New York, New York
Transcript
MAHMOUD MOURAD (via translation): With us from New York is Ms. Isobel Coleman, Deputy Administrator for U.S. Agency for International Development. Welcome Ms. Coleman. Do you think Russia's decision to end its participation in the Grain Deal brings back the specter of the global food security crisis and the sharp increase in prices that was present before the agreement was signed a year ago?
DEPUTY ADMINISTRATOR ISOBEL COLEMAN: We've seen markets react in a pretty steady way so far on news of Russia pulling out of the deal yesterday. You saw markets go up a little bit, food prices increase, but then go back to previous level. So I don't think the crisis is today. I worry, though, that the crisis is coming. What Russia is doing is intentionally destroying the agricultural capacity of one of the world's most critical bread baskets. And the repercussions of that are going to be felt for months and years to come. So I think the world should be worried about food security. And you've seen countries in Africa, for example, Kenya, the Kenyan government come out and say that this action by the part of Putin on pulling out of the Black Sea Grain Initiative is a stab in the back of global food security. And I think that really does sum it up, it is going to have very, very negative repercussions over the longer term, for the world's most vulnerable. It'll raise food prices, eventually, and the ones who will suffer the most are the ones who are most vulnerable in terms of food security in the world.
MS. MOURAD (via translation): Is it true that tough times are awaiting countries in the Middle East region like Egypt, Jordan, Lebanon, Yemen, and Sudan due to Russia withdrawing from the deal?
DEPUTY ADMINISTRATOR COLEMAN: I think it is, unfortunately, very likely that difficult times are in the future. We have seen other countries right now have record crops, which are keeping food prices steady. They are down about 25 percent from its high of a year ago. But the world is very much on a knife's edge with respect to food security. We've seen global warming create droughts. All we need is a couple of the big exporting countries to experience a drought or some other natural disaster that will, I think, make our food supplies again very insecure. And as I said, with Ukraine, being one of the biggest bread baskets and biggest exporter of grains in the world. This deliberate and persistent destruction of Ukraine's agricultural capacity by Russia is going to have long term consequences.
MS. MOURAD (via translation): This agreement was supposed to have benefits for all parties but Russia's complaints are that the part pertaining to its fertilizer exports and agricultural equipment and their replacement parts was not realized. Why didn't the West take this into consideration and lift the sanctions on Russia in light of the world food crisis and allow for the Russian agricultural bank to use SWIFT for financial transactions?
DEPUTY ADMINISTRATOR COLEMAN: I'm sorry to say but Putin's characterization of what has happened with respect to Russia in the Black Sea Grain Initiative is lies and more lies. Russia has had record exports of grains last year and is on track for another record year this year. Food and fertilizer is not sanctioned. They have been able to export their fertilizer and their wheat, and other grains. As I said it's been a record export for them last year and this year. This is a deliberate attempt by them to destroy Ukraine's agricultural capacity, they are picking up that market share, they have increased their market share around the world. So their characterization – Putin's characterization – of this deal is just blatantly untrue.
MS. MOURAD (via translation): What are the available alternatives if Russia does not reconsider its decision? Is there a way to continue loading grain from Ukrainian ports in light of the increase in the cost of insuring vessels, which were already high to begin with?
DEPUTY ADMINISTRATOR COLEMAN: It's very difficult for Ukraine to replace exporting from the Black Sea because the ships are the most efficient and cost effective way to move bulk exports such as grains. We and the Europeans are working furiously with the Ukrainians to help them develop alternative export routes through overland routes through Poland, using the Danube through Romania, but of course, this is a big blow for world food security to be taking that much of the export of grains off the market, with the ending of this deal. I hope that there is talk about Russia coming back into the deal and I hope that can be worked out.
MS. MOURAD (via translation): You mentioned two different routes which could be used to export grain, via Poland and Romania, but local farmers in these countries oppose the entry of Ukrainian grains or food products because this affects prices in their countries and their profits. Why aren't grants given to these farmers to appease them and allow for Ukrainian grain shipments to proceed safely to countries in need?
DEPUTY ADMINISTRATOR COLEMAN: Well there has been some resistance, as you note, because some of the grains that have been transiting these countries has been staying in those countries and depressing prices. But now there are greater efforts to make that grain just transits through them and is shipped overseas and so we hope that this will alleviate some of those problems.
MS. MOURAD (via translation): What is the likelihood of overcoming the logistical hurdles to connect Ukrainian railways with other European countries and change the size of the tracks? I know that they differ slightly between countries. Is it possible to overcome this by installing an alternate railway to be used for the export of these large quantities of Ukrainian food products to the rest of the countries of the world?
DEPUTY ADMINISTRATOR COLEMAN: So USAID, as part of our U.S. government effort, has been working for over a year on making the transport of Ukrainian grains easier by the overland routes and through the Danube path. And so we've been working on addressing some of these rail gauge issues that you've identified, they are different gauges and that has to be addressed. But also increasing the capacity of the customs, of the phytosanitary inspections, of the on loaders and off loaders of grain, creating more capacity to do 24/7, seven days a week shipments through the Danube.
So increasing the capacity all around, and that has had positive results and we've seen the ability to ship through these alternative routes go way way up. It's up by 4,000 percent, from a low level to a higher level in some cases. But as I said it adds cost and time to do that and the Black Sea routes are really preferable for all of those reasons – it's much more cost effective to be able to do bulk exporting on bulk carriers through the Black Sea route. But we are looking at all alternatives working with the Europeans and making sure that Ukraine has every opportunity to be able to get its life-saving wheat and oils out to the rest of the world – vegetable oils, and all of the grains that it exports.
MS. MOURAD (via translation): Isobel Coleman, Deputy Administrator of the U.S. Agency for International Development, was with us from New York. Many thanks to you.
DEPUTY ADMINISTRATOR COLEMAN: Thank you.