Politics

Grey ethics, black soil

The human implications of a deregulated market

Bordered by Russia and the Black Sea, Ukraine is known as a “breadbasket” nation, famed for its agricultural and heavy industry sectors. It stands as the largest country within Europe, with a population of over forty-two million people.

It is no stranger to conflict. Once a part of the now-dissolved Soviet Union, Ukraine struggled for sovereignty for much of the 20th Century – a status that it has since achieved. But even now, accounts of rigged elections, mass corruption, revolutions and land disputes confuse and disrupt the nation’s identity and goals.

At the South end of Ukraine sits Crimea, the subject of military conflict between Ukraine and Russia since 2014, when Russia annexed the area. Despite peace deals and ceasefires, conflict between Ukrainian and Russian rebel groups in Eastern Ukraine has continued well into 2017. Referred to as “the war no one notices,” the conflict has been marked by mass casualties and a lack of resources for those living in the conflict zone. One civilian told The New York Times “there had not been gas heat available since 2014,” despite temperatures plummeting to below 19 degrees Celsius on some winter nights.

Further north, the Western Central area of Ukraine hosts an entirely different scene. Here resides the Vinnytsia Oblast, an area renowned for its immense agricultural wealth, potentially even the resources to ensure global food security in an age of great population expansion. It is famed for its chernozem – miles upon miles of highly-fertile, mineral-heavy, rich black soil.

And so Ukraine can be viewed as a country in two minds: a place of both great national wealth and anxiety.

It was during the height of the Ukrainian crisis that confectionary tycoon, “Chocolate King,” Petro Poroshenko was elected as President of the nation. Poroshenko was praised for his anti-Russian establishment, pro-Europe stance, his promises to further represent Ukraine on the world stage and to improve living standards for all.

It was Poroshenko who signed an association agreement with the European Union – including the Deep and Comprehensive Free Trade Agreement (DCFTA), which opened much of the European market up to Ukraine’s exports and required that Ukraine abide by EU standards in many areas of economic policy. This was a choice that would increase trade and improve international relations – one which is proven to have been largely successful.

But this EU attention, alongside continuing national destabilisation and the fact that agriculture remains one of Ukraine’s only growing sectors, means that many players understand that this is a key time to push for deregulation. In Ukraine’s current market, all regulation (aside from taxation) has been suspended, meaning that industries, including the agricultural industry, do not have to undergo inspection from labour, health and safety, or environmental authorities (as of information provided by Bankwatch, 2015).

Myronivsky Hliboproduct (MHP) is Ukraine’s biggest poultry farming company. It boasts meat exports of 132 000 tonnes in 2015, with a 65% increase in exports to countries in the European Union. It has been able to borrow mass amounts of money from multiple sources – over 500 million euros alone from the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC), a part of the World Bank, in order to further expand its operations.

Particularly, MHP aims to double the size of its Vinnytsia complex, a compound which currently has 38 slaughterhouses, each with the capacity to hold 54,000 chickens. To increase their size, the company now wants to spread out onto land owned by local residents and vendors. This is the area where MHP – which also claims to have provided around 30,000 jobs and a bus service in the areas local to its complex – runs into trouble: with the community.

Following concerns and allegations from community members affected by the Vinnytsia complex, the EIB, EBRD and IFC made their loans to MHP with certain conditions attached. MHP was required to improve its environmental performance and further enhance the impact it had socially and developmentally. However, because the regulatory infrastructure to hold the company to account on these conditions is lacking, many locals feel that the conditions simply are not being taken seriously – and neither are their needs.

Campaigners on a fact-finding mission set out by organisation Bankwatch interviewed local representatives from three villages and the town of Ladyzhyn, all local to the Vinnytsia complex. They found that residents were concerned primarily about health and safety issues, and about their homes and livelihoods.

With no centralised water supply system in the area, access to and cleanliness of drinking water was a worry. Residents, who were reliant on water from wells, reported a drop in water levels which could be attributed to heavy usage by the complex. As well as this, the disposal methods of farm waste such as manure caused anxiety in the community, with many fearing that the water may have been contaminated by pathogens from waste products.

As well as this, they reported a sense of pressure to lease their privately owned land for the expansion of the complex – a demand with the potentiality to see many residents lose homes or livelihoods, alongside their sense of self-sustainability. Again, although loans for the expansion of the Vinnytsia complex came with the condition of improving small business connections, the government’s crackdown on inspection means that MHP has no incentive to comply.

Furthermore, the tactics used by the company to coerce residents into allowing the expansion have been referred to as “violent.” Research by Bankwatch has shown that residents report “being followed, having phones tapped,” and themselves and families repeatedly warned of ” the ‘consequences’ of activism.” There have even been reports of explicit violence, with one court hearing that a local activist had been “attacked and beaten by another villager because of different opinions about the ‘construction of the poultry farms’.”

There is a great local sense of dissatisfaction, fear, and resignation – complaints to government officials are often noted as ignored or met with hostility.

It is important to create jobs, expand economies and ensure increased food security – but this must be done responsibly, and large businesses must be held to account.

In allowing large businesses to remain unaccountable, does Ukraine display a tacit approval of profit over people? Should such extreme market deregulation be allowed if it risks livelihoods, supports the suppression of opinion and undermines the food health and safety values that other EU-associated countries must abide by?

The true price of cheap meat might be more than just what we pay at the counter.

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