market players who have an interest in buying the commodity itself, for example to secure a wheat supply for a bread factory. 

Activity at the Chicago Board of Trade, one of the world's leading futures exchanges, also reflects this trend. A recent study by the Center for Development Research (ZEF) at the University of Bonn found that the share of speculators in hard wheat and maize had risen with the price of the commodities, and that it had gone up sharply since the end of 2020. The researchers also found that the volatility of futures prices had increased significantly since the end of 2021, a sign of market irregularities that can lead to excessive speculation.

A sure bet

The ZEF report warned that more speculation could see prices decoupling from fundamentals, like supply and demand for example. It pointed to similar trends leading up to the global food crisis that emerged in 2008.

In April, analysts at investment bank JPMorgan Chase suggested that commodities prices could surge as much as 40% as traders pile in, creating an attractive return for investors.

Traders tend to move away from riskier investments, like tech stocks and cryptocurrencies, in times of economic uncertainty, favoring safer bets, like food and other hard commodities, like oil and fertilizer. Food commodities, like wheat, corn and rice, can also be adversely affected by market uncertainty.

"The more uncertainty in the market, the more demand for risk trading exists," Lukas Kornher, economist and ZEF project manager, told DW. "That is why we see the influx of speculative traders in the market."

It will take a huge effort by the international community to curb hunger in many parts of the world

Excessive trading

"[Speculative traders] basically try to jump on a bandwagon of increasing prices," said Kornher. "And then they start trading with each other instead of meeting the hedging demand of commercial producers or traders."

The price of the commodity can then become disconnected from its physical supply and demand.

Excessive speculative activity in commodities markets is "a double-edged sword," Dirk Bathe, press officer at World Vision Germany, a humanitarian aid group, said.

"On the one hand, speculation on scarce commodities can lead to drastically rising prices," he told DW. "On the other hand, this market functions like an early warning system," giving businesses and policymakers time to react.

Millions more pushed into poverty

The current price inflation and record-high prices at the commodities futures markets signal an expected scarcity within a couple of months, according to Kornher, who said the world was likely "on its way" to a food crisis.

The Food and Agriculture Organization (FAO)'s food price index was up 36% in April compared with the same month a year before, after hitting an all-time high in March. The World Bank's Agricultural Price Index also hit an all-time nominal high in the first quarter of the year, up 25% over a year ago. According to a World Bank analysis, for every one percentage point increase in food prices, 10 million more people are pushed into extreme poverty.

Experts have called for measures to protect food systems against speculation. Banks and investment funds could abstain from food speculation as part of their environmental, social and governance (ESG) policy, for example. They've also warned against countries responding to high food prices by turning to protectionist policies.

"We need to make sure that countries don't take export restrictions, don't take export bans that will only exacerbate the food insecurity we're seeing today," Arancha Gonzalez, trade expert and the former foreign minister of Spain, told DW. "This is what we learned in 2008."

AN OPEN LETTER TO PRESTON MANNING 

ON THE EVE OF CANADA'S 42ND ELECTION

19, OCTOBER 2015

Dear Mr. Manning;

Sir, I am writing you to appeal to you in these last days of this election, before voting day, to speak out about the undemocratic and downright Un Reform Party and actually Anti Reform Party principles and ethics on democratic governance  by the Prime Minister, your student and apprentice, Stephen Harper.

I know the old days were full of idealism like the West Wants In and that would change things for the good, like ending MP’s pensions.  Oops that’s perhaps not the best example since you and your MP’s did take them.

Ok how about Senate Reform, the triple EEE Senate, the PMO not appointing Senators but they be elected by the provinces. Sheesh sorry another Oops; how did that work out to become the PMO appoints Senators, 56  in all, the largest by any PMO which means larger than any Liberal Government ever appointed.

Recall, remember recall, if you didn’t like you MP you could get a petition together and kick em out between elections. Remember Recall the very core principle of the Reform Party, the Reform in the Reform Party.  How’s that going under Harper. Ahh come on I know, don’t blame Stevie you dumped that one yourself when you became Leader of Her Majesty’s Loyal Opposition.

About Stornaway, that was of course foolish youthful braggadocio on your part as a green Party Leader, boasting that as leader of the Reform Party in Opposition you would never live there, so really this is not all on Stevie. The Reform Party of Preston Manning. reformed once in power as the Official Opposition you just became another parliamentary party.

 Heck you guys on the right split again, like an amoeba into three conservative parties and so the whole focus of Stephen Harpers campaign was to win power by bringing you all back together under the strong leadership of one man him.

Oh dear perhaps this is a bit farfetched to ask of you, to opine on how Stephen Harper is BAD FOR DEMOCRACY but you have since retirement from parliamentary politics set up a foundation  Manning Centre for Building Democracy  for the promotion of Edmund Burke’s and John Locke’s classical liberal interpretation of governance and democracy, the two not necessarily being synonymous.

I know like many in the old Reform Wing of the party, you harbor secret dreams of being a libertarian like those of your ideological counterparts south of the border. Even here you must admit that your libertarian shadow self must surely cringe at Harper’s draconian police state law Bill C51.

Of course you have had some victories with Steve in power  you and your Reform Party base did manage to undemocratically reform the Canadian Wheat Board out of existence as promised by you way way back when. However I am sure like many Albertans and Canadians who believe in a fair deal not a fixed one no effort was put into reforming the wheat board to become a democratically run producer cooperative.

 So congratulations your privatization ideology succeeded in destroying the farmers cooperative and having it sold , no pardon me, given away for free to a Saudi Arabian corporation owned by the Sovereign Wealth Fund of the Saudi Arabian Government.  This then is the free market principle in practice not in theory.  Another failure that began under you.

Perhaps you really can’t criticize Stephen Harper, because you like him have a fuehrer complex, the need to be the alpha male, the big man on campus, the boss.  Unfortunately for you you truly do love the ideal of reform, as with most conservative thinkers, it is an ideal, when it comes to political practice democracy is abandoned for power, and as we know from at least one other conservative thinker absolute power corrupts absolutely.

In this I think we can both agree that Stephen Harper has abandoned all principles except that of staying in power, and changing the country to fit his ideology, not yours, mine or anyone elses and certainly not the Conservative Party. And he learned that ideology at the feet of Barry Cooper, Tom Flanagan, and the right wing political think tank at the University of Calgary. That once hot bed of neo conservative braggadocio about how it was all new, an alternative to the failure of the government welfare state and the socialist economics of Keynes.

Add in a dash of prairie populist Reformism the spirit of recall, reform of the senate, and the right to vote on legislation by petition; Referendum, the three R’s of your Reform Party . All old Alberta ideas from even before they were adopted by you, the son of the Socred Premier of Alberta. The reform agenda was and is prairie populism spread by socialists and social creditors.

In fact in Alberta it was socialist labour and the United Farmers of Alberta that attempted to implement these practices, years before Social Credit.

You know that and so do I because I am a historian of the labour movement in this province.

Doesn’t Stephen remind you of someone?

Dare I say your father; Ernest Manning  and before him Bible Bill Aberhart the creators of the Social Credit movement and Party here in Alberta. Bible Bill despite his name was more  Fuhrer than Premier, he is actually Steve’s ideal, for after only being in power for a short time Aberhart brought in a draconian censorship law prohibiting criticism of his regime, which to its credit to this day the Edmonton Journal challenged to the Supreme Court and won in having it overturned.

Sounds familiar, ignore the charter and constitution and the principles of law, while declaring yourself a law and order government. These of course are the classical principles and practices of what we now call fascism. Harper declares himself a democrat a libertarian free marketer, but in reality as Tom Flanagan now admits to the ‘horror of'’ having created a Prime Minister who considers himself  The Great Leader, and it does not help that 9/11 Truthers believe he shares a birthday with the Fuhrer.

 One does not need to invoke Hitler, to remember that fascism arose following failed revolutions in the Twentieth Century, Aberhart’s Social Credit suffered as much from being a socialized credit system and a National Socialist ideology.

This ideology is still with us within the right wing around the world, at its base it has never changed, it is anti-parliamentary, anti-democratic, but you can vote, as you are told, because all this just gets in the way of the great leaders will.

Unfortunately now that I think of it perhaps it is too much to ask you the founder of the  Manning Centre » Preston Manning, President and CEO, to speak out for defence of our democratic freedoms, of speech, assembly, protest, etc. Principles now challenged by Harpers bill C51.

Or his bill C24 which strip Canadians of their citizenship in violation of UN principles and the principles of the Magna Carta

Or the bills to demand Unions provide financial information to the public, while political parties and corporations don’t have too. We have an identical bill used against First Nations when they receive government funds

We have the total destruction of Science and Research done by the Federal Government. Including libraries and research document holdings being destroyed, the only thing missing is the mass public bonfires. Perfect for Halloween or Guy Fawkes day.

Of course among conservatives there are those proponents of individual freedom and personal choice  that call themselves democratic or libertarian, as in civil libertarian, civil liberties do not conflict with conservative principles based on English jurisprudence.

On the other hand there is the right wing school of thought that embraces Pharaonism, Caesarism, the  Fuhrer Principle, the Strong Man theory of history. In this case the writings and teachings of two University of Chicago professors, Leo Strauss, and Carl Schmitt both idealized the leader of the nation ruling over and uninhibited by the peoples tribunes their parliament, judiciary, senate, all bodies of the state. The strong man simply walks over, tramples, or ignores, all such laws as he does not need or approve of. This of course was one of the schools of thought in the think tank that bred Harper at the University of Calgary.

It is time that those conservatives like yourself decide which side of history you are on those of civil libertarian democrat or those of the strong man Stephen Harper school.

Since you have not spoken out opposing his actions at the time, perhaps now in the final days of this historic election you can once again dig deep into your democratic morals and ethics to really see  Steve in that light how can you remain unmoved to speak out against him.

Mr. Manning you have a chance to make a real difference this election, one that says principles are more important than the party or the man running it. But rather the will of the people, and the people themselves rule, and are not ruled by the party or the leader.

This election we have seen quite clearly it is about one man, not his party, or the Conservative MP’s or Senators, it is about Stephen Harper, as much as he says its not about him. Of course it is.

You once believed that our MP’s were responsible to the voters, and to their constituents, not that they were party men and women who simply transmit the will of the PMO down to the peons.

Sir; as a conscientious compassionate conservative democrat and civil libertarian how can you sit by and remain silent.

Yours for Democracy,

Eugene Plawiuk

Notes and References

Manning Centre for Building Democracy - Facebook

Populism in Europe and the Americas: Threat Or Corrective for Democracy? Populism and Democracy in Canada's Reform Party  

Preston Manning Wikipedia Bio

Number of years Ernest Manning was Premier of Alberta: 25 [1943–1968]

#elxn43 #cdnpoli #abpli #manning 

Bio Fuels = Eco Disaster

The production of biofuels, long a cornerstone of the quest for greener energy, may sometimes create more harmful emissions than fossil fuels, scientific studies are finding.

Says the NYTimes in an article on Palm Oil. Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare

As I have blogged here, Palm Oil production is creating an eco disaster in Indonesia and Malaysia with wildfires and threats to the endangered Organutan population.

And with both the Bush and Harper regimes promoting biofuels in grains and corn the result is increasing prices for these commodities which adversely affect other farm commodities like pork.

The Chair of Manitoba Pork Council says swine producers on the two sides of the Canada U.S. border share a common concern over rapidly rising feed prices resulting from expanded ethanol production.

And this is why the Harpocrites want to open the market up to the big Agribusiness giants like ADM and Cargill who also produce soya, palm oil, etc. But to do that they must eliminate the Wheat Board.

Biofuels are not ecologically sound alternatives to petroleum, they are just another capitalist band-aid, like Kyoto with its carbon exchange marketing.

Capitalism can only offer 'profit based' ways of adjusting to the current ecological and environmental crisis we face. That is because this crisis is about capitalism, which is not sustainable.

That is the real problem of Green Capitalism and all the so called Green alternatives, they are not alternatives at all, merely attempts to ameliorate the worst excesses of capitalism.

Without the development of democratic self managed (worker community control) socialism, capitalism Green or otherwise will continue to lead to planetary entropy.


See

GMO News Roundup

Lost and Found

Boreno is Burning

Bio-Fuels


Find blog posts, photos, events and more off-site about:
primates, organutan, , ADM, ArcherDaniels Midland, , bio-fuels, Canada Wheat Board, , capitalism, Cargill, , ecology, , Environment, , Green, green capitalism, Indonesia, Kyoto, palm oil, , socialism, sustainable, workers control

Welfare for Millionaires

Gee wonder why the Conservatives just don't tell these folks about how their tax breaks are going to help them down on the farm. You know 5% is a Canadian Value. Ingrates.

So when in doubt sign over more welfare checks to farmers while you try and shut down the Wheat Board. Makes sense eh.

Note that the Ontario farmers protesting are demanding a protectionist market and subsidies like the US grants its agribusiness. Not exactly Tory farm policy.....Strahl doesn't mention market-solutions for protesting Farmers

Now imagine the crisis on the farm if we had a free and open market with no Wheat Board or other producer run cooperatives or marketing boards. It would be the end of the so called 'family farm'. Which is long in the tooth and almost non-existant in Canada now.

Strahl promises better relief for struggling farmers
CTV.ca - 9 hours ago
As thousands of farmers converge on Parliament Hill for a massive rally, Federal Agriculture Minister Chuck Strahl is promising better relief for cash-strapped producers.
Provinces have to help, Strahl tells farmers Globe and Mail
Harper promises money for farmers Toronto Star
Brandon Sun - Reuters Canada - CBC Manitoba - 580 CFRA Radio -

Yep these guys would all be gone and all that would be left would be big Agribusiness corporations. Who would then demand subsidies like they do in the US.

Its the battle between the farmer Millionaires versus the Corporate Agri-Billionaires.

And the irony is that these guys are the right wing backbone of the Tories, who demand they kick folks off welfare.



Find blog posts, photos, events and more off-site about:
farmers, Canada, politics, Harper, Conservatives, Government, farm-crisis, Strahl

Liberal Bombshell & Harper Lies

Wow just finished watching tonight's Leadership debate. Much better format, got to actually have some debate. Excellent moderator. Exciting to watch.

The Liberals are absolutely desperate, Paul Martin dropped a bombshell tonight announcing that he will bring in legislation to eliminate the Not Withstanding Clause from the Constitution. This was planned in the war room. Though I think Martin pulled the pin on this particular handgrenade too early and had to toss it into the fray early. Jaws dropped, Harper sputtered and defended the status quo.

Duceppe great line of the night Martin runs like an NDP and governs like the Tories and he got Martin to say Fiscal Imbalance then he got Martin to admit that Quebec is a country.

Harper remembers something about the Conservative plan for the constitution and says if there is any Constitutional change he wants private property put in.

Duceppe and Layton tag teamed it tonight like the good old days of Stampede Wrestling. Beating up on both the Conservatives and Liberals alike.

Martin, Duceppe and Layton ask Harper for his list of leadership donors. Harper lies and says its public. Duceppe and Layton pipe up oh really when did that happen.

Layton stayed on message looked at the camera and said if you want change real change vote NDP.

Harper says that the lowest paid Canadians will get no Liberal tax cut, so his GST cut will help them. Martin reminds economist Harper that his government took hundreds of thousands off the tax roles. Harper says his tax cut will help them. Layton reminds him that his tax cut will hurt working poor and middle class still pay taxes. Harper can't give cost of his promises, and insists his roll back of the Liberal tax plan won't hurt average Canadian taxpayers. He lies again.

Tory tax plan worries some business leaders

Duceppe reminds viewers that when he raised Options Canada, $4.8 million dollar secret National Yes campaign slush fund for the 1995 referendum, in the house the Torys and Liberals defeated his motion. He says Options Canada is not a Liberal scandal but a Liberal, Tory, Federalist scandal. Uh oh.

New book on unity fund adds to Liberal woes

Harper defends supply side management and monopoly of agricultural products in Eastern Canada and Quebec but says he wants to get rid of the Wheat Board and replace it with two tier market model. Wheat Board and open borders.

Harper smiles and looks into the camera. Harper actually smiles not grimaces.

Martin looks like death warmed over.

Layton has a winning smile looks into the camera and talks to viewers.

Duceppe smirks.

Leaders bring grim game face into English debate

Martin, Layton, talk about the 'working class' in Canada. Let me repeat that, no not working families or working Canadians, both Martin and Layton say working class Canadians. Martin says it first. Buzz must be rubbing off on him.

Duceppe in the background 'answer the question' he says repeatedly until Martin says yes he has always said Quebec is a nation.

Harper says he can work with anybody if he is the government. Won't say if he thinks he will be a majority or minority government.

Layton says he can work with whoever is government, outlines his program, five points, repeats it several times. Calls for a vote for the NDP for change.

Harper praises Ed Broadbents NDP plans for electoral reform says they dovetail with his.

Layton hits everyone on supporting his better balanced budget, clarifies that it was the NDP budget not the Liberal budget last summer that passed and Harper and Duceppe opposed it.

Layton doesn't worry about Quebec being a country he says he wants a flexible confederation and get Quebec to sign the Constitution.

Tonights winner, a tie, the tag team of Duceppe and Layton.

Loser Harper, no big hit on Martin, almost looked prime ministerial, took body blow, lied.

Bigger Loser Martin, looks punch drunk, challeged Duceppe and got beat up.

But pulled constitutional rabbit out of the hat which will be THE news story tonight and tomorrow. Martin vows to end federal notwithstanding clause



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PAKISTAN

The cost of the shadow economy

Dr Abdul Wahid

Published March 13, 2023 


The informal sector’s contribution to Pakistan’s economy is remarkable as it adds a handsome volume of approximately $661 billion, tantamount to 35.6 per cent of GDP. According to the International Labour Organisation, it constitutes 75pc and 68pc of jobs in rural and urban areas; however, it is pregnant with issues like child and bonded labour, gender-based discrimination, and insecurities in the workplace.

Moreover, it embodies small and medium enterprises (SMEs) that are populated by self-employed entrepreneurs, small businesses, informal associations, and street vendors in agriculture and micro-enterprise setups, and thus, they tend to be more resilient to economic downturns. Despite its volume and contribution to the economy, the informal sector creates financial vulnerabilities for formal setups.

Let’s consider the formal market. The Growth Enterprise Market (GEM) board of the Pakistan Stock Exchange (PSX) is a sub-market for SMEs and high-growth companies looking to go public. The GEM board was established following Alternative Investment Market in London, which itself was established in 1995 by the London Stock Exchange as a sub-market to provide a market for SMEs, business startups, and incubates to raise capital and provide a platform for investors to access returns from small businesses.

It has become one of the world’s leading growth markets in the UK for smaller companies, with over 3,000 listed companies from over 70 countries. Though companies listed on the GEM board in Pakistan are subject to less stringent listing criteria and regulations as compared to the ones listed on the main board of the PSX, to the present date, only three SMEs made it to the GEM board, i.e. Pak Agro Packaging Ltd, Supernet Ltd and Universal Network Systems.

Informal setups are backed by special interest groups through a complex mix of tax laws and regulatory compliances for the formal sector

This anomaly has a handful of reasons, like investor participation seems minuscule as only 0.3 million accounts are registered with the National Clearing Company of Pakistan Limited out of around 57.5m bank accounts. This indicates less than 0.5pc of investor participation at the PSX forum.

Investor participation, driven by incentivisation and a less stringent regulatory burden to the informal sector, is visible in real estate property pricing bubbles, higher forex trading returns, and inflationary pressure. These avenues produce ample easy money with the least risk and low regularity compliances under state patronage.

The Imran Khan-led government launched a construction amnesty scheme to promote housing to generate jobs and fill the gap of millions of housing unit shortages. According to Zameen.com, since 2018, the average per square feet price has increased from Rs3,300 to 7,000, which is 26pc returns per annum in open plots investment in Islamabad.

It not only doubled the real estate prices in other cities such as Karachi, Lahore, Peshawar and Faisalabad but also shifted the investment chunk toward the real estate sector. Many industrialists shifted their attention to the real estate sector.

Similarly, the gold price in December 2017 was Rs56,200 per tola, but now it is Rs201,000 per tola, which is more than 50pc return per annum in gold investment. Likewise, on 14 Jan 2018, the exchange rate of rupees to the dollar was Rs110 to a dollar, and now it is Rs278 — an average of 30-35pc returns per annum.

On the flip side, KSE-100 Index provided compounded annual returns of 14.55pc, and industrial profit was recorded at less than 15pc per annum. The inflation rate in 2018 was 5.08pc, and now it is above 30pc. If the inflation-adjusted returns per annum are calculated, it can be said that the real return an investor receives in the formal market and industrial setup is negative.

Pakistan already has one of the highest income tax rates in the world as far as corporations are concerned, which further depicts a decrease in the wealth of formal sector investors. Consequently, since 2013, more than 200 companies have been delisted from PSX. Only 526 companies are listed on the main board, and just three SMEs are listed on the GEM board; however, the total number of registered companies with the Securities and Exchange Commission of Pakistan now stands at 176,000.

The prominent explanation for delisting is a cost-benefit trade-off. If a listed firm’s marginal benefit/cost ratio is less than shedding avoidable costs, this may lead to de-capitalisation.

Nevertheless, investor participation is more in informal sectors in which most of the businesses are unregistered. The Asian Development Bank (ADB) confirms that more than 90pc of the SMEs that operate in the informal sector are set up with the help of family members and friends.

These businesses generally operate in agri-business, food chain, agri-machinery, and textile sectors. Some of these raise money for seasonal products and services and wind up their business when the season ends. These setups are more visible during harvest in rural areas and in food chain industries in urban areas. They earn money by stocking up on necessities like sugar, flour, wheat, grains, oils etc.

They employ the staff on a seasonal or contractual basis and then lay them off. Furthermore, fewer salaries are paid to them compared to minimum wages in cash form without any social security i.e. health insurance and accommodation. Consequently, social and financial vulnerabilities for unemployed youth are increasing drastically, resulting in modern slavery.

Informalisation is proliferated to avoid income tax, intense documentation and regulation, which further fuels decapitalisation and insecurities in the labour market. These informal setups are backed by special interest groups of local politicians, families of bureaucrats, and land elites through a complex mix of tax laws and regulatory compliances for the formal sector.

The writer is an Assistant Professor (PhD Financial Economics) at the National University of Modern Languages, Islamabad. He can be reached at (abwahid.fms@gmail.com)

Published in Dawn, The Business and Finance Weekly, March 13th, 2023

WHY FARMERS CREATED THE CANADIAN WHEAT BOARD
Drought-battered producers facing another crisis — contract penalties

Deadly combo of crop failures and sky-high prices leave some facing huge penalties on unfulfilled contracts

By Alexis Kienlen
Reporter
Published: August 9, 2021

Although this harvest will be meagre, Jason Saunders expects to fulfil his grain contracts this year. But countless farmers across the Prairies won’t be able to — and many face substantial penalties when they can least afford it. Photo: Supplied

The drought is squeezing producers from all sides, with many facing another calamity — not having enough crop to fulfil their grain contracts.

“There are issues because the drought is so widespread,” said Jason Saunders, vice-chair of Alberta Wheat and a dryland farmer from near Taber. “There was aggressive forward contracting on canola and old-crop wheat because of the record-high prices happening in the spring.

In normal times, there’s the option of sourcing canola or grain from farmers who have a good crop. Moreover, prices tend to fall between the time a portion of the crop was pre-sold and harvest.

But that’s not the case this year.

“This year is different, because more areas have been hit by drought. Finding the production needed won’t be easy — it’s a Prairie-wide issue,” said Saunders.

Not being able to fulfil contracts — and having to take a big loss — are a huge concern this year as prices, especially for canola, are sky high and producers were more likely to forward contract, said Alberta Canola general manager Ward Toma.

“We’ve had two very rare events happening at the same time,” he said. “Historical, high, never-heard-before prices at the same time we’re having a historic low production that is shrinking every day.

“We see crop disappearing every day because of the dry condition in the Prairies, and we see record prices at the same time.”

But there’s little that his organization, or others, can do once a contract has been signed, said Toma.

“It’s a voluntary contract between you and the grain company,” he said. “You accepted it, and that’s part of the problem. With contract law, you sign that document and you (have to) abide by those terms.”

Kevin Auch took a “very conservative” approach when pre-selling part of his pea crop. But he’s not sure he’ll even harvest the 13 bushels an acre he needs to fulfil that contract. photo: Supplied

However, many producers “just look at the price” or assume that if they have a complete wreck, there’s some sort of way out.

“Unfortunately, we have people learning these things the hard way,” he said. “They don’t take the time to read the contract and understand what the terms are. They just look at the price.”
Be up front

But there are other reasons why farmers sign grain contracts.

“The idea is that you pre-sell some of your crop, so you get harvest movement or soon thereafter,” said Sylvan Lake producer Mike Ammeter. “It’s a cash flow issue — I need the money, I need this grain sold and to get it moved — (or) maybe it’s a storage issue.”

Pre-selling is not uncommon but “it’s all over the map as to how farmers approach that,” he added.

Some are more aggressive but even those who take a conservative approach can be caught in a year like this one, said Ammeter.

“Maybe it’s your habit to pre-sell 20 to 30 per cent of your crop, and now you’ve got nothing. How do you tackle that?”

The first thing to do is to call the grain company, he said.

“You have to do your best to negotiate out of it. Be up front and do your best to come to an agreement on how you’re going to settle this.”

That’s the advice that farm organizations across the Prairies are giving their members right now. But again, this year is different. For example, in past years some companies might have agreed to roll the contract over to next year. But this year, grain companies are in a bind, too, noted Toma.

“The shortage of the crop is going to be a problem — not just for the farmers who can’t deliver the product, but also to the grain companies that can’t make their deliveries,” he said.

It all makes for a very tough situation.

“I don’t see the grain companies would allow you to purchase back your grain (contract) until you harvest and you deliver everything you’ve got,” said Saunders. “And then if you’re still short, it would be a case where (you) would buy it at market price.”

Nevertheless, contact your grain company immediately, he said.

“Grain companies that get a phone call from producers saying they are short — they have to send their representatives out to look at the field. They don’t take your word for it, unless there has been a widespread hailstorm.”

Also, during droughts people often think they have less crop than they do, said Saunders, who is pretty sure he will be able to fill his contracts.

“We’re harvesting our winter wheat right now,” he said in an interview in late July. “It’s not very good, but there’s still something. At times, people are just saying there’s zero. They can be short, and not be at zero.”
One-sided deals?

But the situation is once again shining a light on the nature of these contracts, which Saunders calls one sided.

“They (grain companies) have out clauses, but there aren’t any out clauses for producers,” he said. “I think an equal contract is all I could ever argue for at this point — one that has equal risk and liability on both sides.”

Although smaller companies handling special crops might let a producer out of a contract, Saunders said he has never seen a large grain company or a primary elevator do that.

Even though he only pre-sold a small portion of his pea crop, Carmangay producer Kevin Auch doesn’t know if he’ll harvest enough for his contract.

“A 13-bushel-acre average is what I’ve contracted, but this is the worst crop I’ve seen since the 1980s,” he said. “I thought I was being very conservative, but I might be short on my contract a little. It’s going to be nip and tuck here.”

Some farmers may find themselves first delivering whatever they harvested to the elevator and writing a cheque to a grain company, he said.

“Some of them say, ‘You’ll make up the difference between the price that you contracted it for, and the price that it is now — that could be $2, $3, $4 a bushel depending on what it is,” said Auch. “It gets a little scary when you’re having to take $2, $3, $4 a bushel out of the meagre crop that you have and apply it to the crop you’re short on.”

Producers should pull out their contracts and give them a thorough read, he said.

“Some contracts have Act of God clauses, so if you have that, you’re fine. It just depends on what the contract says.”

However, Act of God clauses are more common in pulses and specialty crops, and are not commonly seen in wheat and canola, he said, adding a grain company “can’t take that loss either.”

“They make their money by shipping the grain,” said Auch. “They have a margin in there, and that’s the margin that they pay to get it to the customer. Now the customer is still expecting that product at that price.”

While some have argued crop commissions in the Prairie provinces, should band together to pressure grain companies to make contracts more fair to farmers, their role is very limited in this regard, he said

“The only thing commissions could do is inform farmers of what they are signing … (and) warning farmers of some of the pitfalls,” said Auch, who served as Alberta Wheat chair in 2016-18.

The advice to call your grain company as soon as possible really is the best option, he added.

“I’ve already talked to one of my grain buyers that I am going to be short on my pea crop,” he said. “They are aware of that, and if they have anything on their end that they can start working on, they can mitigate it.”

You should also talk to the grain company about any fees, said Daryl Fransoo, chair of the Western Canadian Wheat Growers Association.

Often, producers aren’t aware of the fees and that they can vary widely, said the Saskatchewan farmer who has been taking a lot of calls from growers worried about their contracts.

“Farmers are getting charged over and above the spread when they’re buying their contract out,” said Fransoo. “Grain companies are calling it an administration fee. It differs greatly between companies.”

ABOUT THE AUTHOR
Alexis Kienlen lives in Edmonton and has been writing for Alberta Farmer since 2008. Originally from Saskatoon, Alexis is also the author of two collections of poetry, a biography, and a novel called "Mad Cow."

The Russian War In Ukraine And Its Impact On Africa – Analysis

 March 18, 2022  

By Dr. Mohamed Chtatou

When Vladimir Putin, the president of Russia, started sending thousands of soldiers and tanks to the border of Ukraine, many thought he just wanted to make a show of force. The two countries are very similar and were once very close. But this was no joke, in the least, Putin meant business. His hidden agenda is to absorb peaceful Ukraine into the Russian Federation on the ground that it is an act of self-defense in reaction to the West’s territorial encroachment that aims at surrounding Russia to weaken it.

Russian violation of national sovereignty and territorial integrity of a peaceful Ukraine

However, on February 24, 2022, the Russian army started to enter and bomb Ukraine. In truth, we have to go back in time a bit: things have been going badly between the two countries for at least eight years. In 2014, people in Kyiv, the capital, began to demand more freedom and closer ties with the European Union and the West. The Ukrainian president at the time, who was a friend of Russia, was even forced to flee.

Shortly thereafter, in response, Russia had already invaded a part of Ukraine, Crimea, which it considered its own. In another part of the east of the country, the Donbas, a first war broke out between those who wanted to move closer to Russia and those who feared that Ukraine would be cut into pieces. For eight years, several countries (including Switzerland) tried to bring peace between the Ukrainian brothers. But they did not succeed.

Vladimir Putin now explains that he wants to defend the Ukrainians who feel more Russian. According to him, they were “threatened” and they needed his help. However, he has also given a whole series of other justifications that blur his real objectives. For example, it seems that the Russian president does not really recognize Ukraine’s right to be an independent country from Russia. He also believes that if Ukraine moves closer to Western Europe, and especially if it becomes part of the military alliance that includes these countries as well as the United States and Canada (NATO), Russia will find itself surrounded by enemies.

In the past, Russia was a vast empire that extended far beyond its current borders. From his statements, Vladimir Putin seems to consider that he must forever maintain special ties with the other countries that made up this empire. But the vast majority of Ukrainians do not share this opinion at all, and they are ready today to defend their country.

The intensity and scale of the invasion of Ukraine by the Russian army is causing a humanitarian catastrophe of a severity not seen in Europe since the Second World War. This attack is led by one of the most powerful armies in the world against a country of 44 million inhabitants before the invasion. As proof of the violence of the fighting, over 3 million Ukrainians have already fled to neighboring countries, mainly to Poland.

Refugees are crossing to neighboring countries to the west, such as Poland, Romania, Slovakia, Hungary, Moldova, Belarus, and even Russia.

The UN says that as of March 14, 2022:

• Poland had taken in 1,808,436 refugees
• Hungary 263,888
• Slovakia 213,000
• Moldova 337,215
• Romania 453,432
• Russia 142,994
• Belarus 1,475

The speed of this exodus is unprecedented. There are already more Ukrainian refugees in European countries than the number of Syrians who fled the war in their country in 2015. At the time, there was talk of a refugee “crisis.” Europe, with the exception of Germany, had closed its borders. Today, the attitude towards the Ukrainians is quite different. But how long will the countries bordering Ukraine be able to cope with this influx?

Ukrainians trapped in bombed-out cities

The situation is even more dramatic inside Ukraine. After failing to quickly take the capital, Kyiv, to replace the Ukrainian government, the Russian army has stepped up its bombing in an attempt to break the Ukrainians’ resistance. The strikes on densely populated cities are causing many casualties among the inhabitants.

According to the UN, hundreds of civilians have been killed since the beginning of the invasion on February 24,2022. But these are only the deaths that could be confirmed. The human toll is likely to be much higher. And the death and injury toll will continue to rise as long as the war continues.

As of Sunday, March 13, 2022, at least 636 civilians have died in Ukraine since the Russian invasion began, the UN Human Rights office (OHCHR) said Monday in a statement.

According to the agency, at least 1,125 civilians have been injured so far: 

“Most of the civilian casualties recorded were caused by the use of explosive weapons with a wide impact area, including shelling from heavy artillery and multi-launch rocket systems, and missile and air strikes,”

the agency said.

“OHCHR believes that the actual figures are considerably higher, especially in Government-controlled territory and especially in recent days, as the receipt of information from some locations where intense hostilities have been going on has been delayed and many reports are still pending corroboration,”

it added.

Besides, hundreds of thousands of Ukrainians are trapped in bombed-out cities. Some of them are surrounded by the Russian army. In the besieged cities, the population is finding it increasingly difficult to find drinking water or food. Negotiations between Ukraine and Russia continue, despite the fighting, to evacuate the population of several cities. But, for this, ceasefires are needed so that the inhabitants can be evacuated.

This is the first time that war has occurred in a country with so many nuclear reactors. Moreover, the worst accident in the history of civil nuclear power occurred in Ukraine in 1986, when a reactor exploded in Chernobyl and caused the death of many people. Today, nearly 2600 km² remain off-limits around the site because of radioactivity. However, this area has been invaded by the Russian army, as well as the nuclear power plant of Zaporijjia (six reactors), in the south of Ukraine.

Africa cannot remain indifferent to the Russian aggression

As the war in Ukraine continues, the African Union has clarified its position by condemning the Russian invasion. In such political crises, Africa has often refrained from revealing its position, a move often interpreted as the reason for its inaudible position on the international scene.

But this time, the continent could hardly remain indifferent to the Russian invasion, especially since Moscow also has close relations with several African countries.

The current chairman of the African Union (AU), Macky Sall, and the chairman of the AU Commission, Moussa Faki Mahamat, expressed their extreme concern about the very serious and dangerous situation created in Ukraine.

In their statement, they called on the Russian Federation and any other regional or international actor to imperatively respect international law, territorial integrity, and national sovereignty of Ukraine.

The current Chairman of the African Union and the Chairman of the African Union Commission urged both parties to the immediate establishment of a ceasefire and the opening without delay of political negotiations under the auspices of the United Nations, in order to save the world from the consequences of a global conflict, for peace and stability in international relations for the benefit of all peoples of the world.

On another level, African countries are concerned about the fate of their nationals who try to leave the country. They also remember the aid that used to come from Russia and Ukraine.

The current Chairman of the African Union and President of the Republic of Senegal, H.E. Macky Sall, and the Chairperson of the African Union Commission, Moussa Faki Mahamat, are following closely the developments in Ukraine and are particularly concerned about reports that African citizens on the Ukrainian side of the border are being denied the right to cross the border to safety.

Both Presidents reiterate that all persons have the right to cross international borders during conflict and, as such, should have the same rights to cross the border to safety from the conflict in Ukraine, regardless of their nationality or racial identity.

Reports that Africans are subject to unacceptable differential treatment are offensive and racist and violate international law. In this regard, the Presidents urge all countries to respect international law and to show equal empathy and support to all people fleeing war, regardless of their racial identity.

The Chairpersons commend the extraordinary mobilization of the AU Member States and their Embassies in neighboring countries to receive and guide African citizens and their families who are trying to cross the border of Ukraine to safety.

African states’ reaction to the war in Ukraine

Africa represents more than 25% of the seats in the UN General Assembly. In a vote on a resolution condemning Russian military aggression, only Eritrea voted against the resolution, while 28 African countries condemned the Russian action. But 17 African countries abstained and 8 other countries did not take part in the vote. How to explain the different positions within the African continent?

We should rather speak of “the” Africas, insofar as Africa is not a monolithic block and the contingency of international relations means that many reactions are due to national issues. Kenya’s reaction at the UN Security Council is enlightening in this respect: the Kenyan representative calmly recalled that the African continent had been colonized by the great European powers and that the populations had been separated by the borders drawn, but that this did not mean that there were incessant wars because the African states had learned to live with this division. This is a good lesson for Russia. It should be noted that the representative recalled from the outset the sacrosanct principle of the intangibility of borders, a principle affirmed by the Organization of African Unity (OAU) in 1963.

This explains the cautious reactions: the African Union does not condemn, but calls for respect of international law and the sovereignty of Ukraine. This does not mean that African states support Russia: on the contrary, none, not even Mali or the Democratic Republic of Congo where Russia is present with the Wagner company, have given their support to the invasion. What might appear to be diplomatic prudence is not so insignificant when a nuclear power flouts international law.

However, this prudence can be explained by two main factors:

• The risks of separatism faced by certain African states, and;
• Their dependence on Russia, particularly in terms of grain. Tunisia and Egypt import wheat, notably from Russia and Ukraine.

We can see that the current situation is also summed up by the power games between the West and Russia. There is no distinction made between NATO and the West. It is interesting to follow the distinction that could be made between the cautious diplomatic positioning of the diplomats and the more assertive and clearly pro-Russian public opinions. They have nothing to do with a form of the third way. On the contrary, they share with Russia a rejection of Western values and denounce a form of Western hypocrisy, which condemns the invasion of Ukraine but has not hesitated to intervene in Syria, Libya, or Afghanistan. The double standard is denounced. From the Afro Barometers, we see that the share of positive popular perceptions of Russia and China has increased significantly over the past five years. This reflects Russia’s economic, political and military commitment, but also the role of its propaganda media.

There is also some African ambiguity about Russia, with the public seeing Putin as a strongman who would therefore have the right to decide on a country’s future security alliances while being very concerned about their sovereignty. It seems to him that there is a great deal of Russian political mythology, disseminated and maintained by Putin, that is shared by African populations: moral equivalence between Russian and NATO interventions, strong anti-imperialism, anti-Americanism, the politics of humiliation, the feeling that history is written by the victors. All this will be interesting to follow. 

The international order, a few years ago, was still unipolar. We are now moving towards a bipolarization. It is an unstable, interdependent system. However, it is not in the interest of any state to declare itself at odds with international law, especially small states, for whom international institutions are power relays.

Grains at the center of geopolitics

Wheat and other grains are once again at the center of geopolitics after Russia’s invasion of Ukraine. With both countries playing a major role in the global agricultural market, African leaders need to pay attention.

Agricultural trade between the continent’s countries and Russia and Ukraine is significant. African countries imported $4 billion worth of agricultural products from Russia in 2020. About 90% of these products were wheat, and 6% were sunflower oil. The main importing countries were Egypt, which accounted for almost half of the imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya, and South Africa.

Similarly, Ukraine exported $2.9 billion worth of agricultural products to the African continent in 2020. About 48% of these products were wheat, 31% corn, and the rest was sunflower oil, barley, and soybeans.

Russia and Ukraine are major players in the global commodity market. Russia supplies about 10% of the world’s wheat, while Ukraine produces 4%. Collectively, this represents almost the entire wheat production of the European Union. This grain is intended for domestic consumption and export markets. Together, these two countries account for a quarter of global wheat exports; in 2020, they amounted to 18% for Russia and 8% for Ukraine.

These two countries are also key players in the corn sector, with a combined production of 4%. However, when it comes to exports, Ukraine and Russia’s contribution is much larger, with 14% of global corn exports in 2020. They are also among the leading producers and exporters of sunflower oil. In 2020, Ukraine’s sunflower oil exports accounted for 40% of global exports, compared to 18% for Russia.

Russia’s military action has caused panic among some analysts, who fear that the intensification of the conflict could disrupt trade, with serious implications for global food stability.

I share these concerns, particularly with regard to the consequences of a spike in global grain and oilseed prices. These are among the driving forces behind the rise in global food prices since 2020. This is mainly due to droughts in South America and Indonesia, which have led to crop failures, and increased demand in China and India.

The disruption of trade, due to the invasion, in this important Black Sea grain-producing region would contribute to higher international agricultural commodity prices, with potential negative impacts on global food prices. An increase in commodity prices was visible only days after the conflict began.

This is a concern for the African continent, which is a net importer of wheat and sunflower oil. In addition, there are concerns about drought in some parts of the continent. The disruption of shipments of essential commodities would only add to the general concern about food price inflation in a region that imports wheat.

War in Ukraine: what consequences for the African economy? 

The war in Ukraine has, undoubtedly, terrible consequences on the African economy: an increase in the price of gas, oil, agricultural raw materials. The invasion of Ukraine by Russia risks destabilizing the African economy still in remission of the COVID 19 pandemic.

In an interconnected world, any conflict can have repercussions beyond the battlefield. Africa will not be spared the economic and political consequences of Russia’s invasion of Ukraine, observes the continent’s press.

The lasting relationship that Russia has built with Africa will be put to the test by the current crisis in Ukraine, analysts tell the Pan-African website Africanews.

Thus, on the Pan-African level, through the voice of its current chairman Macky Sall, the African Union (AU) was quick to express extreme concern about the very serious and dangerous situation created in Ukraine, while calling on Russia to imperative respect for international law, territorial integrity and national sovereignty of Ukraine.

Officially, South Africa is on the side of peace. In a letter to the nation published Monday, March 7, 2022, President Cyril Ramaphosa called for a resolution of the conflict between Russia and Ukraine through dialogue. This position is in keeping with the restraint that characterizes South African diplomatic practices, even if the Russian influence within the ruling African National Congress (ANC) raises questions.

On the first day of the Russian invasion, February 24, 2022, South Africa surprised everyone by calling on Russia, through its Department of International Relations (the Ministry of Foreign Affairs), to immediately withdraw its forces from Ukraine. The stance came as a surprise, since South Africa, which is also a member of the BRICS group (along with Brazil, Russia, India, and China) and is close to Moscow, is usually more measured in its diplomacy. It was quickly followed by unease within the executive.

Another reaction came from Morocco, which indicated through its Foreign Ministry that it was following with concern the evolution of the situation between the Russian Federation and Ukraine, reports the Moroccan website Le 360.

As for Algeria, a historical ally of Russia, it simply called on its citizens in Ukraine to respect the security instructions, reports Dzair Daily.

In the African press, the most glaring concern is about grain imports from Ukraine and Russia and the fear of disruptions in supply and prices, says Africanews. The Continent has the same analysis, recalling the importance of Russian wheat.

The Tunisian Central Bank decided to maintain its key rate at 6.25%, during a meeting of its board of directors held on Monday, March 14, 2022. The announcement comes in a context marked by global inflation which has affected commodity prices. Internationally, the Tunisian Central Bank is following with great attention the fallout from the Russian-Ukrainian war on global business, on supply chains, and on the international prices of raw materials and basic foodstuffs, which are likely to have a strong impact on inflation, the institution said.

UN Secretary-General Antonio Guterres warned on Monday, March 14 2022 that the repercussions of Russia’s war in Ukraine could result in a hurricane of famine in many countries. Highly dependent on imports of wheat and other essential foodstuffs, most countries around the Mediterranean and the rest of the continent are preparing to suffer a major shock.

The outlook for African countries is bleak in the wake of the war in Ukraine. The cessation of exports of cereals, including wheat, and other agricultural inputs, will hit most of them hard, as they are already facing a structural food crisis (climatic disturbances, conflicts) or have been considerably weakened by price increases and stock market speculation on essential products.

Moscow and Kyiv account for 34% of trade in wheat, a commodity that has increased by 70% since the beginning of the year. The countries around the Mediterranean are suffering greatly. For Egypt, this represents 80% of imports. It is the largest importer of wheat in the world (12 million tons). The country has three or four months of stock, estimates Jean-François Loiseau, president of the French cereal interprofession Intercéréales. The price of bread has jumped by 50% since the beginning of the Russian invasion of Ukraine. Cairo is considering an increase in the price of the subsidized wafer intended for low-income earners. A risk not taken since the bread riots of 1977.

This is a source of concern for other countries in the region, such as those in the Sahel and West Africa, historically net importers of food. Algerians, for example, remember the riots of 2011 following a sudden surge in oil and sugar prices that spilled over into other consumer goods. In some areas of Algiers, stores were stormed by groups of young people. Demonstrations broke out 250 km away in the city of Béjaïa, in Kabylia, and as far away as Constantine, the capital of the east of the country. However, Algiers is hoping to cushion this shock with additional earnings from gas exports, just like Morocco for phosphates, whose price is rising.

On the other hand, the food insecurity from which the poor populations in Lebanon, Yemen, Syria and Sudan, torn by internal conflicts, are already suffering, is going to increase. According to the UN Food and Agriculture Organization (FAO), world food prices reached a record high in February, up 3.9% from January.

Europe and Africa will be very deeply destabilized in terms of food in the next 12 to 18 months, warned Emmanuel Macron on Friday, March 11, 2022, at the end of a European summit in Versailles (Informal meeting of heads of state or government, Versailles, 10-11 March 2022.) Beyond this observation, African countries need a real safeguard plan to avoid the explosion of famine feared by the World Food Program (WFP).

Dr. Mohamed Chtatou

Dr. Mohamed Chtatou is a Professor of education science at the university in Rabat. He is currently a political analyst with Moroccan, Gulf, French, Italian and British media on politics and culture in the Middle East, Islam and Islamism as well as terrorism. He is, also, a specialist on political Islam in the MENA region with interest in the roots of terrorism and religious extremism.