Russia Is Holding Ukraine’s Farms Hostage

With its abundant natural gas supply, Russia has long wielded its resource riches to bludgeon Ukraine, Europe, and other dependent customers. By continuously threatening the future of the Black Sea Grain Initiative, the landmark wartime agreement designed to open up Ukraine’s key farm output for export to world markets, Moscow has also found a way to strangle Kyiv’s agricultural sector—and weaponize resources that aren’t even its own.

Those tactics were on full display this week as negotiators raced to broker a full extension to the grain deal before its scheduled expiration on Monday, the latest scramble to save a key deal that helped ease pressures on vulnerable markets in the wake of Russia’s invasion of Ukraine. Since the deal took force in July 2022, Moscow has repeatedly attempted to upend the agreement to extract key concessions, intensifying concerns about the future of Ukraine’s hard-hit agricultural industry and the global food insecurity. 

“This continues to be very much an issue not just for Ukraine producers but also globally,” said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute and former chief economist at the U.S. Department of Agriculture. “Ukraine has been a very important supplier, and if they have to continue with diminished production over another year, that means that the world will have to find wheat and corn from others to replace that.” 

It’s still not clear if Russia is ready to blink again and continue allowing exports or if this time it will try to scupper the deal. Turkish President Recep Tayyip Erdogan said Friday that Russia had agreed to extend the deal—before the Kremlin said it had decided no such thing.

With just days until the deal would expire, Russian President Vladimir Putin continued to press for concessions and extract leverage. For months, the main sticking point in negotiations has been Russia’s own food and fertilizer exports: While excluded from Western sanctions, Moscow says its exports have been hampered by sanctions targeting insurance and payment companies over its invasion of Ukraine. 

On Thursday, Putin warned that “not one” of its demands had been met. The grain deal is a “one-sided game,” he said in a television interview. “We can suspend our participation in this deal. And if everyone reiterates that all promises given to us will be fulfilled, let them fulfill these promises. And we will immediately join this deal. Again.” 

Western officials and agricultural analysts have pushed back, accusing him of deliberately stymieing the outflow of agricultural exports and driving up prices. Barbara Woodward, the U.K. envoy to the United Nations, said Russia was engaging in “cynical brinkmanship.” 

“In Istanbul, they slow-roll the inspections of the grain ships, bringing down the amount of grain that goes out. Then, by signaling that they are considering refusing to renew the deal, they are also affecting global grain prices,” she said. 

In this game of brinkmanship, diplomats have been scrambling to carve out other concessions to secure the extension of the deal. On Tuesday, U.N. Secretary-General António Guterres wrote Putin a letter offering to connect a Russian agricultural bank subsidiary to the SWIFT international payments system, in exchange for the continuation of the Black Sea Grain Initiative; the European Commission also indicated that it was willing to “explore all solutions.”

“The objective is to remove hurdles affecting financial transactions through the Russian Agricultural Bank, a major concern expressed by the Russian Federation, and simultaneously allow for the continued flow of Ukrainian grain through the Black Sea,” U.N. spokesperson Stéphane Dujarric said.

Russia has yet to respond to the letter, although Erdogan, a strong proponent of the grain deal, expressed optimism on Friday that Guterres’s effort would help secure the grain deal’s extension. Both Putin and Erdogan are “of the same mind” in extending the agreement, the Turkish leader added.

Known as the breadbasket of Europe, Ukraine once supplied 10 percent of the world’s wheat exports, 20 percent of corn exports, and 40 percent of the global sunflower oil supply. After Russia’s invasion in February 2022 throttled harvests and disrupted those exports—thereby skyrocketing global prices—diplomats rushed to ink an agreement to avert an international food crisis. Since its inception roughly a year ago, the U.N.- and Turkey-brokered initiative has unlocked more than 30 million metric tons of goods, nearly one-quarter of which have gone to China. Almost half have reached developing markets that had been under immense strain.

Failing to renew the deal would jeopardize those exports—which would be bad for Russia’s ongoing efforts to woo the global south and especially its need to stay in good graces with Beijing. China has been one of the major beneficiaries of the grain deal, even naming the initiative in its 12-point peace plan, and has a vested interest in the agreement’s success. The timing of the latest extension fight also matters: The overwhelming bulk of Ukraine’s wheat crop is harvested in July and August, making this extension even more critical than previous standoffs.

But even without suspending its involvement in the Black Sea Grain Initiative, Moscow has done what it can to pressure Kyiv, including by shortening the lengths of extensions and exacerbating shipping challenges. As long as Russia works to squeeze Ukraine’s agricultural sector, Glauber said, already hard-hit producers will be the ones who are hurt the most. 

“The real problem with all these increased costs and reduced exports out of the Black Sea [is that] the direct cost of that is being felt by Ukraine producers,” he said. “And that’s sort of the bottom line.”