Ukrainian agriculture has suffered catastrophic losses due to the war with Russia. However, compensation for these losses does not have clear prospects. This means that the prospects for the recovery of this sector of the economy are in doubt. Despite the fact that Ukrainian agriculture is of great importance for the food security of the world, there are no international protective mechanisms protecting this sector of the economy. In fact, due to the conflict between two states, the population of many other countries may suffer. And these people cannot protect themselves in any way. This makes relevant the question of the need to introduce a special international mechanism for the protection of large food sources.
Before the war, Ukraine was in 17th place in the world in terms of agricultural production. Annual production exceeded US$44 billion1 and export volumes amounted to US$16 billion.2 Ukrainian agricultural products were exported to 190 countries.3 Poor Asian countries were more active in buying Ukrainian products than others.4 Around the world, about 400 million people depend on Ukrainian food.5 But on February 24, 2022, the safety of these people was jeopardised. On this day, Russia’s invasion of Ukraine began. During the first year of hostilities, the Russian army launched 5,000 missile and 3,500 air strikes on Ukraine.6 And due to attacks by the Russian army, almost a quarter of the country’s territory was captured.
The war caused catastrophic losses to Ukrainian agriculture. During the first year of the war, losses amounted to about US$40 billion.7 About 110 thousand units of agricultural equipment were destroyed. Granaries with a total volume of 8.2 million tons were destroyed.8 Five hundred thousand pigs, 95,000 goats and sheep, 400,000 bee colonies and 212,000 cattle died.9 The fighting destroyed 12,355,269 acres of farmland.10
The fighting continues. But the Ukrainian government and the governments of countries that are allies of Ukraine are already supporting Ukrainian farmers. Since the beginning of the war, the Ukrainian government has made several initiatives to improve agricultural performance. These include:
- exemption from import duties on goods used to ensure the storage of grains and oilseeds;
- simplification of the procedure for registering agricultural machinery;
- changes to the Land Code;
- non-repayable grants for the creation of greenhouses and gardens;
- grants for the development of processing enterprises;
- loans available at 5-7-9 per cent.11
Foreign countries also help. The United States provides a large amount of assistance. The American government, as part of the AGRI-Ukraine initiative, provided Ukraine with US$350 million to support agriculture.12 The UN also supports Ukrainian farmers. The Food and Agriculture Organization (FAO) provided seeds and cash assistance to 30,000 farming families.13 The EU also helps. For example, from March 2023, farmers in four regions of Ukraine can receive grants in the amount of up to US$25 thousand.14 This is not a complete list of support measures. However, all this is done to support today’s work Ukrainian agriculture. In the near future, it is necessary to think about how to compensate for the gigantic losses from the destruction of agricultural infrastructure. And this amount is measured in tens of billions of dollars.
Experts from the United States, the country that provides the greatest assistance to Ukraine, spoke about possible measures of political support. Australian Rural & Regional News asked them one question: What political decisions can be made by the USA governments to compensate for Ukraine’s losses from the Russian invasion?
Willis Jones, CEO and Founder, Capitol City Research:
“Congress has already appropriated several billion dollars to compensate Ukraine for their losses from the Russian invasion, as well as supplying the Ukrainians weapons, ammunition and other needed supplies to thwart the Russian invasion. The political decisions to continue to help Ukraine, however, have been made harder with some in Congress complaining about how we’re not doing enough to stop illegal immigrants from coming across our southern border, and that we need to take care of things domestically, such as housing homeless veterans and paying down our national debt, before spending more money in Ukraine.”
Sabrina Newby, Policy and Law Strategist:
“The US Government could work with its allies to provide humanitarian and economic aid to Ukraine. As well as impose targeted sanctions on Russia, support Ukraine’s territorial integrity, and help refugees and those internally displaced. Lastly, the US could utilise diplomatic channels to advocate for Ukraine’s interests in the international arena.”
Matt Klink, Owner and President, Klink Campaigns, Inc.:
“At present, Congressional and US public opinion is divided on additional funding for Ukraine, less so on providing direct military equipment to Ukrainian armed forces but definitely so on providing non-military assistance to the country.
Many Americans were surprised at the levels of non-lethal aid that the US taxpayer is giving to Ukraine’s small businesses, agricultural subsidies and other social benefits. Such aid is controversial because America has significant domestic problems coupled with a massive (and growing) federal debt that tops US$33 trillion. The Hamas-Israel war compounds this situation.
It has become pretty evident that while Ukrainian President Zelensky talks about ‘winning’ the war against Russia, he doesn’t have the manpower to achieve that goal any time in the future. Now that the war is entering its 20th month, efforts to bring peace to the region need to take hold. Once Ukraine and Russia are no longer at war, world powers will need to put together an aid package to rebuild the country.
But, US domestic politics in a presidential year will make substantial US participation highly charged by both Republicans and Democrats. European countries will need to take the lead in efforts to rebuild Ukraine.”
Conclusion
As we can see, experts do not see opportunities to improve the situation only through the efforts of the United States. Experts talk about the need for international efforts. Professionals also talk about the need to end hostilities. Only after this is it possible to begin restoring Ukraine’s agriculture.
In the current situation, it becomes clear that countries that are large food producers need an international mechanism for compensation for losses due to force majeure, including wars. This requires pre-concentrated financial, technological and labour reserves. This mechanism should work regardless of the political situation. How, for example, does international assistance work for countries affected by earthquakes, epidemics or tsunamis? Also, the largest countries that produce food should be recognised as places where military operations are prohibited. This can be greatly facilitated by the neutral status of these states. If this is not done, farmers in such countries may become victims of war without any opportunity to restore their lost business. Hundreds of millions of people in other countries will suffer because of this. Indeed, unlike the military-industrial complex, agriculture does not earn money, but receives losses in the war. The need to recognise agricultural countries as the value of all humanity and give these countries a special status is the main theme that the war in Ukraine can teach the world’s farmers.
References
1. https://arr.news/2023/10/27/events-in-ukraine-the-first-agricultural-war-has-begun/
2. https://agroportal.ua/ru/news/ukraina/ukrajina-eksportuvala-prodovolstva-na-16-mlrd
3. https://elevatorist.com/blog/read/278-eksport-zernovyih-minagropolitiki-otkryivaet-okna-v-mir
4. https://www.epravda.com.ua/rus/news/2020/02/18/657195/
5. https://visitukraine.today/ru/blog/1827/comu-ukrainske-zerno-nadzvicaino-vazlive-dlya-usyogo-svitu
6. https://delo.ua/politics/rik-masstabnoyi-viini-yakix-zbitkiv-zavdala-viiskova-agresiya-rf-ta-yak-ukrayina-planuje-vidnovlyuvati-krayinu-vze-u-2023-roci-410318/
7. https://delo.ua/ru/agro/ubytki-v-selskom-xozyaistve-ukrainy-iz-za-voiny-prevysili-40-mlrd-issledovanie-417875/
8. https://delo.ua/ru/agro/v-ukraine-podscitali-summu-ushherba-agrosektoru-i-zemelnym-resursam-ukrainy-ot-voiny-415438/
9. https://agroportal.ua/ru/news/finansy/nazvano-sumu-zbitkiv-agrosektoru-ukrajini-vid-viyni
10. https://www.epravda.com.ua/rus/news/2023/03/3/697637/
11. https://jurliga.ligazakon.net/ru/analitycs/213396_podderzhka-agrarnogo-sektora-v-usloviyakh-voennogo-polozheniya-chto-sleduet-znat
12. https://hromadske.ua/ru/posts/ssha-okazyvayut-dollar250-mln-pomoshi-selskomu-hozyajstvu-ukrainy
13. https://news.un.org/ru/story/2023/03/1438547
14. https://thepage.ua/news/es-predostavit-dollar155-mln-pomoshi-ukrainskim-agrariyam
