Negative structural changes have occurred in the agricultural industry of Ukraine.
It will take decades to correct the situation.But first, politicians need to end the war.
Even during the war, Ukrainian agricultural enterprises do not stop working. The gardens are maintained, fertilisers and equipment are supplied, and finished products are stored. Photo source: Ministry of Agrarian Policy and Food of Ukraine
The second year of the war in Ukraine is ending. The country’s agriculture has not died and continues to survive. However, economic indicators could not be restored to pre-war levels. The main indicators of Ukrainian agriculture are presented in the table.1
| Production volumes | 2021 | 2022 | 2023* |
| Cereals | 86 | 54 | 61 |
| Oilseeds | 23 | 18 | 21 |
| Sugar beet | 11 | 9 | 12 |
| Meat of all kinds | 3,4 | 3,0 | 3,1 |
| Milk | 8,7 | 7,7 | 7,5 |
| Eggs | 14,1 | 11,6 | 11,0 |
| Export | 2021 | 2022 | 2023* |
| Cereals | 50 | 38 | 43 |
| Oilseeds | 3,8 | 7,9 | 7,4 |
| Vegetable oil | 5,5 | 4,7 | 6,1 |
| *Forecast |
As you can see, the data for 2023 is better than 2022. But these indicators are much worse than in pre-war 2021. Experts note that it is impossible to restore agricultural production until the end of hostilities. Because the industry has undergone negative structural changes.
About a third of businesses have closed. Another 10-20 per cent of enterprises will close in the next six months. That is, 2.5 years after the start of the war, agricultural enterprises will be reduced by half.2
Many agricultural sectors have become unprofitable in Ukraine. For example, it is not profitable to grow a large number of grain crops. Farmers cannot achieve a harvest that guarantees profit. For example, in order to make a profit, the winter wheat harvest must be no less than 6 tons per hectare (2.47 acres). However, average harvest winter wheat 4.76 tons per hectare (2.47 acres). To make a profit, the corn harvest must be 6.75 tons per hectare (2.47 acres). However, average harvest corn 6.74 tons per hectare (2.47 acres). That is, growing wheat and corn has become unprofitable.3
Farming in many parts of the country has become impossible due to mines. Ukraine has become the most mined country in the world! There are so many mines that it is impossible to get rid of them! With the existing technical means and finances, this would take 757 years. That is, the mines will rust and become unusable faster than they will be found and neutralized.4
The state is unable to effectively support agricultural producers. For example. Many Ukrainian agricultural enterprises are forced to independently clear mines from their own fields. Since there is no money, farmers take out loans for this! Specialized loans for mine clearance are issued by Oschadbank. Loans are provided in hryvnia at 3 per cent per annum for up to 3 years. Grace period 12 months. During this period, farmers may not pay the principal amount. Maximum loan size is 150 million hryvnia or US$4.54 million.5
Agriculture is experiencing a financial shortage. The difference between demand and supply of financial resources is US$20 billion. In 2012, this figure was only US$9 billion. In the current situation, banks are in no hurry to finance farmers. Very big risks.6
According to preliminary information, agriculture will become unprofitable this year. The total losses could be about US$6 billion. For comparison, in 2022, the net profit was US$2.35 billion.7
Let’s be honest. There is no light at the end of the tunnel! The situation is so bad that today’s Ukrainians are unlikely to see their country’s agriculture the same. According to experts, it will take several decades to restore Ukraine’s agriculture.8 But even this long restoration will begin only after the end of the war.
Therefore, peace and the end of the war are the most important things that Ukrainian farmers need. This is understood not only by Ukrainians, but also by all friends of Ukraine.
Politicians from the United States, a country that is Ukraine’s main ally, said New Year’s wishes to the Ukrainian people on the pages of Australian Rural & Regional News.
This is what people answered to the question: “What would you wish for the Ukrainian people for 2024?”
“Peace”,
– said West Virginia House of Delegates, Charles Sheedy.
“Victory. Support. Stability”,
– said President of Lake Research Partners, Celinda Lake.
“My wishes peace, full sovereignty and democracy for the Ukrainian people for 2024 and beyond”,
– Assemblywoman Dana Levenberg (95th District of the State of New York).
“My wish for the Ukrainian people is simple – peace. Militarily, no reasonable person believes that the Ukrainian military has the capacity, both in manpower and military technology, to turn back or defeat the Russian army. What’s happening now is a slow bleed of Ukrainian fighters and civilians stuck in the war zone. That being said, a political solution that ends hostilities and stops the unnecessary killing of noncombatants and combatants, alike, would be a welcome opportunity in the coming year. It’s still possible for Ukraine to claim victory – that they stopped the Russian bear – but they are unlikely to rollback Russian gains that occurred as far back as 2014. Like most complex global issues, politics will likely muddy the waters. Zelenskyy has promised victory – but victory has many faces. Hopefully, rational heads will prevail. The Ukrainian people – current and future generations – will benefit through peace”,
– said Owner & President Klink Campaigns, Inc., Matt Klink.
“My wish is for peace and stability for the Ukrainian people next year. I wish for an end to their conflict and continued progress towards democracy and economic prosperity. Also, I wish they will improve relations with their neighboring countries while gaining more support from the international community to achieve it all”,
– said Policy and Law Strategist, Sabrina Newby.
“I wish for the Ukrainian people an end to the war with Russia and that their previous borders are restored and honored”,
– CEO and Founder Capitol City Research, Willis Jones.
We join in these wishes. God bless Ukraine.
References
1. https://biz.nv.ua/markets/dovoennyh-pokazateley-ne-predviditsya-chto-proishodit-v-ukrainskom-apk-itogi-2023-goda-50375061.html
2. https://biz.nv.ua/markets/v-ukraine-uzhe-stalo-nerentabelno-vyrashchivat-zerno-i-kukuruzu-situaciya-v-apk-50371485.html
3. https://zn.ua/ECONOMICS/zhitnitsa-evropy-v-etom-hodu-ubytki-otechestvennoho-ahropromyshlennoho-kompleksa-otsenivajutsja-v-milliardakh.html
4. https://nv.ua/ukraine/events/dlya-razminirovaniya-ukrainy-nuzhno-757-let-novosti-ukrainy-50365419.html
5. https://biz.nv.ua/finance/oshchadbank-zapustil-programmu-dlya-agrariev-vydaet-kredity-na-razminirovanie-poley-50371526.html
6. https://biz.nv.ua/markets/v-ukraine-uzhe-stalo-nerentabelno-vyrashchivat-zerno-i-kukuruzu-situaciya-v-apk-50371485.html
7. https://zn.ua/ECONOMICS/zhitnitsa-evropy-v-etom-hodu-ubytki-otechestvennoho-ahropromyshlennoho-kompleksa-otsenivajutsja-v-milliardakh.html
8. https://zn.ua/ECOLOGY/zemlja-v-ohne-kak-vojna-vlijaet-na-pochvy.html
