Snake Island, an island captured by Russia on the first day of its invasion of Ukraine, was abandoned by Russian forces on June 30th. Ukraine’s southern operational command claimed to have caused “significant losses” on Snake Island from its strikes, while the Russian Defense Ministry stated that the withdrawal was “a gesture of goodwill,” an excuse used after previous withdrawals from the area surrounding Kyiv. A rocky and uninhabited island, Snake Island’s strategic significance arises from its proximity to the shipping lanes used to export grain from the Ukrainian province Odessa.
Ukraine’s ability to export grain has a significant impact on global food security. According to the International Food Policy Research Institute, Russia and Ukraine collectively supply one-third of the world’s wheat, a quarter of its barley, and three quarters of its sunflower oil. Ukraine exports 95% of its grain through Black Sea ports, many of which are currently under Russian control. Ukraine has been negotiating with neighboring countries such as Poland, Hungary, and Romania to improve railway links while also shipping the grain by road; these methods, however, can only ship out 1.5-2 million tonnes of grain per month compared to the 5-6 million tonnes normally shipped through the ports.
Arif Husain, the chief economist at the UN World Food Programme, outlined the impacts the war has had on food security: “The numbers do not lie. Pre-Covid we were looking at about 135 million people in crisis or the worst type of food security situation. Today, including Ukraine’s impact, that number is 345 million.”
U.S. Secretary of State Anthony Blinken accused Russia of “blackmailing” the world by preventing grain shipments from Ukrainian ports with blockades and mines in an attempt to influence western nations to lower sanctions. Russian President Vladimir Putin blamed western countries for interfering the distribution of grains and fertilizers through sanctions, despite U.S. officials meeting with foreign governments to ensure them that grain and fertilizer exports will not face sanctions, and claimed that Ukraine could clear the mines preventing ships from reaching the ports. Using GPS tracking, the BBC followed stolen trucks transporting grain from occupied Ukrainian territory to Crimea and then to Russia.
Putin’s distortions ignore the fact that his decision to invade Ukraine and occupy most of its southern territory, blockade Black Sea ports, and steal Ukrainian grain is the cause of this crisis. All issues with the distribution of Ukrainian and Russian grains and fertilizers stem from this cause and, thus, his regime deserves the blame for any starvation that occurs from a lack of exports.
The liberation of Snake Island displays the most immediate method through which grain exports can be freed: defeating Russian forces at sea and retaking Black Sea ports. Western governments can assist with this through their continued support of the Ukrainian military with arms sales. These sales played a role at Snake Island; pro-Russian bloggers and war reporters attributed the Russian defeat to the French artillery system known as CAESAR that fired tactical missiles from Odessa and British intelligence claimed that donated anti-ship Harpoon missiles destroyed the naval tugboat Spasatel Vasily Bekh.
Despite western assistance, there is no guarantee that Ukrainian military conquest of Russian positions along the Black Sea will be timely enough to solve existing food insecurity. This means that solutions to the issue of food insecurity must be found outside of the conflict. Global food assistance programs that transfer foodstuffs to starving populations and subsidize agricultural production can mitigate troubles in the short term, but the artificially lower prices caused by these programs disincentivize agricultural development in the long term and lead to inefficient capital allocation. When the subsidies given to the farmers end, the farmers find themselves unable to operate profitably because of a lack of revenue brought about by the artificially low prices.
Long term solutions are the only solutions when it comes to food insecurity. As Cary Fowler, the U.S. special envoy for global food security, explained, “[the crisis] that we’re experiencing now is not one that is going to go away in the next few weeks [or] months.” Furthermore, wars of aggression are unpredictable and have disruptive effects on global supply chains. This means that any solution has to include a broad array of countries so that no single war can leave the world starved of a single product.
Solutions proposed to the problem of food insecurity range from the mundane to the radical; price controls on foodstuffs so that they can be more easily purchased and rethinking the quantity of food consumed by citizens of western countries are just two proposals to help limit starvation. Both these solutions promote the Malthusian idea that agricultural production is a concrete that requires redistribution to ensure that starvation does not occur while ignoring the most important factor that determines whether enough food exists: production.
The only solution to providing sustainable agricultural products in the long term is to create the conditions in which foodstuffs can be produced profitably. This must be done by establishing private property rights and decreasing regulation and tariffs on production.
Private property is one of the most important rights for producing food since without a farmer’s right to his/her production, no guarantee exists that they will be compensated justly. Despite this reality, only 30% of the global population has legally registered rights to their land according to the World Bank. Arbitrary limitations on the amount of land farmers can acquire and produce on diminishes their ability to produce efficiently. Agriculture and Resource Economist E.C. Pasour Jr. discussed this issue in the context of India in the 1970s. At that time, Prime Minister Indira Gandhi’s government reduced the amount of irrigated land that could be held from 30 to 18 acres; grains were also nationalized, forcing farmers to sell their crops at a price below the market level. Besides the disincentivizing effects brought about by limiting the amount of land that could be purchased and the profit made by grain, the profitability of tractor production was also reduced because farmers no longer had large enough land holdings to support their purchase.
The economic logic in this case is clear: farmers were prohibited from producing to a certain level because they could not expand their farms do to land limits or make a profit due to price controls, therefore, agricultural production stagnated. With property rights, incentive exists to farm efficiently and expand production because there is no limit to the profit that a farmer can acquire. Farmers that fail to cultivate their land efficiently will be unable to compete with those that do; however, they are still able to gain value from their property by selling it to the more efficient producer. Establishing property rights throughout the world will create the incentives for farmers to produce food that is demanded, creating the conditions for food security.
Regulations and tariffs make it more difficult and costly for producers to produce certain goods, disincentivizing them from entering the market. This leads to an artificial scarcity of producers, making their products more costly to consumers. These regulations are often placed with self-acclaimed humanistic goals in mind, such as reducing carbon emissions or protecting local producers. This is especially true for agriculture due to its high environmental impact and the tradition of small-family farms, which is reflected by that fact that tariffs on agricultural products are higher than non-agricultural products in 90% of countries according to the USDA. While these policies diminish the environmental impact of agriculture and protect smaller producers, they also make production less efficient and, therefore, reduce the amount of food available while inflating the price. Spanish Economist Daniel Lacalle discussed the effects of regulations on agriculture products in contemporary Europe: “In Europe, farmers have seen rising minimum wages and increasing direct and indirect taxes, on top of soaring energy costs driven by the multiplying cost of CO2 emissions even before oil and natural gas rose due to the war.” The effect of regulations can also be seen in South America, where farmers would be able to produce grain on more acreage if not for regulations against deforestation. In times of crisis, the effects of regulation are made clear: starvation is considered an issue of lesser importance compared to the promotion of nativism or environmentalism.
The liberation of Snake Island will provide new routes for grain to be shipped, which should help reduce the level of food insecurity. This does not change the fact, however, that grain production is presently largely dictated by Russian aggression. Creating the conditions for efficient grain production globally will reduce the world’s reliance on Russian and Ukrainian exports and pave the way for a more sustainable food distribution network. Liberalization through private property and lowering regulations is central to achieve this goal by establishing more efficient production.
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