1973 United States–Soviet Union wheat deal
In July 1973, the
Background
Because of the Soviet agricultural system, the cold climate, and frequent irregular droughts, crop failure was common in the Soviet Union.[1][2] The problem was heightened by the fact that climate problems prevented much of the arable land in the USSR from being farmed,[3] so only some of the land in the black earth belt was suitable for agriculture.[4][5]
In 1972, there was a drought across Europe. Soviet mismanagement of the situation led to catastrophic wheat crop failure.[6] Additionally, the USSR had suffered an extremely hot summer with temperature comparable to the heat experienced during 2010 Northern Hemisphere heat waves.[7] This caused the Soviet Union to look to the global market to meet their grain needs.[8][9]
Event
The main negotiations for the deal took place on June 20, 1972, at
The U.S. government spent $300 million subsidizing the grain purchases,[15] still unaware that the Soviets had suffered massive crop shortfalls in 1971 and 1972. One reason the government did not realize the impact the deal would have is that many officials, such as Earl Butz, were convinced that the Soviets were purchasing the grain only to feed their livestock.[16] By not realizing that global wheat stocks were low, and discounting reports of Soviet crop failure, the United States inadvertently contributed to domestic food prices rising, using public funds to do so.[15]
Aftermath and international consequences
Weeks after the grain deal was announced, the Earth-observing satellite Landsat 1 achieved orbit. If the satellite had launched a few months earlier, the deal may have been reconsidered or never have happened at all, because American negotiators could have realized the scale of Soviet crop failures.[17] The event helped lead the U.S. government to seek more information about global agricultural output via infrared satellite intelligence. After the deal, many Americans were concerned about businesses having advantages in similar situations due to their early access to information.[18]
In a ten-month span in 1973, global food prices rose by at least 30 percent and some sources claim up to 50 percent.[9][19][20][21] In some British markets there was a reported 87 percent increase on the price of an 800 grams (28 oz) loaf of bread.[22] Global wheat stocks decreased exponentially; Australia was hit the hardest with a 93 percent decrease by 1974 from 1971.[23] Not all nations were equally hit; some, such as Canada, benefited from the deal. Canadian farmers had sold their wheat to the Canadian Wheat Board, which were able to pool stocks and sell as a collective.[24]
Contemporary U.S. media referred to the event as "The Russian Wheat Deal" or "The Soviet Wheat Deal".[25][26] The term Great Grain Robbery is a pun referring to the 1963 Great Train Robbery and it is generally accepted that it was coined by Senator Henry M. Jackson.[27]
References
- ^ Golubev, Genady; Dronin, Nikolai (February 2004). "Geography Droughts and Food Problems in Russia (1900–2000)". Center for Environmental Systems Research. Archived from the original on October 11, 2019. Retrieved January 29, 2020.
- ^ "The Great Grain Robbery: Lessons Learned from Earth Imaging's Early History". Earth Imaging Journal: Remote Sensing, Satellite Images, Satellite Imagery. May 18, 2011. Archived from the original on November 10, 2017. Retrieved January 29, 2020.
- ISBN 9780713415544.
- ^ "Black Earth". novaonline.nvcc.edu. Archived from the original on February 27, 2018. Retrieved January 29, 2020.
- ^ "What Is The Central Black Earth Region Famous For?". WorldAtlas. September 18, 2017. Retrieved March 26, 2020.
- ^ Schubert, Siegfried; Wang, Hailan; Koster, Randal; Suarez, Max; Groisman, Pavel (December 23, 2013). "Northern Eurasian Heat Waves and Droughts" (PDF). NASA. Retrieved March 13, 2020.
- ISSN 0003-0007.
- ^ "Drought of 1972". www.geo.uio.no. Archived from the original on January 29, 2020. Retrieved January 29, 2020.
- ^ a b "Russia's Wheat Problem Could Be Just The Beginning Of A Global Food Crisis". Business Insider. August 8, 2010. Archived from the original on January 29, 2020. Retrieved January 29, 2020.
- ^ Fialka, John (October 29, 1972). "The Big Soviet Wheat Deal" (PDF). CIA. Archived from the original (PDF) on January 23, 2017. Retrieved January 21, 2020.
- from the original on March 30, 2019. Retrieved January 22, 2020.
- ISSN 0362-4331. Retrieved May 22, 2020.
- ^ "America Gets the Shaft". The Harvard Crimson. Archived from the original on December 1, 2016. Retrieved January 21, 2020.
- from the original on July 12, 2019. Retrieved January 17, 2020.
- ^ a b Powers, Rachel Chenven (October 29, 2015). "The 'Great Grain Robbery' of 1972". Earthzine. Retrieved January 17, 2020.
- S2CID 154693901.
- ^ "I Spy Thy Rye. Satellites can help gauge crop yields and predict famine, by Dave Levitan". Spectrum.IEEE.org. June 1, 2013. Retrieved June 10, 2019.
- ^ "About the Export Sales Reporting Program | USDA Foreign Agricultural Service". www.fas.usda.gov. Archived from the original on February 26, 2017. Retrieved January 24, 2020.
- ISBN 0345241509.
- ^ "What Causes Food Prices To Rise? What Can Be Done About It?". U.S. Government of Accountability Office. September 8, 1976. Archived from the original on April 19, 2019. Retrieved March 26, 2020.
- ISSN 0362-4331. Retrieved January 17, 2020.
- from the original on June 11, 2019. Retrieved January 21, 2020.
- ^ "USDA ERS – Agricultural Commodity Price Spikes in the 1970s and 1990s: Valuable Lessons for Today". www.ers.usda.gov. Archived from the original on December 8, 2019. Retrieved January 17, 2020.
- ^ Larsen, Laura (August 1, 2012). "Repurposing the Great Grain Robbery in Canada" (PDF). University of Saskatchewan. Retrieved January 17, 2020.
- ^ Luttrell, Clifton B. (October 1973), The Russian Wheat Deal – Hindsight vs. Foresight, Reprint No. 81 (PDF), Federal Reserve Bank of St. Louis, archived (PDF) from the original on July 28, 2011, retrieved July 26, 2011
- ^ Alexander, Holmes (September 6, 1974). "Who was the real villain in Russian wheat deal?". Rome News-Tribune. Archived from the original on April 24, 2016. Retrieved July 26, 2011 – via Google News.
- ^ Morgan, Dan (June 10, 1979). "The Shadowy World of Grain Trade". Washington Post. Retrieved January 24, 2020.
Further reading
- Morgan, Dan (1979). Merchants of Grain. New York: Viking.
- "Nation: The Great Wheat Deal". Time Magazine. New York. October 18, 1963. Retrieved March 11, 2020.
- Staats, Elmer (April 30, 1973). "Examination Into Feed and Related Matters" (PDF). Retrieved March 11, 2020.
- Staats, Elmer (July 9, 1973). "Russian Wheat Sales and Weaknesses in Agriculture's Management of Wheat Export Subsidy Program" (PDF). Retrieved March 11, 2020.
- Staats, Elmer (February 12, 1974). "Exporters' Profits On Sales Of U.S. Wheat To Russia" (PDF). Retrieved March 11, 2020.
- Trager, James (1973). Amber Waves of Grain. New York: Arthur Fields. pp. 243. ISBN 0-525-63010-4.