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Breadbasket Diplomacy: Preserving Wheat as a Tool of American Statecraft


Is the world facing “a potential mass starvation event” due to the war in Ukraine? It is starting to look that way. Vladimir Putin is weaponizing food and America is losing wheat as a tool of statecraft to counter it. The invasion and Russia’s blockade of Ukrainian ports in the Black Sea has created unprecedented market volatility and fears of a global food crisis. States that rely on Ukrainian wheat — notably those in the Middle East and Africa such as Egypt, Tunisia, and Yemen — will bear the immediate blunt of the crisis, but it will have far-reaching global effects.

While various attempts to unlock Ukrainian wheat are taking shape, most notably the tenuous deal brokered by Turkey and the United Nations at the end of July, they will not come soon enough to prevent starvation for some or in significant enough volumes to provide price relief for others. As Michael Kofman noted, while the Russians want the deal to export their own grain and fertilizer, they know very little Ukrainian grain will make it to market and Russia will let the deal collapse when it is convenient to them. These are also short-term solutions; the war will have longer term effects on Ukrainian wheat. Russian shelling in the Kherson region has resulted in large-scale fires with hundreds of hectares of wheat burned. More notable is the loss of prime agricultural producing regions to Russia and long-term loss of export capacity due to war damage to port facilities and loss of territorial control of key ports.

 

 

The United States, historically one of the largest wheat exporters, has been unable to come to the rescue as wheat has lost it place on U.S. farms and in government stockpiling programs. The United States, once referred to as the “Breadbasket of the World,” has seen sharp declines in wheat plantings and its share of global exports as U.S. farmers have increasingly chosen to plant other, more profitable commodities.

It is critical the United States get this capacity back not only in response to the war in Ukraine but in preparation for possible future attempts by Russia to incite a wheat crisis. States that would prefer not to enrich Putin’s coffers by purchasing stolen Ukrainian grain from Russia or even Russian wheat may not have another viable choice. Perhaps more importantly, securing American wheat export capacity is critical in the face of global food security challenges due to climate change and rising shipping and transport costs.

American Wheat as a Tool of Statecraft

Until recently, American wheat has been a vital tool of U.S. statecraft.

During World War I, the loss of French wheat fields to trench warfare and Russian and Ukrainian wheat due to the closing of the Dardanelles meant European allies would face food insecurity. Scarcity and high wheat prices in Britain, France, and eventually Italy resulted in political instability and bread riots. In March 1918 the prime ministers of France, Great Britain, and Italy issued a joint statement proclaiming their “deliberate conviction that food shortage, with its effect on the morale of the population, which has been one of the principal causes of the breakdown of Russia, is the greatest danger at present threatening each of the European Allies.”

American wheat was critical to the war effort against Germany and Austria-Hungary. As early as 1914, U.S. exports to its European allies were dominated by grain. American economist Edwin Clapp wrote in 1916 that, “Contrary to the general impression, our main exports to Europe have not been the weapons of war … The explanation for our great increase in exports is found rather in the group we call food, especially in breadstuffs.”

Shipped across the Atlantic under great peril, American wheat ensured the civilian populations in Britain, France, and Italy were fed at reasonable prices, allowing the respective governments to focus on the war effort. War posters in all the allied countries reflected the importance of wheat.

By 1918, American wheat imports were more critical to the European allies than munitions. In a joint statement, the leaders of France, Britain, and Italy declared to the Americans that a shipment of 1,000,000 tons of wheat in February and March of 1918 was the “minimum” because “the need of bread cereals in Europe cannot be exaggerated.” The shipping required to provide more wheat was achieved but was only “possible by reduction of the importation of munitions to such an extent as would not have been contemplated but for the critical character of the food situation.”

Wheat aid continued after the end of the war. In 1921, drought and famine broke out in the Volga and Ural regions in the Soviet Union. The famine, exacerbated by the government’s mass requisition of grain in previous years, is estimated to have killed about 100,000 people a week. Key to the relief effort was American wheat. Led by Herbert Hoover and the American Relief Administration, in December 1921, Congress passed an appropriation to send $20 million worth of corn and wheat seed to the Soviet Union. A survivor of the famine, Zukra Ibragimova, later captured the effect of American food aid: “People used to call that food ‘America,’” she says. “So we were handed out ‘America.’ At home, people cooked soup out of it, fed their children. This, of course, was a great help to us. My father used to say, ‘See, the Americans did the right thing, sent us help.’”

Other examples of wheat as a tool of statecraft abound. In the first ever televised U.S. presidential address from the White House, on October 5, 1947, President Harry S. Truman said of Europe, “Their most urgent need is food. If the peace should be lost because we failed to share our food with hungry people, there would be no more tragic example in all history of a peace needlessly lost.” President Truman’s recognition of the role ample food plays in maintaining peace was put into federal law under President Eisenhower shortly after the United States entered the Cold War. The Agricultural Trade, Development and Assistance Act of 1954, better known as its later title, “Food for Peace,” took surplus commodities from U.S. farmers to provide humanitarian assistance to around the world.

Throughout the Cold War, the United States capitalized on its wheat abundance to demonstrate American superiority though often under the guise of humanitarian assistance and economic development. In 1958, Sen. Hubert Horatio Humphrey undertook a yearlong study to review the operation, goals, and achievements of the Food for Peace program. The report, Food and Fiber as a Force for Freedom, criticized the narrow use of the program and noted, “A breakthrough in the conquest of hunger could be more significant in the cold war than the conquest of outer space.” The report was explicit in its recommendation, the United States should compete with the Soviet Union on food:

Thanks to our farm people, the United States is in a far better position than Russia to lead the world toward the conquest of hunger and want. At a time when we are trying to catch up with the Soviet Union in other areas of competition, agriculture is one segment of our economy already geared to meet any emergency challenge, already offering us fully productive resources to meet any Soviet threat of economic warfare throughout the world.

Both the Kennedy and Johnson administrations heeded the report’s recommendation and embraced American food — specifically wheat — power. In 1963, an increasing grain crisis forced the Soviet Union to seek wheat on the global market. In early October, Soviet officials approached the United States to purchase four million tons of American wheat. The National Security Council and Congress both took up the issue, using the sale of American wheat to draw down Soviet monetary reserves. President John F. Kennedy stated the sales would also represent a propaganda victory because they would “advertise to the world, as nothing else could, the success of free American agriculture. They demonstrate our willingness to relieve food shortages, to reduce tensions and to improve relations with all countries; and they show that peaceful agreements with the United States which serve the interests of both sides are a far more worthwhile course for our adversaries to follow than a policy of isolation and hostility.”

The Johnson administration continued to use American wheat surplus to meet national security goals. In the mid-1960s, facing reduced food production due to lower than expected rainfall and the inability to purchase grains from commercial suppliers due to foreign exchange constraints, India appealed to the United States for food assistance. President Lyndon B. Johnson, instead of providing food aid outright, engaged in short-term month-to-month contracts (known as short-tether policy) to extract concessions from India. Specifically, he used American wheat shape Indian agricultural reforms and foreign policy, specifically less vocal criticism to U.S. war policy in Vietnam.

This surplus of wheat continued to become part of America’s arsenal of democracy. In 1974, the secretary of agriculture, described food as a weapon that could be used to achieve American national objectives. He later told Time that his influence with both American and foreign diplomatic officials increased considerably during the 1970s because when he came “calling with wheat in my pocket, they pay attention.

Losing Wheat as a Tool of Statecraft

Though the United States is still the largest provider of in-kind food aid in the world (half of which is wheat), it no longer has the wheat capacity to come to the aid of others. Indeed, when the Russians stole Ukrainian grain and blocked the rest of it from leaving the country, America was unable to fill the needs of the wheat-importing nations effected.

Until the 1990s, various farm programs (coupled deficiency payments, the farmer-owned reserve, and marketing loan programs) all ensured a large supply of wheat. While these policies were criticized for producing overwhelming stocks of grain and depressing prices for farmers, they provided large stocks of wheat available for U.S. foreign policy objectives. “Food for Peace” and “Food for Progress” are two such programs that date back to the early days of the Cold War that allowed America’s agricultural bounty to be used as a tool of statecraft.

Changes to U.S. farm policy in 1990s — the Food, Agriculture, Conservation, and Trade Act of 1990 and the Freedom to Farm Act of 1995 — eroded this surplus. The end of federal acreage allotments occurred almost simultaneously with rapid technology gains in other grains and oilseeds — namely the adoption of genetically modified technology. U.S. farmers went from planting an average of more than 70 million acres of wheat at the end of the Cold War to less than 50 million today.

At the same time U.S. wheat acres began to shrink and production leveled off, it began to face increasing competition in overseas markets — especially from Russia and former Soviet Union countries that were modernizing their agricultural production systems. In 2004, Putin led a program aimed at ensuring 80 to 95 percent self-sufficiency in grain production. By 2017, Russia had become the world’s top wheat exporter, passing the United States and Canada for the first time and making Russia an agricultural export powerhouse. Putin was quoted as saying, “We are number one. We beat the U.S. and Canada.” Russian newfound wheat production was heavily directed at price-sensitive markets across the Middle East and North Africa. With the benefit of growing domestic production and cheap regional freight Russia and other Black Sea suppliers gobbled up wheat market share.

While Russia has emerged as the world’s top wheat exporter, China has emerged as the largest producer, consumer, and stockpiler of wheat in the world. It is estimated that over half of the world wheat stocks reside in China, which has made wheat and food a national priority and part of its national strategy.

“Considering the persistently rising grain demand, and the complicated international situation, grain security must be highlighted constantly. We’d rather produce and stockpile more. The pressure of more is incomparable to that of less,” said President Xi, according to the recently disclosed transcript of his speech. While China’s wheat production appears to ensure self-sufficiency rather than weaponization, China’s efforts to prioritize wheat supply with ambitious intent and policies has led them to be challenged with noncompliance with WTO rules and have been found in violation with subsidy programs.

Knowing the United States could no longer be the cheapest wheat supplier in the world, U.S. wheat growers and exporters turned towards premium export customers and geared the entire supply chain to deliver quality wheat at higher prices. This industry direction has effectively removed a tool from the U.S. foreign policy toolbox — the promise of ample, affordable wheat supplies. That tool, which was used to feed allies in World War I, rebuild Europe after World War II, and to garner the support of countries around the world in the Cold War, is no longer there. Worse yet for America’s strategic position, it has been claimed by Russia and potentially China. With Russian status as the world’s largest wheat exporter and reports of a coming record harvest, hungry countries around the globe are about to be put in the uncomfortable position of securing food from a widely sanctioned regime that has shown no restraint in its willingness to use food as a weapon of war.

Reinvesting in Wheat as a Foreign Policy Tool

To safeguard American wheat as a tool of statecraft, the United States needs to ensure its competitiveness in the global market. To once again become competitive, policymakers need to adopt new wheat technologies, invest in infrastructure to reduce transportation costs, and revive America’s strategic intent to be a leader in humanitarian grain assistance.

The United States ought to embrace genetically modified technology in food production. It is critical the wheat industry, with the support from the Biden administration, get serious about policies and approvals necessary to bring genetically modified wheat traits to the market. While in the 1990s corn and soybean framers embraced the genetic revolution, wheat farmers were deterred, concerned that U.S. trading partners would not purchase genetically engineered seed varieties and, in turn, hurting exports. With the loss of Ukrainian wheat, fertilizer shortages, and climate extremes continuing to stress global food systems and regional crop production, U.S. trading partners are now willing to purchase GM wheat. But the federal government must approve it. Steps are indeed being taken in this direction. In June, the U.S. Food and Drug Administration concluded a review of Argentinian genetically modified wheat, but the drought-resistant wheat would still need to be cleared by the U.S. Department of Agriculture. Embracing these technologies could be the most pivotal action for addressing world wheat production since Norman Borlaug and the Green Revolution.

The United States ought to correct transportation issues in the wheat supply chain. Notably, transportation costs for food commodities. The primary U.S. wheat-growing regions are uniquely dependent on access to railroads to move their product to overseas customers. Without direct access to ocean ports or other waterways, wheat has been captive to the increasingly investor-returns-minded railroads. Railroads have recognized that dependency and, in turn, charge a substantial premium to ship wheat, especially compared to corn, sorghum, or soybeans. The U.S. Department of Agriculture has recognized this discrepancy that disadvantages wheat, stating in a 2017 report that, “Wheat shippers, in particular, have found it difficult to compete in export markets, as they face higher rail rates than other grain shippers over similar corridors and rates that have not declined in response to changes in world wheat markets.” While there are a host of potential rate-related solutions in front of the Surface Transportation Board, the most straightforward is to correct the 1980s regulations that allowed railroads to price commodities differently for the same haul — so-called “differential pricing.”

Washington ought to incorporate grain in its national security policy and re-sow the seeds of what diplomacy. Policymakers need to conceive of wheat as a tool of statecraft. The time for such a discussion is ripe, as Congress is in the middle of considering changes to federal agricultural support laws, commonly known as the Farm Bill. Lawmakers are currently on listening tours and hosting hearings reviewing a wide myriad of programs covering the breadth of the U.S. food supply chain. Congressional leaders would do well to pay special attention to those policies impacting wheat production. Critical food assistance and development programs should be reviewed to ensure they are filling both the dual needs of reducing food insecurity and supporting ample domestic food production, which will allow the United States to aid its allies and secure its national security goals. Research program funding should be increased and targeted at core investments in stable crops and export credit programs should be adjusted to cover additional risk for the neediest markets and expanded repayment periods to ensure developing countries have reliable options to source key foodstuffs from.

Recognizing wheat security and export capacity is a national security issue, and the United States needs a strategic plan for wheat, appreciating wheat as a diplomatic tool beyond food aid.

 

Rosella Cappella Zielinski is an associate professor of political science at Boston University, a senior visiting fellow at the Clements Center for National Security at the University of Texas at Austin, and a non-resident fellow at the Krulak Center for Center for Innovation and Creativity and the Marine Corps University.

Justin Gilpin is the chief executive officer of the Kansas Wheat Commission and Kansas Association of Wheat Growers.

Image: Wikimedia Commons





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