The XVI Kazan Summit will go down in history for the BRICS countries convergence on a broad program that includes, among other things, a series of initiatives to support international ‘food security’ as well as the creation of a grain exchange. (1)
1) BRICS, introduction
BRICS is an interstate association formed in 2006 that includes the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People’s Republic of China and the Republic of South Africa. Egypt, Iran, the United Arab Emirates, Saudi Arabia and Ethiopia joined the BRICS on 1 January 2024.
The ‘Partner State’ category was introduced at the BRICS Summit in Johannesburg (2023), to extend dialogue and cooperation. This status was recognized, in Kazan (2024), to 13 countries: Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda Uzbekistan and Vietnam.
1.1) Representativeness and foundations
45% of the planet population and about 37% of its overall GDP (Gross Domestic Product) are now represented by the BRICS countries. They participate in various international organizations and initiatives such as the UN, G20, WTO, Non-Aligned Movement (NAM), Group of 77 (G77), as well as numerous regional associations. (2)
The BRICS strategic partnership is based on three fundamental pillars: politics and security, economics and finance, culture and humanitarian ties. Relations between the partners are built on equality and mutual respect, as well as the principles of openness, pragmatism, solidarity and the rejection of unilateral coercive measures.
2) BRICS, the grain exchange
The BRICS grain exchange, of which Russia is the world’s largest producer, will be gradually extended in a first phase to other food commodities, such as legumes and oilseeds. With the prospect of being subsequently expanded to other important raw materials such as oil, gas and metals.
The exchange ‘will contribute to the formation of fair and predictable price indicators for products and raw materials, considering its special role in ensuring food safety.
The implementation of this initiative will help to protect national markets from negative external interference, speculations and attempts to create an artificial food shortage’, announced Vladimir Putin in his role as president of the country that in 2024 assumed the annual rotating presidency of BRICS.
2.1) Payment systems and reference currencies
Free movement of agricultural inputs and commodities (and not only) has been and is still being hindered also through the exclusion of some countries from the use of the SWIFT payment system. The Kazan Declaration (2024) therefore reaffirms the commitment to ‘strengthen financial cooperation within BRICS’. And on that note:
-recognizes ‘the widespread benefits of faster, lower-cost, more efficient, transparent, secure and inclusive cross-border payment instruments, based on the principle of minimising trade barriers and non-discriminatory access’;
-welcomes the use of local currencies in financial transactions between BRICS countries and their trading partners’;
-encourages ‘the strengthening of correspondent banking networks within the BRICS and the possibility of conducting local currency settlements in line with BRICS Cross-Border Payments Initiative (BCBPI)’. (3)
3) Shared values and commitments. Food security
The final statement of the XVI BRICS Summit in Kazan (Russia, 22-24 October 2024) – in setting out the priorities on ‘economic and financial development cooperation for fair global development’– refers to agri-food production and trade in the following terms. (4) ‘We agree that
–the supply chain resilience and
-the unhindered trade in agriculture, together with
-the national production, are essential to ensure food security [security for all populations ndr] and livelihoods, especially
-for the low income farmers or poor in resources, as well as
-for the developing countries net importers of food products’.(4)
3.1) Equity and resilience, freedom of exchange
‘We recognize the efforts to support small farmers as an important part of the national agricultural system. (…) We reiterate the need to develop a fair agricultural trade system and to implement a ‘resilient and sustainable agriculture’.
We are committed to minimising disruption and promoting rules-based trade in agriculture and fertiliser, in order to ensure a continuous flow of food and production factors essential for agricultural production, which should be exempted from undue restrictive economic measures, incompatible with WTO rules, including those relating to producers and exporters of agricultural products and business services relating to international shipping.
In this regard, we welcome the initiative of the Russian side to establish a grain trading platform (commodities) within the BRICS (the BRICS Grain Exchange) and to develop it subsequently, also extending it to other agricultural sectors’. (4)
3.2) Multilateral cooperation
Multilateral cooperation is essential to limit the risks that arise from geopolitical and geoeconomic fragmentation. The BRICS are therefore committed ‘to intensify efforts in areas of mutual interest including, but not limited to,
-trade, poverty and hunger reduction, sustainable development, including access to energy, water and food, fuels, fertilizers and natural resources, as well as
-mitigation and adaptation to the impacts of climate change, education and health, including prevention, preparedness and response to pandemics’. (5)
3.3) Financing for development
‘Let’s ask developed countries to honour their commitments to financing development and to encourage their cooperation with developing countries in various areas of development, including taxation, debt, trade, official development assistance, technology transfer and reform of the international financial architecture. (6)
‘We recognize the need to address effectively, comprehensively and systematically the debt vulnerability of low- and middle-income countries. One of the tools, among others, to collectively address debt vulnerabilities is the predictable, orderly, timely and coordinated implementation of the G20 Common Debt Framework, with the participation of bilateral official creditors, private creditors and Multilateral Development Banks (MDBs). (7)
3.4) New development bank (NDB)
New Development Bank (NDB) and BRICS Contingent Reserve Arrangement currently have total funds equivalent to $200 billion. The Kazan Declaration (2024):
-recognizes ‘the key role of the New Development Bank (NDB) in infrastructure promotion and the sustainable development of the member countries’, also with regard to the SDGs in UN Agenda 2030;
-supports the NDB ‘in the continuous expansion of local currency financing and in strengthening innovation in investment and financing instruments’, thanks also to the BRICS Interbank Cooperation Mechanism;
-encourages the Bank ‘to follow the principles of the question’, with a fair and non-discriminatory approach, ‘and the leadership of members, the use of innovative financing mechanisms to mobilize funding from diversified sources’;
-approves ‘the initiative to create a new investment platform to leverage the existing institutional infrastructure of the NDB, in order to increase investment flows into BRICS countries and mechanisms in the Global South.’ (8)
4) Brief considerations
Values and commitments above appear to be entirely consistent with the objectives and requests raised by many parties to guarantee ‘food security’ at a global level (9,10,11). Where, as we have seen, the causes of the most serious and recent crises are mainly attributable to:
-dependence on imports of products and production factors, linked to the scarcity of investments in domestic production
-aggregate concentration and abuse of dominant positions on the markets for production factors and food commodities (12,13)
– opaque and dysfunctional nature of grain markets, therefore subject to restrictions and financial speculation (i.e. futures) that are far removed from the actual values of the real economy
– import restrictions and additional duties imposed unilaterally, in contrast with the rules established within the WTO
-unsustainable public debt for many less fortunate countries, which in turn depend on food imports.
It seems plausible that the BRICS model based on cooperation can allow to reach the objectives of ‘food security’ that the different model based on competition has so far distanced. (14)
#Égalité, #PaceTerraDignità
Dario Dongo
Footnotes
(1) Vladimir Soldatkin, Gleb Bryanski. BRICS leaders tout joint finance, trade projects at Russian summit. Reuters, 23.10.24 https://tinyurl.com/4252td5n
(2) BRICS countries are members of regional organizations such as CIS, CSTO, EAEU, SCO, APEC, LAS, GCC, OIC, BIMSTEC, Mercosur, African Union and SADC, among others.
(3) XVI BRICS Summit. Kazan Declaration. Strengthening multilateralism for just global development and security. Kazan, Russian Federation, 23 October 2024 https://tinyurl.com/5n6udu5f See point 73
(4) Kazan Declaration, paragraph 65
(5) Kazan Declaration, paragraph 57
(6) Kazan Declaration, paragraph 58
(7) Kazan Declaration, paragraph 60
(8) Kazan Declaration, points 62,63
(9) Marta Strinati. Rising prices and food crisis in wartime. Behind the scenes in the iPES FOOD report. GIFT (Great Italian Food Trade). 10.5.22
(10) Dario Dongo. From Farm to Fork to Farm to War, the appeal of science for a resilient food strategy. GIFT (Great Italian Food Trade). 22.3.22
(11) Dario Dongo, Iudita Sampalean. Territorial markets and food resilience, iPES FOOD report. GIFT (Great Italian Food Trade). 14.10.24
(12) Dario Dongo. The tentacles of finance on food sovereignty and our food. GIFT (Great Italian Food Trade). 31.3.24
(13) Dario Dongo. Commodity monopolies, Bunge – Viterra. GIFT (Great Italian Food Trade). 17.9.24
(14) Dario Dongo. Malnutrition, a global crisis. SOFI Report 2024. GIFT (Great Italian Food Trade). 31.7.24
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
