Grain Exports from Virgin Lands : Threat or Promise?

With the price of wheat and corn skyrocketing on global markets, farmers in developed countries might rightly question whether developing countries’ grain exports constitute a growing threat to their well-being. This paper discusses grain exporting by two transition countries – Russia and Ukraine – that may be seen as potential competitors to developed country farmers. The paper concludes that in the near term it is unlikely that these two countries will be able to substantially impact world grain markets because of internal problems and government infl uence in agriculture that make these countries unlike market economies which they might potentially compete with. Specifi cally, problems include infrastructure, petty interference by local and regional governments, surprise mandates from the federal government, xenophobia, and basic neglect. While foreign investment might potentially partly dismantle barriers to exports, the impact on the overall market will not be great. Without fundamental changes in how these economies operate, their impact on world grain markets will remain modest for some time to come