A year ago, the world was shocked by the Russian invasion of Ukraine. Now 12 months on, and the country is still fighting Russian troops with all its own resources and those it gets from friendly nations. The damage is great, also in agriculture. But the determination of Ukrainians is unprecedented.
February 24 marks one year since Russia invaded Ukraine. A year in which the agricultural production and exports of Europe’s granary, according to estimates by the EU and the FAO, have suffered a major blow. The production of arable crops in the 2022-23 season is estimated at 55 million tons compared to 90 million tons a year earlier. Exports are expected to plummet by another 50 million tons in 2021-22 (estimate) to just 30 million tons (forecast) in 2022-23.
Until the Russian invasion, Ukraine was a global superpower, especially in the export of sunflower oil, barley, maize and wheat with 50, 18, 16 and 12% share in global exports respectively. But due to blockades, bombardments and occupations of important ports on the Black Sea and rivers in eastern Ukraine, exports came to a halt. In order to get as much grain out of the country as possible, the UN launched the grain initiative in July last year. Grain was transported to Turkey from 3 ports on the Black Sea. On 17 January 2023, more than 17 million tons of grain and other foodstuffs had been exported via this grain corridor.
New export corridors
In addition to the UN action, the EU quickly provided extra ships and trucks last year, more mobile grain loaders for terminals at the border and more grain storage capacity in the EU. For the medium term, work is underway on what are referred to as new export corridors. New ways to get agricultural products out of Ukraine by road, rail or water.
At the end of last year, the FAO announced that it would support Ukraine for a total of €192 million this year. The largest part (€93.6 million) goes to 500,000 households in rural areas near the front line. Ukraine has large farms, but there are also many small businesses that are mainly self-sufficient. To prevent them from becoming dependent on food aid, the FAO wants to provide them with seeds, fertilisers (arable farming) and feed, temporary stables and veterinary medicines (livestock farming). €79.6 million will be earmarked for, for example, the supply of generators and temporary grain storage in the form of plastic hoses, which are mainly used in the Netherlands for the storage of feed.
The remaining €18.8 million will be spent on setting up more alternative export routes, veterinary support and clearing farmland.
Drop in purchasing power
René Kremers, director of trading and consultancy with Difco in the Netherlands, is in Ukraine. Difco delivers supplies for dairy farming in particular, from semen to management programs. According to Kremers, a large part of Ukraine continues to operate, from Ternopil, about 500 kilometres west of Kiev. “The war is raging mainly in the East, but it has been since 2014. Although it is now more intense there with more victims.”
The way for Ukraine is Europe, period!
In the rest of Ukraine, he says, the impact of the war is mainly noticeable due to the inadequate power supply and the sharp drop in purchasing power. “Many companies and restaurants, for example, now have a generator here. But that of course costs a fortune.” This is partly the cause of the sharp drop in purchasing power, as a result of which the milk price in Western Ukraine, for example, is still only a meagre 30 cents per kilo, according to Kremers.
Kremers is very confident about the future of Ukraine: “The road for Ukraine is Europe, period! That political decision has been made and will not be reversed.”