When Ukraine Finally Falls, American Bankers will Own the Most Important Pieces
When Ukraine Finally Falls, American Bankers will Own the Most Important Pieces
Exactly What You'd Expect to Happen is Happening
This is now our third article on the Russo-Ukraine War and the general situation surrounding it. The first was on the war being entirely avoidable, and mostly a result of NATO expanding after vowing not to do so,1 pushing Russia to declare war out of desperation in the process, as NATO in the Ukraine is its red line. The second was on Ukrainian interference in American politics, namely the Ukrainian state pushing pro-Hillary messages during the 2015-16 presidential election season2. This third article will explore another aspect of the war: how American vulture capitalists and bankster firms are buying up the most precious asset the Ukraine has: its soil.
Check out the podcast version of this article here:
![[AUDIO] When Ukraine Finally Falls, American Bankers will Own the Most Important Pieces](https://substackcdn.com/image/fetch/w_140,h_140,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-video.s3.amazonaws.com%2Fvideo_upload%2Fpost%2F148306232%2F4e2e3057-62e6-4fc2-abd7-613e74484e70%2Ftranscoded-1725031817.png)
A Brief Explanation of the Importance of the Soil
As you hopefully learned from our essay on Money and Soil, one of the most critical assets a nation has is its soil.3 The only true creators of wealth are improvements in farming, resource extraction, heavy industry, and trade. Everything else is icing on top that redistributes that wealth organically by using the surplus to create luxuries.
The most important of the four base industries is farming. Without food, the rest of the nation, whether engaged in productive employment, service to the state, or something else, can’t eat. Potentially, that can be solved with trade, but only in rare cases is the importation of foodstuffs a total solution or a good one.
In the Ukraine, that is doubly true. Yes, it has heavy industry, but in only a few sectors can a corrupt and backward nation in Eastern Europe compete with the slave labor of the Orient or the high-tech enterprises of the West. One of the few things in which the Ukraine has an advantage is in farming, as it has deep, highly fertile soil present only in a few other spots on Earth. The Re Soil Foundation, describing that miracle soil, noted:4
The secret of fertility is called černozëm, a humus-rich black soil that covers more than 65 percent of the country’s arable land, a new analysis by Turkish public broadcaster TRT notes. This particular soil has attracted the attention of scientists since the 19th century. In a paper published in 1866, Austrian scientist Franz Joseph Ruprecht first revealed that its organic matter consisted of decomposed steppe grasses.
According to FAO estimates, black soil is present on 1.8% of the planet’s land surface. The highest concentrations are found in Eastern Europe, in North American prairies, in Argentina and in Asian steppes. Almost a quarter of the global černozëm is located in Ukraine.
As a reminder, it was the exploitation of this soil and the transportation advances of the second half of the 19th Century that made less fertile farming regions, such as even the most easily arable parts of England, uncompetitive for arable agriculture and decimated the landed elite in the 1880s.5 The formerly unthinkable yields that could come from applying modern agricultural practices to the incredibly fertile soil in the few spots where black soil existed, namely the American Midwest and Russian Empire’s Ukraine, flooded Western Europe with grain brought to them by modern steamships and railroads.
That soil, then, is the one real advantage the Ukrainians have, the one key they have to unlocking wealth and improving. Yes, their coal and coking industry is useful,6 and they have some vestigial heavy industry from the Soviet days. But, generally, that industry is uncompetitive globally, and, in any case, a few steel plants are hardly a differentiating factor, particularly after cluster bombs decimate them.7 Deep mounds of highly fertile soil present on less than 2% of the surface, however, are a very important resource and competitive advantage few others have
As a result, that soil is a precious resource the Ukrainians ought to safeguard, but which foreign firms, funds, and banks have long eyed like wolves. Now, with the Russo-Ukraine war presenting an opportunity, it is a resource up for grabs that those same firms and funds are now are coming for.
The Bankster and Oligarch Problem
Given the exceptional nature of, and thus the importance of, its soil, Ukraine has long attempted to guard it. Particularly, under Article 1 of Ukraine’s Land Act, “land is the prime national asset and is under the special protection of the state.” As a result, it is illegal for any non-citizen or company owned by non-citizens to own Ukrainian farmland; under Article 130, foreign citizens, stateless persons, or foreign legal entities are prohibited from acquiring shares in or being members of companies or organizations that own agricultural land. In fact, for decades after 2001, there was a total moratorium on land sales of agricultural land in the country.8
However, the exigencies of war since the Donestk conflict began in 2014 have meant that corrupt entities, including foreign companies and even the Saudi Arabian pension fund, have managed to gain not just a foothold in Ukrainian agricultural land but also acquire control of a major percentage of it. In fact, according to an independent think tank called the Oakland Institute, such entities have managed to gain control of a massive 28% of the arable Ukrainian land. Describing the issue in a shocking report titled “War and Theft: The Takeover of Ukraine’s Agricultural Land, the Oakland Institute, which is neither a right-leaning think tank nor pro-Russia,9 noted (emphasis added):10
With 33 million hectares of arable land, Ukraine has large swaths of the most fertile farmland in the world. Misguided privatization and corrupt governance since the early 1990s have concentrated land in the hands of a new oligarchic class. Around 4.3 million hectares are under large-scale agriculture, with the bulk, three million hectares, in the hands of just a dozen large agribusiness firms. In addition, according to the government, about five million hectares – the size of two Crimea – have been “stolen” by private interests from the state of Ukraine. The total amount of land controlled by oligarchs, corrupt individuals, and large agribusinesses is thus over nine million hectares, exceeding 28 percent of the country’s arable land. The rest is used by over eight million Ukrainian farmers.
The largest landholders are a mix of oligarchs and a variety of foreign interests – mostly European and North American, including a US-based private equity fund and the sovereign fund of Saudi Arabia. All but one of the ten largest landholding firms are registered overseas, mainly in tax havens such as Cyprus or Luxembourg. Even when run and still largely controlled by an oligarch founder, a number of firms have gone public with Western banks and investment funds now controlling a significant amount of their shares.
The report identifies many prominent investors, including Vanguard Group, Kopernik Global Investors, BNP Asset Management Holding, Goldman Sachs-owned NN Investment Partners Holdings, and Norges Bank Investment Management, which manages Norway’s sovereign wealth fund. A number of large US pension funds, foundations, and university endowments are also invested in Ukrainian land through NCH Capital – a US-based private equity fund, which is the fifth largest landholder in the country.
Most of these firms are substantially indebted to Western financial institutions, in particular the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the International Finance Corporation (IFC) – the private sector arm of the World Bank. Together, these institutions have been major lenders to Ukrainian agribusinesses, with close to US$1.7 billion lent to just six of Ukraine’s largest landholding firms in recent years. Other key lenders are a mix of mainly European and North American financial institutions, both public and private. Not only does this debt gives creditors financial stakes in the operation of the agribusinesses, but also confers a significant level of leverage over them. This was evidenced by the debt restructuring of UkrLandFarming, one of Ukraine’s largest landholders, which involved creditors including the Export-Import agencies of the US, Canada, and Denmark, among others, and led to important organizational changes including layoffs of thousands of workers.
It makes no sense that a country would allow its most precious resource to be controlled by a grab-bag of foreign banks, brokers, and sovereign wealth funds. America allows that to happen, and even allows our most implacable enemies, such as Red China, to own land here.11 However, it makes no sense that a theoretically saner and heritage-minded country would make the same imbecilic decision.
In any case, it is only in a vacuum that such a decision makes no sense. Such a horrid decision is more understandable when viewed in the context of Ukraine’s avoidable but expensive and bloody war. Particularly, the decision to be less strict about land ownership came as part of an agreement over the beleaguered state’s aid requirements and recurrent debt issues. Again according to the Oakland Institute (emphasis added):12
In recent years, Western countries and institutions have provided massive military and economic assistance to Ukraine, which became the top recipient of US foreign aid – marking the first time since the Marshall Plan that a European country holds this top spot. As of December 2022, less than one year into the war, the US has allocated over US$113 billion to Ukraine, including US$65 billion of military aid, which is more than the entire budget of the State Department and USAID globally (US$58 billion).
The report details how Western aid has been conditioned to a drastic structural adjustment program, which includes austerity measures, cuts in social safety nets, and the privatization of key sectors of the economy. A central condition has been the creation of a land market, put into law in 2020 under President Zelenskyy, despite opposition from a majority of Ukrainians fearing that it will exacerbate corruption in the agricultural sector and reinforce its control by powerful interests.
The findings of the report validate this concern, showing that the creation of a land market will likely further increase the amount of agricultural land in the hands of oligarchs and large agribusiness firms. The latter have already started expanding their access to land. Kernel has announced plans to increase its land bank to 700,000 hectares – up from 506,000 hectares in 2021. Similarly, MHP, which currently controls 360,000 hectares of land, seeks to expand its holdings to 550,000 hectares. MHP is also reportedly circumventing restrictions on the purchase of land by asking its employees to buy land and lease it to the company.
Additionally, by supporting large agribusinesses, international financial institutions are in effect subsidizing the concentration of land and an industrial model of agriculture based on the intensive use of synthetic inputs, fossil fuels, and large-scale monocropping – long shown to be environmentally and socially destructive.
The result of the “reforms” demanded by Zelensky’s Western backers is that the state’s already overly burdensome debt is growing even more so, and when the end of the war comes, will likely result in the foreign debt holders pushing for yet more “privatization and liberalization” of Ukrainian landholdings. By “privatization and liberalization,” they mean allowing yet more foreign ownership of the country’s one precious resource, its soil. Such is what the Oakland Institute warned of (emphasis added):13
These concerns are exacerbated by Ukraine’s staggering and growing foreign debt, contracted at the expense of the population’s living conditions as a result of the measures required under the structural adjustment program. Ukraine is now the world’s third-largest debtor to the International Monetary Fund (IMF) and its crippling debt burden will likely result in additional pressure from its creditors, bondholders, and international financial institutions on how post-war reconstruction – estimated to cost US$750 billion – should happen. These powerful actors have already been explicit that they will use their leverage to further privatize the country’s public sector and liberalize its agriculture.
The end of the war should be the moment and opportunity for just the opposite, i.e. the redesign of an economic model no longer dominated by oligarchy and corruption, but where land and resources are controlled by and benefit all Ukrainians. This could form the basis for the transformation of the agricultural sector to make it more democratic and environmentally and socially sustainable. International policy and financial support should be geared towards this transformation, to benefit people and farmers rather than oligarchs and foreign financial interests.
So, while the hope amongst the well-meaning might be that organization and regulation of the Ukrainian agriculture sector, namely who is allowed to own land, might change in the wake of the tragedy of the war for the benefit of the Ukrainian people, quite the opposite appears to be what will happen. In fact, this is already the case. Oligarchs own millions of acres and are unlikely to give them up, and foreign firms, namely private equity groups, American pension funds, and global sovereign wealth funds, are buying up millions of hectares (about 2.4 acres) of Ukrainian land. As the Oakland Institute notes:14
The fifth largest landholder in the country, with 290,749 hectares, is NCH Capital, a US-based private equity firm that invests on behalf of prominent US pension funds, university endowments, and foundations. It operates in Ukraine through the company AgroProsperis.
PIF Saudi, owned by the Sovereign Fund of Saudi Arabia, operates on 228,654 hectares through the Saudi Agriculture and Livestock Investment Company (‘SALIC’) and its subsidiary, Continental Farmers Group.
TNA Corporate Solutions, another US-based firm, is owned by American businessman Nicholas Piazza. It controls 295,624 hectares through several subsidiaries, including Pivden Agro Invest, Podillya Agroproduct, Hetmanske, and Prydniprovske. Most of the land leased by TNA comes from transfers from UkrLandFarming made in recent years.
Further, many of the large firms that own Ukrainian land aren’t just registered abroad for tax reasons. They’re also owned by the usual sort of bankers and private equity funds, with Vanguard and various Limited Liability Partnership (LLP) private equity firms dominating the ownership lists of the publicly traded owners of Ukrainian farmland:
Still, there’s more. One of the foreign firms that controls yet more Ukrainian farmland, a private equity firm named NCH Capital, was one of the key players in Ukrainian financial decisions. For example, its CEO, George Rohr, helped persuade the Ukrainians to agree to the aforementioned reform plan from the IMF in exchange for billions of dollars in loan guarantees from the US government. That reform plan helped liberalize the Ukrainian land ownership rules, and now NCH Capital controls hundreds of thousands of hectares of Ukrainian farmland. Its key investors are various pension plans, insurance companies, and endowment funds:
That NCH Capital-arranged loan is just a drop in the bucket for a country now nearly $150 billion in debt. However, it shows the problem of debtholders and debt facilitators using their position to push for “reform,” by why they largely mean the opportunity to buy or control Ukrainian agricultural land. In fact, throughout the conflict, debt holders have used their leverage over the country, which can’t make interest,15 much less principal payments, to push for what they call land reform. While those calls for reform faced opposition that generally held them up in the years of conflict in the Donbas before the Russo-Ukraine War began, the cost of the Donbas conflict and other issues eventually meant the Ukrainian government gave in. As The Oakland Institute noted (emphasis added):16
[O]n March 31, 2020, Ukraine passed a law legalizing the sale of farmland and lifting the country’s 19-year moratorium on land transactions. Ending the moratorium was part of a series of policy reforms that the IMF conditioned a US$8 billion loan package upon. Faced with a deep economic crisis, an ongoing civil war, and the rapidly escalating COVID-19 pandemic, Ukraine risked plunging into default without the loan package.
…
Since the first year of the land market’s opening after July 2021, 111,307 land deals have been signed, covering 262,679 hectares of land. A longstanding prohibition on foreign individuals and companies buying land in Ukraine remains, although they retain the ability to lease land. The few concessions included in the final version of the bill, however, are inadequate in preventing further consolidation of land ownership. For instance, the ban on foreign or unknown owners from acquiring land would require tracing and enforcement, which are highly unlikely to materialize within the current global economic system where companies and subsidiaries constantly change hands and are financed and owned without transparency. Additionally, the very high level of indebtedness of Ukrainian agribusinesses calls the ban into question. Because a vast number of these agribusinesses’ lenders are Western banks and international financial institutions, in the case of a default, their land and assets would likely be taken over by these creditors, which raises legal and practical questions given the land law prevents foreign entities from purchasing land in the country.
So, while foreign firms have so far been limited to either controlling stakes in the megacompanies that control Ukrainian farmland or, in the case of funds and firms like NCH, leasing it, now a situation is emerging where they might own it. Though they technically can’t buy land, theoretically, they could receive it in the case of a default, and such a default is looking ever more likely.17 In such a situation, it is unlikely that Western governments would allow their pension funds and most influential bankers to be out of pocket, so the US, England, and others would likely pressure the Ukrainian government into allowing such ownership in exchange for allowing a debt default.
The great tragedy, then, is that Ukrainian soldiers are dying in droves to protect land that will be owned by foreign bankers when the war is over. As Oakland Institute Policy Director Frédéric Mousseau put it, “This is a lose-lose situation for Ukrainians. While they are dying to defend their land, financial institutions are insidiously supporting the consolidation of farmland by oligarchs and Western financial interests.”18
The situation is likely to get even worse than it currently looks, given the necessities of rebuilding after the war: vast destruction has occurred, and somewhere in the realm of three-quarters of a trillion dollars, if not far more, will be required for rebuilding. It looks like what the banksters at JP Morgan and BlackRock, amongst other funds and firms, want in exchange for “rebuilding” Ukraine is as much of the country’s vast agricultural wealth as they can gobble up, the resource that has long been the apple of their eye. Such is what Thomas Fazi of UnHerd noted in an article titled “The capitalists are circling over Ukraine,” reporting (emphasis added):19
Two weeks ago, thousands of representatives from businesses and governments from across the world gathered in London to “support Ukraine’s recovery”. But was the gathering of all those Western corporate elites at the Ukraine Recovery Conference entirely altruistic? There are, after all, massive profit opportunities being created by the war.
Last year, the Ukrainian government essentially outsourced the entire post-war “reconstruction” process to BlackRock, the world’s largest asset management firm. They signed an agreement to “provide advisory support for designing an investment framework, with a goal of creating opportunities for both public and private investors to participate in the future reconstruction and recovery of the Ukrainian economy”. In February, J.P. Morgan was brought on board as well.
The two banks will run the Ukraine Development Fund, which aims to raise private investment in projects potentially worth hundreds of billions of dollars across sectors including tech, natural resources, agriculture and health. BlackRock and J.P. Morgan are donating their services, but, as the Financial Times noted, “the work will give them an early look at possible investments in the country”. The opportunities are significant, particularly in the agricultural sector: Ukraine is home to a quarter of the world’s chernozem (“black earth”), an extraordinarily fertile soil, and before the war it was world’s top producer of sunflower meal, oil and seed, and one of the biggest exporters of corn and wheat.
….
After 2014, the West’s economic agenda was stepped up once again. Western multinationals had long had their eyes on Ukraine’s vast agricultural wealth, but a 2001 moratorium on the sale of land to foreigners had always represented an obstacle to unrestrained privatisation. As post-Maidan governments turned again to the IMF for financing, aid was conditioned on a series of land reforms that would finally allow foreign corporations to acquire vast tracts of the country’s farmland. In the 2015 TV series, Servant of the People — which starred Zelenskyy as the fictional president, Goloborodko — the conditions required by the IMF for a new loan are rejected and the Western delegation is expelled. But in reality, things went rather differently. In 2020, Zelenskyy gave in to the IMF’s demands and finally repealed the moratorium.
…
In January this year, addressing the participants of the meeting of the National Association of State Chambers, Zelenskyy described American business as the “locomotive that will once again push forward global economic growth”. No one would blame Zelenskyy for choosing the lesser of two evils here: Western banks over Russian tanks. Yet, the grim fact remains that even if his nation succeeds in repealing the Russian invasion, the future in store for Ukraine is not necessarily one of sovereignty and self-determination but, most likely, one of Western economic tutelage.
On the one hand, that wouldn’t be much of a change from what the Ukraine long was. As Open Democracy noted: “Ukraine was historically known as the granary of the Russian Empire and later the Soviet Union. By the end of the 19th century, companies such as US giant Cargill and Parisian trading house Louis Dreyfus were making their fortunes in the country. They constructed silos, purchased milling companies and built ships to transport cheap Ukrainian grain to growing industrial towns in Britain and France.”20 The situation would be little different now. Again according to Open Democracy, which noted that the Chinese are involved, not just the Americans, British, and Saudis:21
Agriculture in Ukraine happens on a giant scale. Most farming businesses are fully integrated conglomerates owned by billionaire oligarchs, operating their own train networks, fleets of often unmarked trucks and storage facilities around the country.
Ten companies control 71% of the agricultural market in Ukraine, Ukrainian Grain Association (UGA) statistics show. In addition to the Ukrainian oligarchy, multinational corporations such as Archer Daniels Midland (ADM), Bunge, Cargill, Louis Dreyfus, and the Chinese state-owned company COFCO, are all active players.
In recent years, international agro-industrial giants including Cargill and Bunge have invested millions of dollars in increased production capacity in the country. Extremely fertile soils, cheap land and a strategic location between export markets in Europe, China and the Middle East have also put Ukraine in the spotlight of land investors.
So, foreign ownership and exploitation of the soil would be little different from days past when foreigners did much the same thing and turned the Ukraine and its black soil into the granary of Europe.
But, on the other hand, that historical parallel was in the era of the Tsar’s autocracy and the Ukraine’s status as a subservient and outer realm of his vast empire. Now, theoretically, at least, Ukraine is an independent (though reliant on the West) state that controls its own destiny and is organized, at least to some extent, for the benefit of the people rather than one man at the top. That’s a disputable notion, particularly if the oligarchs are substituted for the Tsar and the Globalist American Empire replaces the Russian Empire, but it is still what the Ukrainians and many of their Western backers want to believe.
A mass transfer of ownership of the soil, the Ukraine’s one real resource, from millions of small farmers to a few large companies and the oligarchs, banks, and funds that own them, would not only be a late Republic-style tragedy for the Ukrainian farmers,22 but would show the myth of the modern state to be a lie. It is not independent. It is not operating on behalf of the common man. It is not free from the demands of foreign rulers far away. It is just the granary of a world that wants its grain and cares little about or for its people. That is what the ownership structure outlined in this article, particularly the foreign aspect of it, would show.
A Disastrous War, An Evil Lie
While we are generally against the Russo-Ukraine War, seeing it as an unnecessary expenditure of blood that will end worse than the original peace negotiations would have, we are not against the Ukrainian people. They have long resisted communism and suffered greatly for it, and are brave fighters and people, even if the cause for which they are brave stems from an American lie and NATO expansion.23
On that same note, we have no wish to see their land expropriated by foreign firms so that their government can go deeper into debt, fighting a war that could have been avoided and now should be negotiated to a speedy end. Foreign creditors are circling the country’s rich soil like vultures, hoping the country defaults on its disastrous debts so they can swoop in and seize that which they have long been forbidden from having. That will result in the dispossession of many a Ukrainian farmer, the accession of corporate agriculture and the correspondent depletion of the topsoil,24 and yet more Western meddling in and destruction of a country that simply wants to live free. That is a great shame, and quite unnecessary.
