Ukraine’s agricultural sector underpins its national economy and global food security. Therefore, the support of the United States (U.S.) for Ukrainian agriculture is a strategic priority. The European Union (EU), meanwhile, has balanced supporting Ukraine with protecting EU agricultural markets.

The Importance of Ukraine’s Agricultural Sector

Ukraine’s agricultural sector employs 14% of its population. Ukraine was the largest global producer of sunflower, the second largest producer of sunflower oil and meal, the sixth for rapeseed and corn and the seventh for wheat. Following an Association Agreement with the EU, agriculture’s share of Ukraine’s exports increased from 27% in 2013 to 41% by 2021, with agricultural exports to the EU accounting for $7.7 billion out of a total of $27.8 billion.

The war in Ukraine has worsened food price inflation and acute global food insecurity, particularly in the Middle East and Africa. An estimated 400 million people in 36 of the 55 food-insecure countries rely on Ukrainian food products. Previously, half of the World Food Programme’s (WFP) grain stock came from Ukraine. The country also supplied a third of the cereal imported into the Middle East and North Africa. Nations like Libya, Pakistan, Yemen and Lebanon import 30% of their wheat from Ukraine, while 45% of wheat imports to East Africa come from the country.

Global food prices and acute food insecurity reached record highs in 2022, partly due to the war’s disruptions of supply chains and the price of fertilizer, food commodities and fuel. This also raises humanitarian assistance costs.

The Extent of Damage Inflicted

Russia has strategically destroyed, damaged and seized farms, food storage facilities, agricultural machinery and irrigation systems. This allows Russia to diminish Ukraine’s income and ability to resist, acquire the nation’s exports and create pressure by provoking food crises. Russia inflicted $10.3 billion in damages to the agricultural sector and $69.8 billion in losses by the end of 2023. Agricultural machinery accounts for 56.7 % of lost value.

Among the seized or lost products are 2.8 million tonnes of grain, 1.2 million tonnes of oilseeds, 124,000 tonnes of fertilizer and 11.6 million liters of fuel. The conflict caused seven million Ukrainians to experience moderate or severe acute food insecurity in September 2023. The regions of Zaporizhya, Kherson and Luhansk suffered the most, with 65% of the total damages. An estimated 7.5% of Ukrainian cropland has been abandoned.

The U.S. Department of Agriculture (USDA) estimates that harvested area is down from 2021 levels for wheat, corn and barley for 2023 are down 32%, 27% and 37%, respectively. Nearly 20% of Ukraine’s storage capacity on its territory is lost.

Global Support

Following Russia’s capture of key ports by May 2022, exports went through Poland, Hungary, Slovakia and Romania by land and river through EU Solidarity Lanes and later via a corridor with Turkey. The high weight-to-value ratio of agricultural products renders transportation by land expensive, reducing the level of grain exported and making sea routes crucial. The U.N.-brokered Black Sea Grain Initiative enabled the export of nearly 33 million metric tons of grains and other agricultural products from July 2022 to July 2023. To further alleviate food security pressures, international sanctions against Russia (and Belarus) exempted agricultural products, including fertilizer.

The EU has also been crucial in supporting Ukraine’s agricultural sector, with 50% of Ukrainian wheat exports going to Europe in February 2022. However, opposition from EU farmers led to restricted grain sales from May 2022 to September 2023. Now, the EU has implemented quotas for Ukrainian agricultural products and emergency breaks for certain products to protect their farmers while also re-exporting grain.

Similarly, the United States Agency for International Development (USAID) Agriculture Resilience Initiative (AGRI-Ukraine) supported the production and export of seeds, fertilizers and agricultural equipment. Investment totaled $350 million in its first year. In July, USAID announced it secured $510 million in private sector and donor investments for Ukraine’s agricultural sector. The program helped 32% of Ukraine’s registered farmers access seeds, fertilizers, crop protection, storage and financing.

Conclusion

Ukraine’s agricultural sector benefited from global economic support, trade reconfiguration and the recovery of some ports. Despite increased production and exports, recovering Ukraine’s agricultural output and income is challenging amid hostilities. However, it is crucial in tempering global food crises and sustaining Ukraine’s resistance effort. The biggest challenges include extensive infrastructure damage, landmine prevalence, trade costs and disruptions and coordination between Ukraine’s government, international actors and the private sector.

– Luke Ravetto

Luke is based in Boston, MA and focuses on Politics for The Borgen Project

Photo: Wikimedia Commons