16 March 27, 2014 2014 LOGAN COUNTY FARM OUTLOOK MAGAZINE LINCOLN DAILY NEWS.com
and it is well within reason to believe military
control of Crimea will be completely in the
hands of the Russian government. If so, even if
Ukraine maintains its independence under the
new government, Russia could effectively block
seagoing exports from that country.
If the No. 3 exporter in the world is knocked out
of the race even for a short time, this could drive
up the price of corn in the U.S. as Ukrainian
customers scurry to find other sources for
commodities.
This unrest between Russia and Ukraine could also
have a more direct effect on the coming season.
If Ukrainians are bound up in war against Russia,
they may not be concentrating on growing crops.
As men go to war instead of to the fields, Ukraine
could slip down the list in exporters and become
less important to the world market.
Ultimately, this could drive the price of corn up
for the rest of the world, though with production
being high and stockpiles growing in the U.S.
and other countries, the idea that supply will not
meet demand is not all that likely. In the end, the
battle of wills between Russia and Ukraine may
spur temporary increases in the markets, but the
vast stockpiles of corn worldwide will still keep us
from seeing the highs of a year ago.
On the other hand, if Putin is successful and brings
Ukraine back into the fold, the primary result
could be that instead of Ukraine being No. 3 in the
world, Russia could assume that title and still even
surpass the No. 2, Brazil. The effect that would
have on prices is still sketchy and depends much
on how the European Union threats of sanctions
against Russia are received by Putin.
It took 18 years for Russia to be joined into the
folds of the World Trade Organization. Prior to
joining the WTO in 2012, Russia was sanctioned.
One such sanction was the Jackson-Vanik
amendment, signed by the United States in 1974.
The amendment was meant to “hinder trade with
countries originally labeled as the communist
bloc that restricted freedom of emigration and
other human rights.” Russia responded to this
amendment by implementing large tariffs on
imported goods, effectively stopping trade between
itself and the United States from both directions.
The bottom line then was simply, “If you don’t
want to play with us, we don’t want to play with
you,” and both countries went about their business
without the other.
In 1992, the United States began forgoing the
Jackson-Vanik amendment with Russia, making
it easier for Russia to export to the U.S. However,
Russia refused to ease the tariffs on U.S. imports.
By doing this, the Russian government effectively
made the statement, “You need our goods more
than we need yours.”
Now, only two years into its membership in the
WTO, is it not likely that Putin will decide that
Russia once again doesn’t need the rest of the
world?
By Nila Smith
[Bibliography can be found on page 44]
