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Struggling US farmers worry about one thing: a resurgent Russia

Russian wheat exports are booming despite a crushing price slump, as the country’s farmers finally emerge from decades of neglect

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Via The Wall Street Journal

Otradnaya, Russia – Vladimir Mishurov transformed the remnants of the “Lenin’s Path” collective farm in this village into a profitable business. He also helped make Russia the world’s largest wheat exporter for the first time since the last years of the czars.

Over the past decade or so, Mishurov has changed the aging Russian machinery to dozens of modern machines from John Deere and other manufacturers and has begun to make extensive use of new efficient fertilizers and seeds. He bought and rented additional land from neighbors and relatives, bringing the area to 1,500 hectares – the benefit that in Russia the prices for it are relatively low.

Like many American farmers, he often worked days and nights and slept very little, especially during harvesting.

The main difference between Mishurov and the average farmer from the Great American Plains is that in Russia they are lower costs, and they are mostly in rubles , and from the sale of their products abroad, he gets a lot of money, because he sells it for dollars.

Against the backdrop of a long and serious decline in grain prices, Russian agriculture is flourishing. For the year ending in June, the country exported more than 40 million tons of wheat, which is 50% more than last year, and the highest among all countries in the world in the last quarter of a century. In 2016, Russia overtook the United States in terms of wheat exports and became the first in the world, and in 2018 it repeated this achievement.

The growth of Russian competitiveness is a serious problem that creates a threat to American farmers. The United States has closed the largest number of farms since the 1980s. Overproduction of grain in the world pushed prices down, and today they are half compared to the level of 2012 when the price peak was reached. For the same reason, it is difficult for US farmers to earn a dollar profit.

Because of US trade disputes with China and other countries, Russian wheat can become even more attractive if large buyers enter reciprocal duties on American grain. China increased them by 25%, but Chinese restrictions on imports from Russia prevented Moscow from taking advantage of the emerging advantage. This was told by Swithun Still, who is the director of the Solaris Commodities SA, a Swiss company that sells Russian grain.

While there is no “trade war, but laws of economics”, they help Russian wheat compete, and even in countries that are neighbors with the United States, say, in Mexico, noted Still. According to him, Russian grain has become more quality, and it is cheaper.

Russian farmers are moving ahead when export earnings are converted into rubles. The Russian currency has fallen in price, and the dollar exchange rate is now twice as high as in 2014. Russia has the same advantage in relation to the euro and other currencies. Its farmers cover the costs of the house, continuing to sow grain, and also defeating their western competitors by price indicators.

The growth in exports of Russian agricultural products, including grain, fish and meat, is an integral part of efforts to diversify the economy and eliminate its dependence on oil. Once, oil and gas gave half of the revenues to the federal budget. Now, when oil prices are 25% below the record level in 2014 (they rose significantly after more than 60% fall), oil and gas exports account for about 40% of budget revenues.

“As oil prices fell, grain came on ahead. Grain is our oil , “said the then Minister of Agriculture, Alexander Tkachev, in 2016.

Cheaper wheat from Russia squeezes American and European grain from the markets of import-dependent countries in the Middle East and North Africa, where the Kremlin has in recent years been fighting to strengthen its military and diplomatic influence.

In 2017, exports of agricultural products amounted to $ 20.7 billion in monetary terms, outstripping arms exports and ranking second in revenue. Wheat is about a quarter in total.

According to the US Department of Agriculture, the crop area of ​​wheat in Russia as of June was almost twice as high as in the US. American farmers, not seeing the opportunity to earn, sowed the smallest area in wheat in the history of statistical observations. This year, the production of wheat in the US declined by 25%.

The farm Mishurova is located in the fertile steppe in the south of Russia. This region is the largest grain producer in the country. For the rich in minerals black earth and mild climate it has long been called the granary of Russia.

Mishurov today is 46 years old. In his youth he worked as a tractor driver, driving around on a roaring tractor, whose engine had to be repaired every year, which made his hands forever rough. Money was not enough, and the workers received wages in kind: sacks of flour, wheat and sugar. Drunkenness in the countryside was ubiquitous.

In the early twentieth century, Russia was the world’s largest exporter of wheat. The Soviets killed and threw in jail millions of people, including the most hard-working and successful farmers. They did this in an attempt to create a system of collective farms, which turned out to be ineffective. By the 1970s, the Soviet Union was forced to import grain.

After the collapse of the Soviet Union in 1991, the collective farms struggled, but continued to exist, and they were run by the same bosses who had neither business acumen nor money to invest .

“There was no master,” says Mishurov. “They could not adapt to a market economy.” They are accustomed to follow the instructions without thinking. ”

Farm workers came to work “to kill time, and waited for the end of the working day to go home,” says farmer Andrei Burdin, who lives in a neighboring village and cultivates land that once belonged to the collective farm “Dawn of Communism”. “Agriculture has reached a dead end,” he adds.

In the late 1990s, Russia allowed the sale of land, but new investors and their managers were far from agriculture and did not want to take risks.

Mishurov, who worked as the chief agronomist in a large multidisciplinary agricultural company, recalls how in the early 2000s he told one manager that if pesticides were used, the yield of barley could be increased by a quarter.

“No, Vova, that’s enough for us, too,” the manager replied. “Why should I try to persuade someone to earn more money?” – says Mishurov.

In the mid-2000s, he decided to start his own business. First he collected the land of his relatives and all the equipment he could find. Today, Mishurov grows wheat, barley, beets, corn, sunflower, peas and other crops.

43-year-old Burdin in 2005 began to cultivate about 100 hectares of land on his visionary tractor and seeder. The profit he invested in more efficient machinery and fertilizers, and then expanded the area of ​​his arable land, renting them from neighbors.

“When we earned the first money, I did not buy a Mercedes and an apartment ,” Burdin said. “I invested them in the next season.”

First he bought Russian equipment, but then switched to tractors and harvesters “John Deere”, which the Russians call “green technology.” According to Burdin, he tested the John Deere harvester in comparison with the Russian combine and found that from the same area it can grind a third more grain.

He also bought a precision seeder from the Swedish company Vaderstad AB, which plants seeds at optimum depth and at optimal intervals, which increases yields. Today, Burdin cultivates about 1,500 hectares.

Downloading seeds in April in the seed drill, he joked with his workers on the topic of old technology. Burdin recalled how he worked with a sprayer of pesticides, which permeated him with poisonous chemicals. According to the farmer, he worked on it no more than four hours a day, fearing for his own health. Now its installation itself measures how much to spray pesticides and where, which leads to cost reduction.

Voronezh, Russia. Tempo F8 plant corn and sunflower, Tempo R12 prepares the land for planting sugar beet.

The prices for land in the area where Mishurov and Burdin live are much lower than in many of the competing countries. On average, agricultural land in Romania, which is located on the Black Sea and is a member of the European Union, costs almost three times more than in Russia. And the land in Iowa and Kansas is more expensive than Russia’s more than five times, as evidenced by the research data of the Moscow firm SovEcon, which specializes in the analysis of agricultural markets, forecasts for Russian agriculture and consulting services.

According to Burdin, Russian seeds and fertilizers are cheaper than Western seeds, although their quality has improved significantly in recent years. He buys semen from the State Institute of Agriculture, and can use the crop for seeding next season. Many US farmers use expensive and high-yielding patented seeds from companies such as Bayer AG and DowDuPont Inc.; but the crop obtained from them can not be used for planting, because of which farmers are forced to annually purchase fresh seeds.

Transportation costs in the region are also low. It is located near the Black Sea ports, and diesel fuel and gas there are much less than in Western Europe. Burdin and Mishurov own a fleet of trucks, on which they export grain to the port of Novorossiysk, located at a distance of 320 kilometers.

Private and state-owned companies in recent years have modernized grain terminals and increased their throughput. Farmers using the application in their smartphones can order a time interval for the delivery of grain by their trucks, so that cars are no longer waiting for days in the queue.

Record harvests create a serious strain on the infrastructure . Windows for grain discharge are dismantled very quickly, and farmers are often given time with a delay of several days, says Burdin.

Export could be further increased, they find the opportunity to ship more, he notes.

Russia views this as a priority task. President Vladimir Putin ordered officials to eliminate bottlenecks in the infrastructure, which hinder the increase in exports. In the interior of the country, long distances, as well as a shortage of wagons and elevators, is the main obstacle to supplying grain to the foreign market.

In one of Russia’s largest Novorossiysk terminal this year, modernization is being completed, and it will almost double its capacity. Other companies also plan to build and expand terminals on the Black and Baltic Seas, as well as in the Far East. According to officials, the expansion of ports is capable of increasing the export of grain by 50%, and by 2020 it can be brought up to 7.5 million tons per month.

The government in every possible way praises state subsidies, including inexpensive loans, which help farmers to change old equipment. Analysts and farmers note that the state’s efforts to support farmers are unsystematic and give variable success. Subsidies often fall into companies with the right connections, investments go to agriculture slowly, and bureaucrats and officials often wait for bribes.

“Farmers have found freedom and can do their work as they see fit and effective ,” said Andrei Sizov, director of the SovEcon Analytical Center. “The role of the state in the past ten years is very small, and this is good for the industry.”

Giant agricultural holdings, which are multidisciplinary companies created by wealthy tycoons and close to federal and regional authorities, operate on such a scale that Western farmers are looking like dwarfs against their backdrop. The share of private farms of more than 100 thousand hectares or thousands of square kilometers in Russia accounts for about 13% of all cultivated land, says Sizov.

Now Mishurov can afford such luxury as collecting and restoring old Soviet cars and rest in the Maldives or in Thailand. But he says he prefers to stay at home.

Here, poor villages depend on the generosity of wealthy farmers. Mishurov allocated money to repair the statue of Lenin and the monument to local residents who died during the Second World War, and Burdin paid for the repair of the local kindergarten.

Mishurov has 10 agricultural workers, three security guards and a cook preparing food for the workers. “It’s a lot for our squares, but we try to keep jobs in the countryside,” he says. One morning a man came to the house to ask Mishurov to ask for a bucket of corn for his hens. He was a former collective farm chairman.

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David BowlasWalter DublanicaTomam hantsTom Welsh Recent comment authors
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Tom Welsh
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Tom Welsh

If that article was written by “James Marson” and published by the Wall Street Journal, I will be very surprised. It is poorly written and edited, and has a distinct foreign – maybe Russian – twang to it.

“One morning a man came to the house to ask Mishurov to ask for a bucket of corn for his hens”.

No decent journalist would write that sentence – and certainly no decent editor would fail to correct it.

AM Hants
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AM Hants

Not forgetting, Russian grain is GM free. Must look out for Russian wheat products.

Tom
Guest
Tom

Maize: $370/bu CME DEC futures.. subtract $0.20 for the local grain elevator.. Central Illinois is hurting as this is at production costs.. at 200/bu/acre
The situation for Russia is a bit different.. the climate is better for production of hard winter wheat and by doing multi year cropping of the same wheat , costs at lower.. also by not using anhydrous ammonia and spreading fertilizers in the spring, less is lost to water run-off and less is needed.. Average acreage in this area is 1000 hectares per farm.

Walter Dublanica
Member

Russia is an oil/gas/grain/nuke super power. Russia & Ukraine have about 80% of the worlds “black earth” soil. As they say in Ukraine if you put a shovel in the ground it will grow, meaning that the soil is that fertile.

David Bowlas
Guest
David Bowlas

Well Russia has been trying to give an olive branch to America for years and those big headed Tvvats have just taken the P1s$. And their gutless poodles led by Britain have just tried to gain brownie points by pretending that Russia has put Novichok on the streets of Little England. Well cry me a river and F#ck 0f£.

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EXPLOSIVE: Michael Cohen sentencing memo exposes serial liar with nothing to offer Mueller (Video)

The Duran Quick Take: Episode 38.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at the Michael Cohen sentencing memo which paints the picture of a man who was not as close to Trump as he made it out to be…a serial liar and cheat who leveraged his thin connections to the Trump organization for money and fame.

It was Cohen himself who proudly labelled himself as Trump’s “fixer”. The sentencing memo hints at the fact that even Mueller finds no value to Cohen in relation to the ongoing Trump-Russia witch hunt investigation.

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Via Axios

Special counsel Robert Mueller and federal prosecutors in New York have each submitted sentencing memos for President Trump’s former personal attorney Michael Cohen, after Cohen pleaded guilty in two different cases related to his work for Trump and the Trump Organization.

The big picture: The Southern District of New York recommended Cohen serve a range of 51 to 63 months for four crimes — “willful tax evasion, making false statements to a financial institution, illegal campaign contributions, and making false statements to Congress.” Mueller, meanwhile, did not take a position on the length of Cohen’s statement, but said he has made substantial efforts to assist the investigation.

Southern District of New York

Mueller investigation

Michael J. Stern, a federal prosecutor with the Justice Department for 25 years in Detroit and Los Angeles noted via USA Today

In support of their request that he serve no time in prison, Cohen’s attorneys offered a series of testimonials from friends who described the private Michael Cohen as a “truly caring” man with a “huge heart” who is not only “an upstanding, honorable, salt of the earth man” but also a “selfless caretaker.”

The choirboy portrayed by Cohen’s lawyers stands in sharp opposition to Cohen’s public persona as Trump’s legal bulldog, who once threatened a reporter with: “What I’m going to do to you is going to be f—ing disgusting. Do you understand me?”

Prosecutors focused their sentencing memo on Cohen as Mr. Hyde. Not only did they detail Cohen’s illegal activities, which include millions of dollars of fraud, they also recognized the public damage that stemmed from his political crimes — describing Cohen as “a man who knowingly sought to undermine core institutions of our democracy.”

Rebuffing efforts by Cohen’s attorneys to recast him as a good guy who made a few small mistakes, prosecutors cited texts, statements of witnesses, recordings, documents and other evidence that proved Cohen got ahead by employing a “pattern of deception that permeated his professional life.” The prosecutors attributed Cohen’s crimes to “personal greed,” an effort to “increase his power and influence,” and a desire to maintain his “opulent lifestyle.”

Perhaps the most damning reveal in the U.S. Attorney’s sentencing memo is that Cohen refused to fully cooperate. That’s despite his public relations campaign to convince us that he is a new man who will cooperate with any law enforcement authority, at any time, at any place.

As a former federal prosecutor who handled hundreds of plea deals like Cohen’s, I can say it is extremely rare for any credit to be recommended when a defendant decides not to sign a full cooperation deal. The only reason for a refusal would be to hide information. The prosecutors said as much in their sentencing memo: Cohen refused “to be debriefed on other uncharged criminal conduct, if any, in his past,” and “further declined” to discuss “other areas of investigative interest.”

 

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Canada to Pay Heavy Price for Trudeau’s Groupie Role in US Banditry Against China

Trudeau would had to have known about the impending plot to snatch Huawei CFO Wanzhou and moreover that he personally signed off on it.

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Authored by Finian Cunningham via The Strategic Culture Foundation:


You do have to wonder about the political savvy of Canadian Prime Minister Justin Trudeau and his government. The furious fallout from China over the arrest of a senior telecoms executive is going to do severe damage to Canadian national interests.

Trudeau’s fawning over American demands is already rebounding very badly for Canada’s economy and its international image.

The Canadian arrest – on behalf of Washington – of Meng Wanzhou, chief financial officer of Chinese telecom giant Huawei, seems a blatant case of the Americans acting politically and vindictively. If the Americans are seen to be acting like bandits, then the Canadians are their flunkies.

Wanzhou was detained on December 1 by Canadian federal police as she was boarding a commercial airliner in Vancouver. She was reportedly handcuffed and led away in a humiliating manner which has shocked the Chinese government, media and public.

The business executive has since been released on a $7.4 million bail bond, pending further legal proceedings. She is effectively being kept under house arrest in Canada with electronic ankle tagging.

To add insult to injury, it is not even clear what Wanzhou is being prosecuted for. The US authorities have claimed that she is guilty of breaching American sanctions against Iran by conducting telecoms business with Tehran. It is presumed that the Canadians arrested Wanzhou at the request of the Americans. But so far a US extradition warrant has not been filed. That could take months. In the meantime, the Chinese businesswoman will be living under curfew, her freedom denied.

Canadian legal expert Christopher Black says there is no juridical case for Wanzhou’s detention. The issue of US sanctions on Iran is irrelevant and has no grounds in international law. It is simply the Americans applying their questionable national laws on a third party. Black contends that Canada has therefore no obligation whatsoever to impose those US laws regarding Iran in its territory, especially given that Ottawa and Beijing have their own separate bilateral diplomatic relations.

In any case, what the real issue is about is the Americans using legal mechanisms to intimidate and beat up commercial rivals. For months now, Washington has made it clear that it is targeting Chinese telecoms rivals as commercial competitors in a strategic sector. US claims about China using telecoms for “spying” and “infiltrating” American national security are bogus propaganda ruses to undermine these commercial rivals through foul means.

It also seems clear from US President Donald Trump’s unsubtle comments this week to Reuters, saying he would “personally intervene” in the Meng case “if it helped trade talks with China”, that the Huawei executive is being dangled like a bargaining chip. It was a tacit admission by Trump that the Americans really don’t have a legal case against her.

Canada’s foreign minister Chrystia Freeland bounced into damage limitation mode following Trump’s thuggish comments. She said that the case should not be “politicized” and that the legal proceedings should not be tampered with. How ironic is that?

The whole affair has been politicized from the very beginning. Meng’s arrest, or as Christopher Black calls it “hostage-taking”, is driven by Washington’s agenda of harassment against China for commercial reasons, under a legal pretext purportedly about Iranian sanctions.

When Trump revealed the cynical expediency of him “helping to free Wanzhou”, then the Canadians realized they were also being exposed for the flunkies that they are for American banditry. That’s why Freeland was obliged to quickly adopt the fastidious pretense of legal probity.

Canadian premier Justin Trudeau has claimed that he wasn’t aware of the American request for Wanzhou’s detention. Trudeau is being pseudo. For such a high-profile infringement against a senior Chinese business leader, Ottawa must have been fully briefed by the Americans. Christopher Black, the legal expert, believes that Trudeau would had to have known about the impending plot to snatch Wanzhou and moreover that he personally signed off on it.

What Trudeau and his government intended to get out of performing this sordid role for American thuggery is far from clear. Maybe after being verbally mauled by Trump as “weak and dishonest” at the G7 summit earlier this year, in June, Trudeau decided it was best to roll over and be a good little puppy for the Americans in their dirty deed against China.

But already it has since emerged that Canada is going to pay a very heavy price indeed for such dubious service to Washington. Beijing has warned that it will take retaliation against both Washington and Ottawa. And it is Ottawa that is more vulnerable to severe repercussions.

This week saw two Canadian citizens, one a former diplomat, detained in China on spying charges.

Canadian business analysts are also warning that Beijing can inflict harsh economic penalties on Ottawa. An incensed Chinese public have begun boycotting Canadian exports and sensitive Canadian investments in China are now at risk from being blocked by Beijing. A proposed free trade deal that was being negotiated between Ottawa and Beijing now looks dead in the water.

And if Trudeau’s government caves in to the excruciating economic pressure brought to bear by Beijing and then abides by China’s demand to immediately release Meng Wanzhou, Ottawa will look like a pathetic, gutless lackey to Washington. Canada’s reputation of being a liberal, independent state will be shredded. Even then the Chinese are unlikely to forget Trudeau’s treachery.

With comic irony, there’s a cringemaking personal dimension to this unseemly saga.

During the 197os when Trudeau’s mother Margaret was a thirty-something socialite heading for divorce from his father, then Prime Minister Pierre Trudeau, she was often in the gossip media for indiscretions at nightclubs. Rolling Stones guitarist Keith Richards claims in his autobiography that Margaret Trudeau was a groupie for the band, having flings with Mick Jagger and Ronnie Wood. Her racy escapades and louche lifestyle brought shame to many Canadians.

Poor Margaret Trudeau later wound up divorced, disgraced, financially broke and scraping a living from scribbling tell-all books.

Justin, her eldest son, is finding out that being a groupie for Washington’s banditry is also bringing disrepute for him and his country.

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US Commits To “Indefinite” Occupation Of Syria; Controls Region The Size Of Croatia

Raqqa is beginning to look more and more like Baghdad circa 2005.

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Via Zerohedge


“We don’t want the Americans. It’s occupation” — a Syrian resident in US-controlled Raqqa told Stars and Stripes military newspaper. This as the Washington Post noted this week that “U.S. troops will now stay in Syria indefinitely, controlling a third of the country and facing peril on many fronts.”

Like the “forever war” in Afghanistan, will we be having the same discussion over the indefinite occupation of Syria stretching two decades from now? A new unusually frank assessment in Stars and Stripes bluntly lays out the basic facts concerning the White House decision to “stay the course” until the war’s close:

That decision puts U.S. troops in overall control, perhaps indefinitely, of an area comprising nearly a third of Syria, a vast expanse of mostly desert terrain roughly the size of Louisiana.

The Pentagon does not say how many troops are there. Officially, they number 503, but earlier this year an official let slip that the true number may be closer to 4,000

A prior New Yorker piece described the US-occupied area east of the Euphrates as “an area about the size of Croatia.” With no Congressional vote, no public debate, and not even so much as an official presidential address to the nation, the United States is settling in for another endless occupation of sovereign foreign soil while relying on the now very familiar post-911 AUMF fig leaf of “legality”.

Like the American public and even some Pentagon officials of late have been pointing out for years regarding Afghanistan, do US forces on the ground even know what the mission is? The mission may be undefined and remain ambiguously to “counter Iran”, yet the dangers and potential for major loss in blood and treasure loom larger than ever.

According to Stars and Stripes the dangerous cross-section of powder keg conflicts and geopolitical players means “a new war” is on the horizon:

The new mission raises new questions, about the role they will play and whether their presence will risk becoming a magnet for regional conflict and insurgency.

The area is surrounded by powers hostile both to the U.S. presence and the aspirations of the Kurds, who are governing the majority-Arab area in pursuit of a leftist ideology formulated by an imprisoned Turkish Kurdish leader. Signs that the Islamic State is starting to regroup and rumblings of discontent within the Arab community point to the threat of an insurgency.

Without the presence of U.S. troops, these dangers would almost certainly ignite a new war right away, said Ilham Ahmed, a senior official with the Self-Administration of North and East Syria, as the self-styled government of the area is called.

“They have to stay. If they leave and there isn’t a solution for Syria, it will be catastrophic,” she said.

But staying also heralds risk, and already the challenges are starting to mount.
So a US-backed local politician says the US can’t leave or there will be war, while American defense officials simultaneously recognize they are occupying the very center of an impending insurgency from hell — all of which fits the textbook definition of quagmire perfectly.

The New Yorker: “The United States has built a dozen or more bases from Manbij to Al-Hasakah, including four airfields, and American-backed forces now control all of Syria east of the Euphrates, an area about the size of Croatia.”

But in September the White House announced a realignment of its official priorities in Syria, namely to act “as a bulwark against Iran’s expanding influence.” This means the continued potential and likelihood of war with Syria, Iran, and Russia in the region is ever present, per Stripes:

Syrian government troops and Iranian proxy fighters are to the south and west. They have threatened to take the area back by force, in pursuit of President Bashar Assad’s pledge to bring all of Syria under government control.

Already signs of an Iraq-style insurgency targeting US forces in eastern Syria are beginning to emerge.

In Raqqa, the largest Syrian city at the heart of US occupation and reconstruction efforts, the Stripes report finds the following:

The anger on the streets is palpable. Some residents are openly hostile to foreign visitors, which is rare in other towns and cities freed from Islamic State control in Syria and Iraq. Even those who support the presence of the U.S. military and the SDF say they are resentful that the United States and its partners in the anti-ISIS coalition that bombed the city aren’t helping to rebuild.

And many appear not to support their new rulers.

We don’t want the Americans. It’s occupation,” said one man, a tailor, who didn’t want to give his name because he feared the consequences of speaking his mind. “I don’t know why they had to use such a huge number of weapons and destroy the city. Yes, ISIS was here, but we paid the price. They have a responsibility.”

Recent reports out of the Pentagon suggests defense officials simply want to throw more money into US efforts in Syria, which are further focused on training and supplying the so-called Syrian Democratic Forces (or Kurdish/YPG-dominated SDF), which threatens confrontation with Turkey as its forces continue making preparations for a planned attack on Kurdish enclaves in Syria this week.

Meanwhile, Raqqa is beginning to look more and more like Baghdad circa 2005:

Everyone says the streets are not safe now. Recent months have seen an uptick in assassinations and kidnappings, mostly targeting members of the security forces or people who work with the local council. But some critics of the authorities have been gunned down, too, and at night there are abductions and robberies.

As America settles in for yet another endless and “indefinite” occupation of a Middle East country, perhaps all that remains is for the president to land on an aircraft carrier with “Mission Accomplished” banners flying overhead?

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