Typical agricultural landscape of Ukraine, Kherson Oblast. Credit: Dobrych (Flickr)/CC-BY-SA-2.0, via Wikimedia Commons

By Frederic Mousseau
OAKLAND, United States, Aug 12 2014 (IPS)

Mostly unreported as the Ukraine conflict captures headlines, international financing has played a significant role in the current conflict in Ukraine.

In late 2013, conflict between pro-European Union (EU) and pro-Russian Ukrainians escalated to violent levels, leading to the departure of President Viktor Yanukovych in February 2014 and prompting the greatest East-West confrontation since the Cold War.

Frédéric Mousseau

A major factor in the crisis that led to deadly protests and eventually Yanukovych’s removal from office was his rejection of an EU association agreement that would have further opened trade and integrated Ukraine with the European Union. The agreement was tied to a 17 billion dollars loan from the International Monetary Fund (IMF). Instead, Yanukovych chose a Russian aid package worth 15 billion dollars plus a 33 percent discount on Russian natural gas.

The relationship with international financial institutions changed swiftly under the pro-EU government put in place at the end of February 2014 which went for the multi-million dollar IMF package in May 2014.

Announcing a 3.5 billion dollars aid programme on May 22, World Bank president Jim Yong Kim lauded the Ukrainian authorities for developing a comprehensive programme of reforms, and their commitment to carry it out with support from the World Bank Group. He failed to mention the neo-liberal conditions imposed by the Bank to lend money, including that the government limit its own power by removing restrictions that hinder competition and limiting the role of state control in economic activities. “The stakes around Ukraine's vast agricultural sector, the world’s third largest exporter of corn and fifth largest exporter of wheat, constitute a critical factor that has been overlooked. With ample fields of fertile black soil that allow for high production volumes of grains, Ukraine is the breadbasket of Europe”

The rush to provide new aid packages to the country with the new government aligned with the neo-liberal agenda was a reward from both institutions.

The East-West competition over Ukraine, however, is about the control of natural resources, including uranium and other minerals, as well as geopolitical issues such as Ukraine’s membership in the North Atlantic Treaty Organization (NATO).

The stakes around Ukraine’s vast agricultural sector, the world’s third largest exporter of corn and fifth largest exporter of wheat, constitute a critical factor that has been overlooked. With ample fields of fertile black soil that allow for high production volumes of grains, Ukraine is the breadbasket of Europe.

In the last decade, the agricultural sector has been characterised by a growing concentration of production within very large agricultural holdings that use large-scale intensive farming systems. Not surprisingly, the presence of foreign corporations in the agricultural sector and the size of agro-holdings are both growing quickly, with more than 1.6 million hectares signed over to foreign companies for agricultural purposes in recent years.

Now the goal is to set policies that will benefit Western corporations. Whereas Ukraine does not allow the use of genetically modified organisms (GMOs) in agriculture, Article 404 of the EU agreement, which relates to agriculture, includes a clause that has generally gone unnoticed: both parties will cooperate to extend the use of biotechnologies.

Given the struggle for resources in Ukraine and the influx of foreign investors in the agriculture sector, an important question is whether the results of the programme will benefit Ukraine and its farmers by securing their property rights or pave the way for corporations to more easily access property and land.

By encouraging reforms such as the deregulation of seed and fertiliser markets, the country’s agricultural sector is being forced open to foreign corporations such as Dupont and Monsanto.

The Bank’s activities and its loan and reform programmes in Ukraine seem to be working toward the expansion of large industrial holdings in Ukrainian agriculture owned by foreign entities.

Amid the current turmoil, the World Bank and the IMF are now pushing for more reforms to improve the business climate and increase private investment. In March 2014, the former prime minister ad interim, Arsenij Yatsenyuk, welcomed strict and painful structural reforms as part of the 17 billion dollars IMF loan package, dismissing the need to negotiate any terms.

The IMF austerity reforms will affect monetary and exchange rate policies, the financial sector, fiscal policies, the energy sector, governance, and the business climate.

The loan is also a precondition for the release of further financial support from the European Union and the United States. If fully adopted, the reforms may lead to significant price increases of essential consumer goods, a 47 to 66 percent increase in personal income tax rates, and a 50 percent increase in gas bills. These measures, it is feared, will have a devastating social impact, resulting in a collapse of the standard of living and dramatic increases in poverty.

Although Ukraine started implementing pro-business reforms under president Yanukovych through the Ukraine Investment Climate Advisory Services Project and by streamlining trade and property transfer procedures, his ambition to mould the country to the World Bank and IMFs standards was not reflected in other realms of policy and his allegiance to Russia eventually led to his removal from office.

Following the installation of a pro-West government, there has been an acceleration of structural adjustment led by the international institutions along with an increase in foreign investment, aimed at further expansion of large-scale acquisitions of agricultural land by foreign companies and further corporatisation of agriculture in the country.

The experience of structural adjustment programmes around the developing world foretells that it will increase foreign control of the Ukrainian economy as well as increase poverty and inequality. As Western powers get ready to impose sanctions on Russia for its transgressions in Ukraine, it remains unclear how programmes and conditionalities imposed by the World Bank will improve the lives of Ukrainians and build a sustainable economic future.

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Still edible food thrown away together with plastic bottles and empty crates at local food market in Lucca, Italy. Credit: Silvia Giannelli/IPS

By Silvia Giannelli
LUCCA, Italy, Jul 29 2014 (IPS)

“Only two years ago, the soup kitchen was serving 50 meals a day. Today the number has almost doubled and, what is even more worrying, we have started receiving families with children,” says Donatella Turri, director of the Caritas Diocese of Lucca.

The paradox is that the lengthening queues at the Lucca soup kitchen come against a backdrop of increasing food loss and waste.

Turri has no doubts concerning the impact of the current economic crisis on Italian families in terms of food security – “we call it ‘poverty of the third week’.”If our goal is to feed the planet, we cannot simply increase production and keep losing and wasting one-third of it. Our first commandment needs to be 'thou shall not waste' – Andrea Segré, President of Last Minute Market

“It means that the poor are no longer the homeless, the mentally ill and the drug addicts. More and more often we get requests for primary goods from families that simply cannot reach the end of the month with their salaries,” she told IPS.

Turri’s claims are confirmed at the national level by the yearly Italian National Institute of Statistics (ISTAT) report on poverty. According to the survey, absolute poverty [the threshold below which a family cannot afford the goods and services that are essential to guarantee a barely acceptable standard of living] has maintained its steady increase in recent years, rising from 4.6 percent in 2010 to 7.9 percent in 2013.

“The traditional distinction between the quantitative aspect of food security being typical of developing countries, and the qualitative one being a concern of the industrialised world, is fading away,” Andrea Segré, Dean of the Faculty of Agriculture at Bologna University and President of Last Minute Market, a company that recovers unsold or non-marketable goods in favour of charity organisations, told IPS.

However, while access to food is also becoming increasingly difficult for the low-income class of developed countries, the Food and Agriculture Organization (FAO) reports that Europe, North America and Oceania are top of the world’s food wasting classification, with a per capita food loss of almost 300 kg per year in North America.

“Food loss and waste are dependent on specific conditions and local circumstances,” Eliana Haberkon from FAO’s Office for Communications, Partnerships and Advocacy, explained to IPS.

“In low-income countries, food loss is mainly connected to managerial and technical limitations in harvesting techniques, storage, transportation, processing, cooling facilities, infrastructure, packaging, etc. … and food waste is expected to constitute a growing problem due to undergoing food system changes and due to factors such as expansion of supermarket chains and changes in diets and lifestyle.”

Currently, the biggest gap between rich and poor nations remains the quantity of food wasted at the consumer level. According to FAO figures, Europeans and North-Americans waste between 95 to 115 kg of food per capita every year, while in sub-Saharan Africa and South/Southeast Asia the number drops down to only 6 to 11 kg a year.

At the beginning of July, Last Minute Market, in cooperation with the SWG survey company, published a report called ‘Waste Watcher’. Using a complex questionnaire survey among Italian consumers, the outcomes paint a comprehensive picture of the social dynamics and behaviour of families that lead to food waste.

“The overall waste of food in Italy is worth 8.1 billion euro every year, and most of it comes from our houses. The rest of the losses, in agriculture, industries, distribution and service, can be recovered, but it is much less significant than what we throw in our bins,” said Segrè, commenting on the survey results.

Last Minute Market is now working to prepare the ground for a discussion on food waste during EXPO 2015, which will take place in under the heading ‘Feeding the planet, energy for life’.

“In order to be credible, EXPO needs to take into account the issue of food waste,” said Segré. “If our goal is to feed the planet, we cannot simply increase production and keep losing and wasting one-third of it. Our first commandment needs to be thou shall not waste.”

Indeed, as Haberon explained, the consequences of food loss and waste stretch far beyond their monetary value, “affecting current use and future availability and causing unnecessary pressure on natural resources.”

Studies by FAO estimated a yearly global quantitative food loss and waste of 30 percent of cereals, 40-50 percent of food crops (fruits and vegetables), 25 percent of oil seeds, meat and dairy products and 30 percent of fish.

Both Last Minute Market and Caritas agree on the paramount role of education in tackling food waste. In cooperation with more than ten local primary schools, the Caritas Diocese of Lucca has managed to recover excess food intact from school canteens for a value of 40,000 euro, taking it to the soup kitchens it manages.

This initiative has allowed it to develop a parallel food education project with the children of the schools involved.

“We obviously need normative support to help us reduce food waste, but first of all we must re-introduce food education, starting from primary schools,” said Segrè. “The current generation has completely lost the value of food and we must get it back.”