Yves here. Michael Hudson explains how the US sought to promote dependency in grains as a way of preserving its economic dominance. While most of us know wars are often fought over resources, we don’t often think in the modern era of control of supplies of agricultural goods accomplishing similar ends.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is The Destiny of Civilization.
A new monthly column for German newspaper Berliner Wochenende.
Ever since World War II, U.S. trade strategists have based their international policy on control of two key commodities: oil and grain. Economically, they have been the mainstay of the U.S. balance of payments, the leading categories of export surplus (along with weapons), especially as the U.S. economy has deindustrialized.
And politically, these are basic needs of every economy. U.S. diplomacy has sought to make other countries dependent on American grain. In the 1950s, most notably, U.S. opposition to Mao’s Communist revolution in China sought to impose a grain embargo on that country. But Canada broke the sanctions – creating good will for decades.
U.S. trade strategists have sought to promote grain dependency on U.S. farmers by opposing foreign attempts to achieve grain self-sufficiency. Most notoriously, the World Bank from the outset refused to make any agricultural loans to Global South/Third World countries for the production of food grains. Lending has been limited to promoting tropical crops that do not compete with U.S. farm production. The result is that countries like Chile, with the world’s largest supply of natural guano fertilizer, have squandered their export earnings from copper on buying U.S. grain that they could easily have produced themselves.
As soon as the seven-member Common Market/EEC was created in 1958, its Common Agricultural Policy became the main area of diplomatic conflict between the EEC and the United States. That was one reason why U.S. diplomats promoted the European Free Trade Area (EFTA) as a rival. They had grandfathered America’s heavy agricultural protectionism into trade agreements. President Roosevelt’s Agricultural Adjustment Act, price supports (“parity pricing”), agricultural extension services and other government support made sustained farm productivity gains exceed those of any other country.
So it was no wonder that Europe’s CAP sought to achieve similar gains for its farm sector, and consequent contributions to the trade balance of France, Germany and other member countries. For the EEC, the CAP was the major and most successful economic achievement of the 1960s and 1970s. Europe became a major grain exporter. There was nothing that U.S. diplomacy could do to preserve its former market dominance in this area.
This success made agriculture a key element of French and German diplomacy with the EEC expanded into today’s European Community. Obviously, these two leading farm producers have sought to maintain their own dominant position.
It is only natural that new EU member countries would like subsidies for their own agriculture to achieve similar farm productivity gains and similar supports. This has been an ongoing political fight within the EU. And it has come to a head with the war in Ukraine, seeking access to the European market. Its soils are famously the richest and most productive in the world, making it a natural global exporter of grain, sunflower seeds and other farm products.
But once again, U.S. diplomatic interests are antithetical to those of the EU. American companies have bought up broad swaths of Ukrainian farmland, and seek access to European markets, starting with Poland. Its president Andrej Duda explained the problem in an interview with Lithuanian National Radio and Television:
I would like to draw particular attention to industrial agriculture, which is not really run by Ukrainians, it is run by big companies from Western Europe, from the USA. If we look today at the owners of most of the land, they are not Ukrainian companies. This is a paradoxical situation, and no wonder that farmers are defending themselves, because they have invested in their farms in Poland […] and cheap agricultural produce coming from Ukraine is dramatically destructive to them.
The threat to Poland and other European farm producers of low-priced Ukrainian grain has been intensified by two major developments. Ukrainian access to the Black Sea being blocked, leaving rail transport westward as its major alternative to sell its grain. And the U.S. company BlackRock has worked with Ukrainian President Zelensky to organize U.S. and European investment in Ukrainian industrial-scale agriculture to help provide foreign exchange for the country in its NATO-backed war against Russia.
National Ukrainian lobbying interests have joined U.S. diplomatic pressure for tariff-free access to the EU grain market. Polish farmers recently have sought to block Ukrainian grain imports from lowering the prices at which they can sell their own grain. Without price supports for this and other EU farmers, the threat of U.S.-backed Ukrainian farm competition is a major deterrent to Ukrainian membership in the EU.
As such, it revives the U.S.-European conflict of agricultural interests that has been waged for over half a century. Extension of the EU economic supports for Ukrainian farm competition would be, in the sphere of agricultural trade, the equivalent of destruction of the Nord Stream gas pipeline in impairing European prosperity.
U.S. agricultural interests in opposing the EEC’s CAP after 1958 now pit U.S. investment interests against today’s EU farm producers.
A fascinating analysis. So reading this, the US is using the war in Ukraine to cripple the EU as a competitor. As US trade strategists have sought to control oil and grain, you can see it in play here. First they blew the NS2 pipelines so that EU access to cheap, plentiful energy was gone and the EU dependent on buying US gas at 3-4 times the price that it is in the US. And now they want to have the EU let in cheap grains from the Ukraine to cripple grain farming in the EU, even though, and I cannot emphasize this enough, the Ukraine is not a member of the EU as in at all. They have already gotten the EU to virtually ban Russian & Belarus grains so the conditions are being set up for the EU to be reliant on the US/Ukraine for grain who will send GM grain that has been treated with dodgy chemicals. I think that the farmers of the EU are going to be in for the fight of their lives and if they do not fight this, should just sell up and let their farms be turned into solar farms, country estates, estate housing, gated communities or some such. Come to think of it, it may be that it will be only the right that will give support for farmers for this fight so this will play into the political future of the EU.
“A fascinating analysis. So reading this, the US is using the war in Ukraine to cripple the EU as a competitor.”
China however has made profound gains in rice productivity and is sharing those gains, and can share those gains with EU countries as well. Rice is the main grain for half the world’s population, wheat for a third. Similarly, China has made profound gains in green energy productivity and the EU should be sharing in those gains.
China is still dependent on external exports of grain, especially animal feed. And I don’t think China is a position to share in actual grain consider its domestic needs. Unlike Russia, it has not achieved full self sufficiency for food production.
The technology and agriculture science is another story and could be shared with other countries. But the EU seems to be losing whatever agency they had left. They will likely become dependent on the US for their basic needs as well.
https://english.news.cn/20240618/8f46a0bb576a49c5b1376dcfef4dfae9/c.html
June 18, 2024
African agriculture thrives with Chinese technology, market access
* In recent years, agricultural cooperation between China and Africa has flourished under the frameworks of the Forum on China-Africa Cooperation and the Belt and Road Initiative.
* From local fields to global e-commerce platforms, China’s efforts have significantly boosted African agricultural productivity and modernization through technical assistance, industry chain development, and market access.
* Platforms such as the China International Import Expo, the China-Africa Economic and Trade Expo, and the African Goods Online Shopping Festival have become crucial showcases for African agricultural products, enhancing their international visibility.
NAIROBI — At the Nigerian Agricultural Technology Demonstration Center near Abuja, the capital of the West African country, Chinese agricultural experts have a daily routine of examining newly harvested rice.
As a result of years of dedicated work, experts from the Chinese company Green Agriculture West Africa Ltd. (GAWAL) have developed a high-yield rice seed tailored to local conditions, which outperforms native varieties by over 20 percent. This seed, endorsed by Nigerian agricultural authorities, is now planted across two-thirds of the country’s states.
Lawal Musa, a farmer from Jigawa State, has been growing this rice for several years. “Rice is vital in Nigeria and every family consumes it. With China’s cooperation, Nigeria is on the path to achieving food self-sufficiency,” he said, praising the rice for its high productivity and ability to withstand diseases and drought…
I currently have lost the source and only have a .csv file with some bare figures but if you look at Ukrainian grain exports from Black Sea ports under that Turkish-brokered deal the second largest customer for Ukrainian grain was Spain. China was the largest. Turkey was third with a little over half of Spain’s imports. Then came Italy & the Netherlands.
These five countries accounted for 62% of all Ukrainian grain exports. Another five countries of the 18 countries in total were EU countries.
Reading on the EU’s treatment of its farmers during the past few months is insanity. Even more than energy prices, adequate amounts food available to the general population is the most important need to maintain a state. No food, no state. Putting their trust in a kleptocracy selling questionable grain after destroying their own agriculture… I know that the American and European leadership have political and financial goals for destroying their farms, but I don’t think that the survival of Europe is among them.
There will be enough GMO grain, and artificial meat, and bugs, for everyone.
These days, I pay extra-close attention to any ingredient lists and food sources. Corn has been suspect for ages due to all the HFCS everywhere and wheat is moving up, or is it down, in the league tables. Non-GMO, organic food labels used to be novelties.
Plant a garden, or help other plant and grow. And…. save your seed while you can.
The American Leadership ( and to a hopefully lesser extent the EUropean Leadership) are part of the International Free Trade Conspiracy. The independent farmers of Poland are rebelling against the Conspiracy’s tactics using Ukrainian grain to exterminate the Polish farming sector. The International Free Trade Conspirators used the same tactics decades ago to exterminate 5/6ths of the independent farming sector in America itself. This has been written about in books like Unforgiven by Charles Walters, Night Came to the Farms of the Great Plains by Raymond D. North, and no doubt others. I am cheered to see that this comment recognizes the difference between American Leadership and its occupied victim which is America itself.
https://bookstore.acresusa.com/products/unforgiven
https://bookstore.acresusa.com/products/night-came-to-the-farms-of-the-great-plains
I wonder how much of that famously fertile land will belong to rump Ukraine, once the Russians have settled matters on the battlefield. The Swiss “peace conference” will be to naught, Zelensky’s US handlers will refuse Putin’s offer, and the rump will get shaved thinner and thinner. Somehow reminds me of Cunégonde in Voltaire’s Candide …
If Russia ends up owning the chernozem soil provinces of Ukraine, and if Russia extends its ban on GMO crops to its conquered Ukrainian chernozem soil provinces, that is a net positive for ecology, agriculture, human health, etc.
Of course, if the EU and all its countries were to abolish and cancel all their Forcey-FreeTrade Agreements and treaties with every country not a part of the EU, the EU would then be politically sovereignty-reconquest self-freed to abolish GMO within the EU itself and abolish glyphosate too, if they like. That way, the conquest of East Ukraine by the RussFed could be considered purely on its political merits or demerits. But the way things stand now, a RussFed conquest of East Ukraine would deny East Ukraine to the merchants of GMO and glyphosate, which would be a good thing.
Per the attached map, the Chernozem belt actually extends right across Russia. Ukraine is kind of at the southeastern end of it.
http://www.rusnature.info/geo/04_5.htm
Capitalist unchecked power over the past 50 years has entered late stage exploitation of nature’s seed and genes. Ukraine and Russia are among the last remaining nutrient-dense farmlands on the planet. Russia still leads in exporting organic produce, an untapped market for salivating GMO patent profiteers. EU nations should join Poland in rejecting these corrupted seeds as the parasite seeks new hosts, leaving the dilapidated, impoverished US behind.
The thought occurs that it may be difficult for Western owners of land in Ukraine to repatriate, or even generate, profits from that land after it falls under RF control.
Asset seizure can cut in multiple directions.
An enlarged RF, a major grain supplier and hydrocarbon producer, in economic cooperation with Saudi Arabia and Iran, major hydrocarbon producers …
Well, US will still at least control the dollar.
Thank you, Yves.
This report, https://www.francetvinfo.fr/politique/front-national/elections-europeennes-au-sud-de-toulouse-une-petite-commune-a-vote-massivement-pour-le-rassemblement-national_6608088.html, from France 2 tv yesterday may be of interest. It’s about how rural France feels neglected by the government in far away Paris.
There were initially only six members of the EEC – France, Germany, Italy, Belgium, the Netherlands, and Luxembourg. The expansion in 1973 added the UK, Denmark, and Ireland.
A Darwinian Survival Guide:
p.127:
WEAPONIZING AGRICULTURE (A REASON TO FIGHT)
We believe the primary driver of organized warfare was concerns about food security. Urban dwellers became increasingly vulnerable to conflicts over food shortages because of crop failures due to climate change events or the overly rapid growth of the urban population – or both.
p.150:
[W]hen the feudal lords opted to use the commons to amplify production for their trade with the cities the very people they relied on to produce the food fled to those cities. Increased population density in the cities and reduced agricultural production in the rural areas created a food insecurity crisis; increasingly, food had to be imported.
“U.S. trade strategists have sought to promote grain dependency on U.S. farmers by opposing foreign attempts to achieve grain self-sufficiency. Most notoriously, the World Bank from the outset refused to make any agricultural loans to Global South/Third World countries for the production of food grains. Lending has been limited to promoting tropical crops that do not compete with U.S. farm production. The result is that countries like Chile, with the world’s largest supply of natural guano fertilizer, have squandered their export earnings from copper on buying U.S. grain that they could easily have produced themselves.”
An astonishing and superbly important passage.
“Lending has been limited to promoting tropical crops that do not compete with U.S. farm production.”
Lending for farm production in China is especially for competing with major US crops, from apples to corn to wheat. Bill Clinton actually apologized for crippling rice production in Haiti, where domestic rice competed with Arkansas rice:
http://www.democracynow.org/2010/4/1/clinton_rice
April 1, 2010
“We Made a Devil’s Bargain”: Former President Clinton Apologizes for Trade Policies that Destroyed Haitian Rice Farming
He only pretended to apologize. Destroying Haitian rice production was just what Clinton had in mind right from the start.
He was a master at pretending to apologise for things. He would bite his lower lip, look down, and adopt that ” so sincerely sad” tone of voice in his fake apology.
Clinton was 20th century America’s second most evil President. Woodrow Wilson was America’s first most evil President.
Fake apology. Meanwhile his wife and their foundation bought up Haiti’s gold mines took control of other resources as well.
“Meanwhile his wife and their foundation bought up Haiti’s gold mines took control of other resources as well.”
This assertion must be documented. With no documentation-referencing, I assume the assertion is entirely incorrect.
Hudson’s analysis goes a long way to explain the seemingly intractable environmental problems of Iowa and Illinois, the largest corn producers. Industrial Ag is at the heart of US foreign policy. It’s proxies make sure that corn (and soybeans) rules. Iowa has the least public park land of any state, and any effort to set aside more is met with resistance. Likewise, diversifying crops is resisted by corn and bean growers.
Polluted water, erosion, habitat loss are major issues. About half of Iowa’s corn feeds livestock; several times more hogs than people in Iowa. About half goes to ethanol production. Exports are included in both.
Iowa is after CA the 2nd largest US ag exporter.
Mexico is a good example of a country that can produce enough corn for its human and animal feeding needs. The trade treaty among the US, Canada, and Mexico–used to be NAFTA–has Mexico importing it from the US; GMO stuff, mostly to feed animals. Mexico’s where corn got its start and Mexicans want to protect their heritage and seed stock. Their decision to stop importing US GMO corn created a furor in the US–and in Iowa. Iowa is the US’s Ukraine for corn production.
“Industrial Ag is at the heart of US foreign policy.”
Nicely explained.
It is also at the heart of US domestic anti-farmer “farm” policy, a policy designed to de-populate the countryside, which it has done as intended.
[Industrial Ag] is also at the heart of US domestic anti-farmer “farm” policy…
Would “industrial ag” be the way I should understand anti-farmer “farm” policy? I had never thought in this way.
Thank you for the idea.
This maybe explain why USA is pushing Gene manipulated corn oversea, its brilliant strategy to control the market. USA killed millions of chinese with their grain sanction. So why did china go back to usa again to buy grain why not give Russia that market.
Really? When did millions of Chinese die from an American grain sanction? Are there any facts about this? Are there articles to link to?
Perhaps Yaiyen is referring to the Western sanctions imposed on China that were in force during the Great Leap Forward disaster.
While the western embargo certainly had an effect on the famine, the hubris and incompetence of Mao and CPC functionaries cannot be ignored as the main cause of the catastrophe. Souring relations with the Soviet Union in the late 1950s after the accession of Khrushchev also contributed to the development of the famine, as the USSR was an important trade partner.
This is big myth that millions of Chinese starved to death. Dikötter’s book is full of inaccuracies, misinterpretations and outright data manipulation. Even the cover uses an image from the 1940s famine.
https://democracyandclasstruggle.blogspot.com/2016/05/the-great-leap-forward-by-dongpin-han.html?m=1