By Volodymyr Chopenko
Zerkalo Nedeli On the WEB
Mirror-Weekly, Kyiv, Ukraine
Saturday, 28 December 2002 - 10 January 2003

I like songs of bards I like this one, too: "The skies above Canada are blue, and the slanting rains wash birch trees white." When slanting and vertical rains were washing the country of Trident and Maple Leaf, four bulkers carrying a cargo of grain set off from Mykolayiv, Illichivsk and Odessa heading for the port of Quebec on the St. Laurence River.

They had the required documentation on board - phytosanitary export certificates signed and sealed by the State Plant Quarantine Inspection of Ukraine. At their destination, however, the Canadian Food Inspection Agency (CFIA) identified the banned mycotic diseases - Tilletia Controversa and Urocystis Agropyri - in all grain lots. In order to prevent the adverse effect on the local grain processing industry, the Canadian authorities ordered the grain from the three vessels to be used as forage and prohibited to unload the fourth bulker. Are we in for another grain scandal!

Were there not enough scandals with Brazil and France? In France, Edit Piaf and Charles Aznavour's compatriots used to think, until recently, that DDT was a rock-group from St. Petersburg. Now they know it is a chemical compound lethal for field pests. The information about the French sanitary services' detecting traces of it in the grain of Ukrainian origin imported by a well-known forage manufacturer caused a real panic. Officially, this harmful insecticide has not been used in Ukraine since it was banned in 1970. How could it have been found in the grain?

The analysts of the APK-Inform information agency offer several versions of these events. According to them, as the grain was loaded on the "Khanjin Istanbul" vessel in the port of Pivdenny (Khymichna Bay) it is likely that the remains of the chemical substances in the former chemical warehouses later refurbished into the grain ones could get mixed with the grain stored loose on the floor. Another version is even simpler: the DDT was banned but nobody knows if all of it was recovered (disposed of).

It is no secret that discarded DDT is still kept in warehouses of the former state and collective farms. This substance could have been washed by rains or transmitted by groundwater onto the fields, thus accounting for its non-sanctioned penetration into the grain. As for the sanctioned one, there is nothing unusual here, too: for want of money for expensive new-generation pesticides, the agricultural workers use the obsolete insecticide, which is free as nobody claims ownership of it.

The French repeatedly send the grain to laboratories for additional tests and invite experts to examine grain samples. They assure the interested parties that even if the DDT presence in the grain is confirmed, the problem will remain an internal one, since the grain has been cleared through French customs. The consignee and the grain traders will have to address this problem. According to the French authorities, the incident will not affect the Ukrainian import of grain to France, the more so that the introduction of import bans is in the European Union's exclusive competence.

Now what about Canada? On 6 December 2002, the CFIA imposed an embargo on the import of our grain. The Ukrainian Ambassador to Canada Yuriy Shcherbak and the Canadian Ambassador to Ukraine Andrew Robinson, as well as the Ministry of Agrarian Policy of Ukraine were galvanized into action.

As the abovementioned bard song has it, "I should have long been asleep. Why am I sleepless?"

We know why. The two countries have not signed an agreement on cooperation in the spheres of plant quarantine and plant protection, but Ukraine, one of the world's grain exporting counties, was blamed as a nidus of plant parasites, for no good reason at all. The country suffers moral and economic damage, though the fault is to be found with the grain traders tempted by the Canadian markets.

Moreover, the grain traders are not Ukrainian companies. But the grain is theirs and they market it as they see fit. They are free to sell it to Africa -the famine-stricken nations will buy it with their eyes shut to the presence of insects; they are even free to throw it into the ocean.

In spite of all this, Ukraine did not start offering excuses to their overseas partner. Neither did it intend to accept the blame. "We will find out what happened and why" - promised the Ukrainian authorities.

I cannot see the grain traders' logic: why should they go to the other side of the world to look for trouble? Indeed, Canada was reported to have had the poorest wheat crop in the last 28 years - one third less than the year before, the barley crop being equally low. Yet they are likely to fill in their forage niche with American corn rather than Ukrainian wheat. Selling wheat to Canada is the same as carrying coal to Newcastle, or, if you wish, sunflower seed oil to Ukraine!

The traders must have aimed for profit. An insignificant shortage of forage grain in Canada caused a price rise, and the commercial structures dealing in grain decided to take advantage of the market situation. Having bought wheat dirt-cheap at the peak of its supply in Ukraine and then selling it in Canada they could have reaped a handsome profit. If it had not been for the "infected" grain, of course.

- The internal investigation revealed that during the loading of the "Golden Glow" vessel in Illichivsk the grain traders representing foreign firms violated the regulations on the procedure of inspecting exported and imported grain and grain produce by the State Grain Inspection, having mixed up the wheat of Ukrainian and Russian origin. It was in the hold of this vessel that the Canadian inspectors detected grain parasites, - says Hryhoriy Omelyanenko, Head of Department for International Integration, Investment Policy and Agrarian Business Development, summarizing the first findings of the inquiry. -

At the moment it is hard to say whether the grain in the holds of other barges was also contaminated, as the Canadians had fed the grain to cattle before our experts could come and see everything on the ground. Earlier the same grain traders had been involved in a scandal with fungi spores found in a shipment of grain they exported to Brazil. And even this is only part of the problem.

We compared the originals of the phytosanitary export certificates issued in the ports of Odessa, Mykolayiv and Illichivsk with those produced by our Canadian counterparts. You needn't be a criminologist to spot the forgery.

First, the certificate numbers and the weight of shipments do not match.

Second, the "Canadian" documents are signed by officials who have not worked for the State Plant Quarantine Inspection for three years.

Third, section 11 of the authentic phytosanitary certificates contains additional information on detected insects and diseases formulated briefly and clearly, while the forged documents provide long explanations with lists of diseases.

We have developed several possibilities: smuggling, the uncontrolled sale of infected produce to foreign countries, etc. We do not exclude the possibility of a premeditated diversion taking its roots in the story of Ukrainian wheat export to Brazil.

Of course, the party at fault will have to pay for it, and not only with their promissory notes. Forgery is a criminal offence both in Canada and in Ukraine. Ukraine, acting in compliance with Articles 33 and 37 of the Law of Ukraine "On Foreign Economic Activity", will hold the offenders liable with their property for the damage (loss of profit and moral damage) caused to the state by the ban on Ukrainian grain export to Canada, and will suspend the export license of the commercial entities guilty of the breach of legislation.

As far as I can remember, this is the first serious attempt to regulate the grain market. Should we succeed in carrying it through, the Ministry of Agrarian Policy and other competent authorities will be able celebrate a dual victory, while the violators will lose.

"But who are they? Where are they from?"

"I won't name the companies as we have only just finished the internal investigation. The case has been transferred to the relevant authorities. Wait a little and you will know everything," said Minister of Agrarian Policy Serhiy Ryzhuk. "There is no stopping our advance to the international grain market."

In 2000, Ukraine exported about 1.3 million tons of grain, in 2001 - 5.5 million tons. The estimations for this year are at the level of 10-11 million tons. I want to remind you that at first we were the sixth largest grain manufacturer in the world, then we ranked fifth, and now, according to the export projections, we are going to be the world's third largest grain exporter in 2002-2003 marketing year. Ukraine will adequately react to the cases like this and will take measures to protect its national interests.