Statement by Chargé d'Affaires of the Russian Federation Dmitry Polyanskiy at UNSC briefing on Black Sea Initiative
We thank you for inviting our proposed briefer to take part in this meeting and also for demonstrating a reasonable approach to the number of delegations speaking under Rule 37.
We closely followed all statements and once again marveled at the level of cynicism of Western delegations on the Council, their desire to conceal the truth and engage in wishful thinking.
Most of you expressed, in one way or another, disappointment at the termination of the so-called grain deal that provided for exports of Ukrainian grain to global markets. I have a question to you. What was it that you expected? From the very start, we have been drawing everyone’s attention to the fact that the initiative did not meet the initially proclaimed goal and was gaining a well-defined commercial nature. In fact, from the very beginning, developed countries have taken the lead among those buying food from Ukraine. However, no steps were taken to remedy this trend. During the Black Sea Initiative, a total of 32.8 million tonnes of cargo was exported, of which more than 70% (26.3 million tonnes) went to high- and upper-middle-income countries, including the European Union. The poorest states, notably Ethiopia, Yemen, Afghanistan, Sudan, and Somalia, accounted for less than 3%, a total of 922,092 tonnes.
Such geography and commercialization of an initially humanitarian initiative is easily explained by the fact that the owners of a significant part of Ukrainian arable land (more than 17 million hectares) are Western corporations Cargill, DuPont and Monsanto. They bought up Ukrainian land after Kiev lifted a 20-year moratorium on its sale at the request of the IMF and became the main beneficiaries of Ukrainian grain exports. On the other hand, the Europeans who buy Ukrainian food at dumping prices then process it at home and resell as ready-to-consume goods with high added value. In other words, they earn twice. What does this have to do with the task of getting food delivered to the poorest countries, about which we have heard again today?
If we really want to talk about global food security and saturating the world market with food, then we should focus on Russia, not Ukraine.
Let's compare the figures of grain production in Russia and Ukraine last year. Ukraine did about 55 million tonnes of grain, of which 47 million tonnes were exported. The share of wheat was only 17 million tonnes. In Russia, 156 million tonnes of grain were harvested, of which we exported 60 million tonnes, including 48 million tonnes of wheat. Let me make it clear. We did the exports not thanks to the “grain deal”, but rather in spite of the obstacles that it created for us.
Simple arithmetic clearly demonstrates that Russia holds 20% of the world wheat market, while Ukraine's share is less than 5%. So who plays a bigger role in global food security?
The picture becomes even more clear once we add Russia's fertilizers to this wheat. Experts do see this very good. That is why the Memorandum between Russia and the UN on the export of Russian agricultural products became an integral part of the "deal". None of its provisions has been fulfilled in this past year. Given Russia's historical place among the largest grain exporters in the world, it is obvious that when we agreed to the "package deal”, hearing the calls to join forces for the purpose of global food security, we expected an exemption to be made from the discriminatory approach to us on the part of Western countries, which imposed unprecedented sanctions against Russia, actually trying to organize a blockade of our manufacturers. This was important, and not for our sake, but for the sake of those in need across the globe, namely the poorest states. The fact that the US, UK and EU sanctions formally do not apply to food and fertilizers did not play any role. Our exports encountered strong barriers, which no one was going to lift or at least provide effective exemptions. Because of these barriers, Russia has lost a number of purchasing countries whose banking systems were unable to adapt to the new reality. But we have received new markets too, where the banking and logistical issues were resolved effectively. Our vendors did this all by themselves, with, unfortunately, no assistance from the UN.
In fact, the Russia-UN Memorandum of Understanding, which was called to assist us, never even started to work. The EU and US officially turned down one of our key requirements – to reconnect our agricultural bank, “Rosselkhozbank”, to SWIFT. One-off permits by Washington and Brussels cannot ensure uninterrupted trans-boundary payments or facilitate long-term planning of agricultural exports. Speaking of proposals to establish subsidiary firms of the bank, such ideas are unrealistic.
None of those who are crying that Russia allegedly "starves the whole world to death" has stirred a finger to facilitate the gratuitous – I stress, gratuitous – supply of Russian mineral fertilizers under the auspices of the United Nations. Since this purely humanitarian initiative was first announced in September 2022, out of 262 thousand tonnes of cargo that was blocked in Latvia, Estonia, Belgium and the Netherlands, only two shipments have been dispatched with great trouble, 20 thousand tonnes to Malawi and 34 thousand tonnes to Kenya. Our briefer Mikhail Khazin has elaborated on the crucial role that fertilizers play in terms of ensuring food security.
Spare parts and equipment for manufacturing agricultural products and fertilizers cannot be imported to Russia because of being listed as "dual-use" goods. The entire territory of our country has been declared a war risk zone, which drove up insurance rates to unaffordable levels and made them virtually prohibitive. Foreign ports have been closed to our ships and cargoes. Foreign bank accounts of Russian agricultural operators have been frozen. The part of funds that was unblocked simply moved into Western pockets as means to repay loans and cover the cost of delivering our fertilizers, which we provide free of charge.
Nevertheless, we waited patiently for our agreements with the UN to be fulfilled. Twice we agreed to extend the deal, despite all the nasty business around the Black Sea Initiative. We spent a whole year waiting for the results, and this year frankly was a loss-maker for our manufacturers and exporters of food and fertilizers. Due to a 30-40% drop in the cost of our grain on world markets, the losses of Russian agricultural operators amounted to $1.2 billion. Due to the situation with sea freight and the cost of international payments, the profitability of supplies has fallen by half. The prices for imported agricultural equipment and spare parts for our agricultural manufacturers have increased by 40%, the costs of financial transactions - by 10%. Our fertilizer producers, whose losses amount to about $1.6 billion, have just as many problems.
We have long been fed promises about the resumption of the Togliatti-Odessa ammonia pipeline. Kiev blocked its operation for almost a year, hoping to bargain for additional benefits under the "Black Sea Initiative" despite the fact that ammonia supplies were stipulated in the two Istanbul agreements and should have started simultaneously with the export of Ukrainian food. I should like to make it clear that ammonia exports had great economic benefits, including for Kiev to say nothing of humanitarian benefits for the whole world. Judge for yourself – every year this pipeline supplied about 2 million tonnes of raw materials to produce enough fertilizers to provide 45 million people with food. However, on June 5, the Kiev regime simply blew up this pipe. Now global ammonia exports have fallen by 70%. Why does no one, including the United Nations, condemn this crime and sound the alarm about the missed opportunities and the long-lasting consequences of Kiev’s irresponsible actions?
As if it was not enough, Zelensky’s regime used humanitarian corridors (contrary to all agreements) for launching attacks against Russian military and civil facilities. Neither the United Nations nor Western states gave an adequate assessments to these steps. Do you think we will put up with that?
In light of the above, our decision to terminate the Black Sea Initiative after July 17 and to close the maritime humanitarian corridor from 12.00 am Moscow time on July 20, 2023, should not have come as a surprise to anyone. Now we regard all vessels in the Black Sea heading to Ukrainian ports as potential carriers of military cargo. Accordingly, the countries of such vessels will be considered to be involved in the Ukrainian conflict on the side of the Kiev regime. In addition, a number of sea areas in the north-western and south-eastern parts of the international waters of the Black Sea have been declared temporarily dangerous for navigation. Corresponding information warnings on the withdrawal of safety guarantees to mariners have been issued in accordance with the established procedure.
Besides, we must state that over 12 months of the “grain deal", the Kiev regime has accumulated significant military, industrial, and fuel storage capacities around Ukrainian Black Sea ports, and deployed considerable human resources (AFU and foreign mercenaries) there. With the termination of the "deal" we have an opportunity to correct this situation. We consider the entire Black Sea port infrastructure of Ukraine as an area where AFU replenishes its capacities with Western weaponry, which Kiev uses against Russia. Since July 19, the armed forces of the Russian Federation have been launching group strikes with sea- and air-based precision weapons against military industry facilities, fuel infrastructure and ammunition depots of the AFU in the vicinity of Odessa, workshops and storage sites for unmanned boats near Odessa and Ilyichyovsk (Odessa region), as well as fuel infrastructure and ammunition depots near Nikolayev. All these targets are being hit effectively.
Against this backdrop, we have noted Secretary-General's yesterday’s reaction to our armed action. We have only one question to ask here. Where can we find a similar condemnation by the Secretary-General of the Kiev regime as it blew up the Togliatti-Odessa ammonia pipeline, the relevance of which for the global food security we already have addressed today?
This being said, we appreciate the efforts of the Secretary-General and his team who truly wanted the West to meet all relevant obligations, but failed to make this happen. Our former so-called partners in the West spared no effort to thwart the agreements and did everything they could to derail the "deal". In addition, both you and us remember very well how the United States, Great Britain and France blocked attempts to adopt any Security Council product mentioning the Russia-UN MoU in July and November last year. Now we all know why. They were never going to implement the UN-Russia Memorandum of Understanding. Same story as with the Minsk Package. They demanded unconditional implementation of the Istanbul Agreements only from us and to our detriment. Today they try cunningly to blame Russia for derailing this deal. And, for that matter, also for the misfortunes of the population of African and a some other countries. That is, the very countries from which the West itself squeezed all the juices and resources back in the day, pushing them into the abyss of wars, hunger and poverty; and which it continues to rob shamelessly even now, making use of the neo-colonial system. What’s more, some European countries, who are very vocal about the need to give Ukraine the opportunity to export agricultural products, prohibit imports of Ukrainian grain, prioritizing the interests of their domestic manufacturers. In doing so, they hit the rock bottom of cynicism and hypocrisy.
Let me stress that we are not against the “grain deal” as such, especially given its importance for the global food market and for many countries of the world. We are ready to consider returning to it, but only on one condition – if all the previously agreed principles of Russia's participation in this deal are fully taken on board and, most importantly, implemented without exception. Here is a brief reminder what that actually means.
Point one. Russian grain and fertilizers exports to global markets must be released from sanctions in practical terms rather than just in words.
Point two. All obstacles for Russian banks and financial institutions that service food and fertilizer exports must be removed, including their immediate re-connection to SWIFT. Promises and ideas of whatever kind in this regard will not do. These requirements must be met.
Point three. Supplies of spare parts and components for agricultural equipment and fertilizer industry to the Russian Federation must resume. The cost of imported spare parts and equipment for our manufacturers has increased by 40%, the cost of financial transactions – by approximately 10%. Total losses amounted to about $1.6 billion.
Point four. All issues related to vessel freight and insurance of Russian food exports must be resolved, and logistical chains ensured. The increase in the cost of sea freight for cargo transportation and the cost of international payments and other transactions has cut export profits by half.
Point five. There must be no impediments for expanding Russian exports of fertilizers and raw materials for fertilizer production, including the recovery of the Togliatti-Odessa ammonia pipeline.
Point six. All Russian assets related to agricultural branch must be released.
Finally, point seven. The “grain deal” must recover its initial humanitarian nature. It must work to the benefit of developing countries rather than make the rich countries even richer.
As soon as these conditions are met, we will get back to the “grain deal” without delay. By delivering on these requirements, Western states will contribute to ensuring international food security. But so far, everything that we see and hear has been empty rhetoric and hypocrisy.