'A year on since Russia invaded Ukraine and the extent of damage sustained by the agricultural community has been extensive, with shock waves being sent across the world on food security.
Over the past 12 months, Russia had been attempting to undermine Ukraine’s agricultural capacity by targeting key infrastructure including grain silos, railways and ports, and has inflicted more than $6.6bn of agricultural damage – rising to $34bn in indirect losses.
Many livestock farmers across the country have had to abandon their animals in occupied territories, or struggled to find markets for their meat or milk. Cereal farmers have been battling with crippling input costs and blockades to major shipping ports in the Black Sea and around 20% of land can no longer be cultivated due to damage and contamination of land, by mines and ammunition.
The Scottish Farmer spoke with Ukraine’s deputy agricultural minister, Marikiyan Dmytrasevych, to hear how the past year of conflict had taken its toll on farmers there, what support had been made available and to gauge his outlook for the year ahead.
Blockade challenges
During the first week of the invasion, Russia targeted Ukraine’s major trading routes, placing a blockade on their Black Sea ports.
“Ukraine typically exported between 5-7m tonnes of product per month through its seaports, including 95% of our grain exports,” explained Dmytrasevych. “Following the invasion, we were only able to export about 300,000 tonnes of products per month, so we immediately had to pursue new ways to get our products shifted, using land border crossing points with EU countries, which we hadn’t used before.”
By the end of 2022, they had managed to shift 3.3m tonnes of products via these alternative routes – but that had not been a simple task.
Logistical challenges
“Ukraine has different standards of railway to our European neighbours, which caused problems getting product over the border. Not only do we not have enough wagons, but we only have wide ones, which don’t match up with Europe’s smaller wagons,” he told us, explaining that this has meant they have had to unload and reload goods at the border, proving a ‘logistical nightmare’.
“We used to spend $40 per tonne taking grain from farms in Ukraine to the ports, but now farmers are likely to spend $US200 to export goods this way. These extra costs are a lot for farmers to absorb and are hitting, the bottom line of many businesses.
“Some farmers made the decision not to grow crops this year as a result. However, the situation has improved after the UN grain initiative was signed in late November, 2022, which allowed significant volumes of commercial food exports from three key Ukrainian ports in the Black Sea, including Odessa.”
Although logistical pressures for transporting goods has eased a little, Dmytrasevych pointed out that Ukrainian farmers are also facing the same input pressures, experienced by other farmers globally.
Planting efforts reduced
“Lack of fuel and high prices have been other problems and we have had to seek ways to import it to Ukraine, which is costly for farmers. Ahead of the invasion, our farmers had already purchased about 80% of fertiliser and seed materials for 2022, however the real challenge is going to be harvest 2023.
“Fertiliser-use is running five times lower than in other years and coupled with less seed and crop protections, we are going to see poorer quality grain and a reduction in yields.”
Ukraine had a record harvest in 2021, yielding 108m tonnes, however in 2022, due to millions of hectares of land being destroyed or occupied by Russia, only 65m tonnes were recorded and the forecast for 2023 is approximately 45m tonnes.
“At the moment, we have seen a 25% reduction in planting spring crops and inter-crops are down by 40%,” he continued.
“We are facing problems around a low internal wheat price. When farmers sell it, they have no opportunity to cover primary costs and as it is expensive to grow, there is no sense in sowing it.
"We are seeing the same situation with maize, which requires more fertiliser, so is unviable right now.”
During November and December, Russian strikes on Ukrainian energy structure caused major problems for farmers who rely heavily on electricity for their operations and when The SF spoke with Dmytrasevych in late December, diesel generators were expected from Germany in the coming days.
Grain storage concerns
Finding storage capacity to house grain has been a challenge, with close to 10m ha of land under Russian occupation. A solution has involved using grain silos, or ‘grain sleeves’ to temporarily house grain.
“Before the invasion, we had about 70m tonnes of storage capacity, but by the autumn about 10m tonnes were situated in occupied territories and capacity to house a further 5m, were destroyed.
“We made a forecast for this year’s harvest and we understood the deficit would be between 10-15m tonnes, so we co-operated with the UN’s Food and Agriculture Organisation, private donors and partner states and have been able to cover part of this deficit with around 6m tonnes of grain sleeves.”
Soft loans to the tune of $2bn have also been made available to farmers, to help cover some of the rising costs.
“We have been offering low-interest soft loans to farmers and around 25,000 applications have been made,” explained Dmytrasevych. “These loans were made available to everyone – however, we incurred issues with distributing payments to smaller scale farmers in the country.
"Not every farmer could apply for a loan as they didn’t have a credit history or accounting records, which caused problems with the bank.
“When we realised this, we applied to partner states in the European Union and started a programme to distribute grants to smaller farmers and have managed to deliver $1.7bn to smaller farmers looking after up to 100 cows or cultivating land up to 120ha.”
Land mines
Land mines have caused wide-spread destruction across Ukraine and around 25% of farm land is predicted to be either damaged, or wasted due to mines that have been detonated, or lie undiscovered.
“There are huge concerns around the safety of people living in areas where mines are located but also farmers working the land, where mines could yet be discovered," he added.
"This has led to around 25% of land being wasted and where mines have been located, the metal and other properties mean that land can’t be cultivated for around two to three years.”
He said that they were still finding mines in towns and on farms, from the World War II and expected that the clean-up exercise from the Russian invasion could take decades to get on top of and for the land to fully recover.
Global food security
Ukraine is a major agricultural exporter, with around 80% of grains and other food stuffs being sold internationally.
With significant reductions in yield anticipated for 2023, Mr Dmytrasevych pointed out that there would be ramifications for the world market, as scarcity of grain pushes up prices.
“We are a predominantly export nation so reductions in yield shouldn’t undermine our own food security, however, there will be a shortage of grains in the world market.
“Traditionally, Asian and African countries buy a lot of our grain and a reduction in yields will especially be a problem for African countries where families spend more than 40% of family budgets on food,” he explained.
Livestock losses
Over the last year, livestock numbers had fallen by around 25%, with farmers having no choice but to abandon some stock, when their land fell into occupation.
“Following the invasion, many farmers were unable to feed their cattle or milk their dairy herds and those in occupied territories who were able to tend to their stock, had no opportunity to sell their produce,” he said.
When asked whether farmers outside the occupied territories, who had cut back on planting crops due to costs, could instead look to take on livestock, Mr Dmytrasevych replied that it was not an option.
“Farmers can switch from one crop to another, but not to livestock, as this is a completely different business. They can switch from wheat to sunflower oil, as sunflower oil is more expensive and there is sense to export it, or to try to.
"They can also switch to rapeseed oil, which is used to produce fuel in places like Poland or Germany, and it is also more expensive than maize or wheat,” he added.
Staying resilient
Despite countless challenges being thrown at their door, Ukrainian farmers remain hopeful for this season, insisted Mr Dmytrasevych.
“Farmers here want to farm and are asking the government to support them with operational funds for next season. I’m hopeful we will have the same programme that we had in 2022 with soft loans and have already had preliminary discussions with partner governments.”
Concluding with a message for Scottish farmers, and other allies, he said: “The world needs to understand that the best option to stop this world food security issue is to defeat the Russian army in Ukraine, to de-occupy our territories and deblock our seaports.
"We also call for the support of Ukrainian farmers and I know the Scottish Government has supported us a lot, and their help has been really appreciated.”
Ukraine fact file:
• Main crops: wheat, maize, and sunflower oil
• Total agricultural land: 34m ha cultivated
• Average farm size in Ukraine: 1000ha
• Harvest tonnage: 103m tonnes in 2021, 65m tonnes in 2022 and 45m tonnes forecast for 2023
• Agricultural exports: 80% of grains and other agricultural goods exported
• Land impacted by invasion: 5m ha of land destroyed and 10m ha occupied = 20% of total land
• War financial damage: $US6.6bn dollars in agricultural losses (indirect losses – $34bn)
• Support to farmers – $2bn dollars soft loans delivered to 25,000 farmers (talk of extending this to 2023).
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