VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #1556/01 1660653
ZNR UUUUU ZZH
P 150653Z JUN 09
FM AMEMBASSY MOSCOW
TO RUEHRC/USDA FAS WASHDC PRIORITY 5496
RUEHC/SECSTATE WASHDC 3783
INFO RUEHVI/AMEMBASSY VIENNA 4760
RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 5333

UNCLAS MOSCOW 001556 
 
SENSITIVE 
SIPDIS 
 
USDA FAS FOR OCRA/KUYPERS, NENON; OSTA/BEAN, 
HAMILTON, HAXTON; ONA/TING, SALLYARDS 
PASS FSIS DUTROW, HARRIES 
PASS APHIS TANIEWSKI 
STATE FOR EUR/RUS 
STATE PASS USTR FOR CHATTIN, HAFNER, S MURPHY 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD ECON WTO RS
SUBJECT: WORLD GRAIN FORUM IN ST.PETERSBURG 
CONCLUDES WITHOUT DECLARATION 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (SBU) SUMMARY: On June 6-7 the Government of 
the Russian Federation hosted its first World 
Grain Forum in St. Petersburg.  With 
approximately 1,500 representatives from over 40 
countries ranging from Agriculture Ministers to 
grain industry experts the forum focused on the 
role of grain production in global food security. 
Despite the concrete call from the Russians for a 
harmonized grain policy, the forum was more 
conceptual and concluded without any tangible 
declarations. END SUMMARY. 
 
¶2. (SBU) The President of the Russian Federation 
Dmitry Medvedev and First Deputy Prime Minister 
Viktor Zubkov opened the forum on Saturday 
afternoon.  While Minister of Agriculture Yelena 
Skrynnik participated in the plenary with eight 
other panelists, she took second chair to German 
Gref, President and Chairman of the Board of 
Sberbank and previous Russian Minister of 
Economic Trade and Development, who moderated the 
session.  The previous Agriculture Minister, 
Alexei Gordeyev, would never have accepted a 
secondary role to Gref as the two historically 
clashed over agricultural trade policy.  Mr. Gref 
displayed a fluency in English and masterfully 
moderated the 2.5-hour session which President 
Medvedev attended throughout. 
 
¶3. (U) In the President's remarks he identified 
solving the problems in the grain market 
(unstable prices) as the most effective way to 
ensure food security.  The President called for a 
global mechanism to overcome the imbalance in 
supply and demand.  Medvedev declared that, "We 
need to ensure that exporters coordinate their 
programs in order to maintain reasonable prices 
in the grain markets.  In fact, we can consider 
the formation of a new policy on grain production 
and international trade in grain."  In the course 
of the forum Skrynnik repeatedly echoed the need 
for more coordination and voiced her willingness 
to unite grain production policy with Ukraine and 
Kazakhstan and articulated her desire to expand 
Black Sea exports in Asia. 
 
¶4. (SBU) In the breakout sessions that followed, 
neither the Minister of Agriculture from 
Kazakhstan nor the Deputy Minister from Ukraine 
voiced support or opposition to a Black Sea grain 
cartel, however industry representatives were 
extremely skeptical about either countries' 
desire and ability to limit private traders' 
participation in the market.  The opposition to 
any kind of grain reserve (virtual and/or 
physical) was more forceful.  The consensus of 
experts in several breakout sessions was that in- 
kind international grain reserves are impossible 
to manage in practice.  Based on the experiences 
of the 1970's, private traders, leaders of 
international organizations, and academics agreed 
that international mechanisms to coordinate grain 
supply and demand will not work. 
 
¶5. (U) During the breakout session on innovations 
and biotechnology, the Brazilian Minister of 
Agriculture described the benefits of biotech 
crops and the development of biofuel from sugar 
cane molasses.  Other speakers, including the COO 
of Syngenta, professors from the USA and China, 
and the Deputy President of UK's National Farmers 
Union, spoke about the benefits of biotechnology 
and other new technologies for farmers.  U.K.'s 
representative complained that the nature saving 
approach that prevails in the U.K. hampers the 
development of British agriculture. 
 
¶6. (SBU) On Saturday morning, June 6, 
approximately 15 ministers of agriculture 
 
including those from Russia, Brazil, Germany, 
Pakistan, and Turkey and other selected heads of 
delegations attended a meeting and lunch hosted 
by Deputy Prime Minister Zubkov.  They listened 
to a presentation by Wayne Jones of OECD on the 
global economic crisis and its effects on food 
security worldwide which was followed by a 
roundtable discussion led by Mr. Zubkov himself. 
Noticeably absent was any consensus among 
ministers for coordinated policy and market 
intervention.  It was also noteworthy that 
although Minister Skrynnik attended and sat at 
the right hand of Mr. Zubkov, she did not say one 
word during the 1.5 hour meeting.  Skrynnik's 
lack of leadership may be a window into the 
motivations for her appointment and her future 
role in the formation of Russia's agricultural 
policies. 
 
¶7. (U) The U.S. delegation was led by the 
Administrator of the Foreign Agriculture Service 
(FAS), Michael Michener.  In addition to leading 
the delegation, Mr. Michener was invited to be a 
member of the food aid panel where he 
presented the U.S. positions on food aid, 
agricultural development, and biotechnology. 
Other members of the panel included David 
Nabarro, Assistant Secretary General in the 
United Nations; Nicole Menage and Chris Moore of 
the United Nations World Food Program; and Klaus 
Rohland, Country Director for the World Bank in 
Russia.  In response to a question about the 
safety of biotech grain for food aid, Mr. 
Michener stated that it is the responsibility of 
all governments to inform their citizens on the 
science and safety of biotech products, much as 
it is their responsibility to inform on the 
science concerning global climate change. 
 
¶8. (SBU) COMMENT:  The forum may have fallen 
short of its initial ambitions.  It has been a 
long standing goal of the Russian Agriculture 
Ministry to form a global grain cartel, 
effectively expanding its sphere of market 
influence in oil and gas to include grain.  The 
Russians have unsuccessfully proposed "a 
harmonized grain production policy" numerous 
times bilaterally with the U.S., Canadians, and 
others.  However, at the June 2008 G8 meeting, 
President Medvedev seized the opportunity created 
by the global food crisis to propose the idea of 
the grain forum under the guise of food security. 
Currently Russia is the third largest wheat 
exporter and has 20 million hectares of land 
currently laying fallow (11-13 million hectares 
non-marginal).  With substantial investment in 
infrastructure (storage, transportation, and 
ports) and technology, Russia does have the long- 
term potential to rival the U.S. in wheat 
production and exports. END COMMENT 
 
¶9. (U) FAS Administrator Michael Michener has 
cleared this cable. 
 
BEYRLE