Putin’s formidable strategy to make French agriculture dependent – ​​L’Express

On the one hand, there is the freezing of diplomatic relations. The political chin-jerks, the escalation of economic retaliation. And then, the raw and shifting reality of business. Business is a soft matter, permeable to the hot and cold of geopolitics. Since the start of the war in Ukraine, the course of trade between France and Russia has never really dried up. If the river of major contracts has dried up, there remains the multitude of small streams that flow to the sea. The port of La Rochelle, one of the largest cereal infrastructures in France, perfectly embodies this gray area, where, in a completely legal way, economic pragmatism prevails over the stiffness of official speeches.

Every day, gigantic bulk carriers wait patiently on the horizon, waiting for the order to approach and sail alongside the oil terminal, enter the Saint-Marc cove and then dock along the vast Lombard quay. There, the acrobatic ballet of the cranes can begin. They have to load and unload, swallow and spit out, empty and fill the immense silos. Wheat, corn, barley, soybeans… Since March 2022, nothing has really changed. Except that a few more ships flying the Russian flag are entering the port, their holds full of fertilizers. Nitrogen fertilizers, phosphate fertilizers, potash, urea, thousands of tons of chemicals with barbaric names, NKP, KP, manufactured in Russian factories. Tons of granules which will then be packaged in 600 kilo bags and will end their life spread on the rich cereal plains of Beauce or Champagne.

How many more Russian bulk carriers are arriving in La Rochelle each month? “There is nothing illegal, we are not circumventing any sanctions,” Sarah Boursier, the spokesperson for the commercial port, replies curtly. We will not learn more. The same word is locked in the port of Rouen or that of Bayonne. It is difficult to admit that France, this agricultural giant, is today living on a drip of Russian fertilizers. To illustrate the phenomenon, we will be satisfied with the raw import figures collected by the customs services. Since the outbreak of war two and a half years ago, French purchases of fertilizers from Russia have increased by 86%, all categories combined: 402,000 tons in 2021; 750,000 tonnes in 2023. “And the reality is probably closer to a million tonnes if we add the fertilisers arriving in Belgian ports and which quietly cross the border every day”, points out Jacques Fourmanoir, the vice-president of Unifa, the French Union of Fertiliser and Fertiliser Producers. This year, the flow would have even increased further. A worrying situation, they whisper at the FNSEA, the leading agricultural union.

“We are putting ourselves in the Kremlin’s hands”

At the European level, the Russian conquest is even more significant: a jump of 115% since the start of the war, so much so that the share of Russian “inputs” in the total fertilizers consumed by European farmers would now reach 30%… compared to only 20% two and a half years ago. Raw materials essential to large-scale crops, argues the European fertilizer lobby. Without them, yields would fall by almost a third; or even by half on certain soils and for certain cereals. 1 ton of European wheat in 7 would now be cultivated using Russian fertilizers. “Since Covid and the shock of the war in Ukraine, all we have to say is the word ‘sovereignty’. And yet, quietly, we are putting ourselves in the hands of Moscow and the Kremlin,” complains Antoine Hoxha, the president of Fertilizers Europe, the continental union of fertilizer producers. As if we had learned nothing from the gas affair. As if we were quietly moving from one dependency to another. “This era when Europe bought its energy and fertilizers from Russia […] is over,” Emmanuel Macron nevertheless said on April 25, during his speech on Europe at the Sorbonne. A curious denial of reality. Collectively, European countries have preferred the cold to hunger. Foodstuffs, and in particular fertilizers, have never been included by the European Union on the list of products under sanctions.

The reasons for this tidal wave can also be explained by budgetary reasons. Nitrogen fertilizers – the most used by farmers – are produced mainly from ammonia obtained from natural gas, the price of which represents nearly 80% of a ton of ammonia. Ultimately, in a ton of fertilizer, the price of gas accounts for almost two-thirds. But Russia has gas to spare, at ultra-competitive prices for its national manufacturers. Even more so since the Europeans decided to drastically reduce their purchases. “Russian groups have production costs that we will never be able to reach,” observes, crestfallen, Renaud Bernardi, the general manager of the French branch of LAT Nitrogen, the second largest European fertilizer producer. So, since the start of the war in Ukraine, European factories have reduced their production rates, some have closed down altogether. Like that of Yara International near Montoir-de-Bretagne (Loire-Atlantique) which closed its doors for good in the spring. “We are in a state of absolute emergency,” worries Nicolas Broutin, the president of Yara France. “In Europe, we have the highest production costs in the world.”

As a result of a carefully considered strategy, Russian groups are unloading their pellets in European ports at prices 10 to 15% lower. They are finding buyers in the process. The European Union has certainly imposed customs duties on all foreign fertilizers and anti-dumping taxes on Russian products – and also American ones – to protect European companies. But the arsenal is insufficient to close the gap. In this game, the Russians have a head start, impossible to catch up. “This year, we had to stop production lines at certain times because we did not have enough demand at the price at which we are forced to value our fertilizers,” continues Renaud Bernardi.

“It’s like funding Putin’s war effort”

Farmers, for their part, watch the trains go by, forced to pay up front for a raw material that is essential to their survival. It is a long cavalcade. Tons of pellets pass from hand to hand, from Russian manufacturers to European traders, then to the purchasing centers of the large cooperatives that resell them to the smaller cooperatives and at the end of the chain to the cereal growers. The latter do their accounts. At the beginning of autumn, they are not good. Harvest in free fall, wheat prices at rock bottom. Damien Brunelle, a cereal grower established since 1998 on a hundred hectares near Saint-Quentin, in Hauts-de-France, is counting on a collapse of nearly 20% of his turnover this year. “The problem is that we are caught in a pincer movement. On one side, the Russians are baiting us with their fertilizers and, on the other, the Ukrainians are stealing our markets with their wheat that they grow almost half the price of ours. I am disgusted,” says this fifty-something. A simmering anger that pushes some farmers to see themselves as the turkeys in a farce that is beyond them. “In fact, it is as if we were financing Putin’s war effort,” comments, disillusioned, the boss of a group specializing in fertilizers.

Its Russian competitors, and in particular the two giants, EuroChem and PhosAgro, are rubbing their hands. Their prosperity is trickling down to their owners: Andrey Melnichenko, for EuroChem, and Andrey Guryev for PhosAgro, two billionaires placed under sanctions from the start of the invasion of Ukraine due to their proximity to the Kremlin. Both have resigned from their positions as operational bosses, without giving up their companies. In a video interview available on the EuroChem website and conducted in El Salvador by the American journalist and conspiracy theorist Tucker Carlson, we see Melnichenko complaining about the freezing of his assets. In the spring of 2022, the Italian authorities seized his toy, a 119-meter-long three-masted ship, estimated at nearly $250 million. He can sleep easy, however. Ranked 103rd among the world’s richest people by the American magazine Forbes, he saw his wealth climb from $11 billion in 2022 to $21 billion two years later. An identical fate for Andrey Guryev, who owns with his family almost half of PhosAgro. Owner of Witanhurst, the largest London mansion after Buckingham Palace, he is ranked 263rd worldwide in the ranking Forbes and his fortune has almost doubled in the last two years.

In France, this Russian group still has a good reputation. But through a sleight of hand, PhosAgros has transformed itself into Purefert, a company based near Bayonne and responsible for marketing PhosAgros fertilizers, in particular. “We no longer have any capital ties with PhosAgro since the special operation or the war in Ukraine, call it what you want. And if Russian fertilizers sell well, it is probably because they are of better quality than their European competitors,” a company manager tells us. It is impossible, however, to know the identity of the new shareholder. We have just discovered that the parent company of Purefert is domiciled in Limassol, Cyprus, the backyard of Russian business in Europe, and that the financial accounts for the year 2023 were approved by Elena Pugachevskaya Christodoulou, “acting as sole partner and president of the company Purefert.” Behind this front man, the opacity of Cypriot cuisine. Although the Guryev family is officially no longer in charge of the company, it has not left the game. Last June, Andrey’s son was elected for the fifth consecutive time to head the Russian fertilizer manufacturers’ union. In the Moscow press, he detailed the country’s ambitions, displaying a production target of 70 million tons within five years compared to 58 million this year, already a record year. “Their strategy is clear: continue to weaken us by taking market share while significantly increasing the production capacity of their factories in Russia. One way or another, Moscow will continue to export its gas to us, but in a different form,” summarizes Jacques Fourmanoir.

Towards green fertilizers

So how can we detox and break the thread of dependency? In the short term, by diversifying our sources of supply. All fertilizers from abroad are taxed with customs duties of up to 6.5%. “It would be enough to eliminate them for certain countries, such as Morocco, Egypt, Algeria or the United States, in order to dilute the Russian market share,” suggests Yohan Merieau, CEO of FertiLine, the fertilizer subsidiary of InVivo. In the longer term, by producing green and European, respond others who have embarked on the decarbonization of their installations. Clearly, tomorrow there will be no question of accepting foreign gas to manufacture nitrogen fertilizers, but only electricity.

InVivo, the largest cooperative structure in France, which alone accounts for nearly 20% of the market, has concocted its own project. Objective? A production capacity of nearly 500,000 tons of green fertilizers made in France. Problem: it takes 2 terawatts of electricity to run it. “Low-carbon fertilizers will require a considerable increase in the power of electrical installations,” anticipates Yohan Merieau. A conversion that worries farmers. “At what prices will these new green fertilizers arrive on the market? We can’t buy at any price,” sighs Damien Brunelle. When the quest for sovereignty is shattered on the altar of competitiveness.