The harvesting campaign is ongoing in Ukraine. This year’s forecasts are bleak. The war with Russia and weather anomalies have led to huge losses for farmers. In the pre-war year 2021, the harvesting campaign brought 86 million tonnes of grain to the country. However, this year, if Ukraine harvests at least 50 million tonnes of grain, it will be a great victory. Owing to the reduction of sown areas, shortage of labour, as well as a lack of fertilisers and a record drought, the industry is in a deep recession. The energy crisis has only aggravated the situation in agriculture. Experts predict famine in Ukraine.
WAR FACTOR
The entire agricultural industry in Ukraine remains in an extremely difficult state today. The largest number of agricultural companies closed down in Ukraine during the war – 1,261 companies for the period from 2022 to the first quarter of 2024 inclusive. Last year too, agricultural companies closed down most often. Among all closed organisations, a record of 15 per cent fell on agro-enterprises. In the first quarter of 2024, the figures deteriorated further and totalled 18 per cent.
The output depends directly on the area sown, but it is still declining. Prior to the war, about 28 million hectares were sown. Now – a little more than 21 million hectares. The front line covers more than 400,000 hectares of agricultural land. Some of the territory is under the control of Russian troops, some lies in the front line, somewhere there are minefields and fortifications.
Apart from that, the problems with grain storage remain. More than 15 per cent of grain storage facilities are lost or damaged today. Therefore, every sixth grain storage facility of the total volume of grain enterprises has suffered damage. Out of 344 objects taken by satellites for assessment, 75 of them were found to have visible damage, according to the press service of the US Department of State, citing a study by the Conflict Observatory, a non-governmental organisation.
LABOUR SHORTAGE
The tightening of the mobilisation law has affected the entire industry. Agriculture is facing a serious labour shortage. This applies to many areas, including animal husbandry. There are almost no men under 60 years of age left in rural areas. First of all, representatives of professions that are in demand in the army, such as tractor drivers, machinists, engineers, as well as veterinarians, are drafted to the war.
On average up to 20 per cent of workers of exclusive specialities are mobilised in large companies, while in small farms sometimes up to 50-60 per cent. Agricultural enterprises have to search for workers among those who will definitely not be taken to war. Hence, they recruit mainly old people and pensioners.
NATURE’S UNPLEASANT SURPRISES
The weather has been a serious challenge for farmers this year. There were frosts in May, while the end of spring and summer in Ukraine turned out to be one of the driest in the last 30 years. The heat wave and drought affected crops in the southern and eastern regions the most. In the northern part of the country, particularly in the Zhytomyr region, spring crops such as corn, soybeans and sunflowers suffered due to hail.
The deputy head of the All-Ukrainian Agrarian Rada, Denys Marchuk, said that weather anomalies may reduce the yield of spring crops by a third: “Losses will be significant. There is no rain… The losses will amount to about 30-35 per cent. This will hit the export potential very hard. Consequently, it will affect the economic condition of farms.” Now farmers fear rains, which can negatively affect the harvest and the quality of grain.
LACK OF FERTILISER
Since the conflict broke out, most of Ukraine’s fertiliser production capacity has been halted due to the fact the plants work with explosive and toxic materials. Those of the production facilities that continue to operate today cannot compensate for the country’s fertiliser shortage.
At the beginning of the year, Ukraine recorded shortages of key fertiliser types. For instance, the supply of urea to agricultural producers for spring field work did not exceed 65 per cent. Traders and large buyers buy up this type of high-performance mineral fertiliser most often, resulting in a shortage of fertilisers, which triggered a rise in prices for these products, leading to unnecessary spending by farmers.
ENERGY CRISIS
Frequent power cuts, tariff hikes this summer and rising fuel and lubricant prices have negatively affected agriculture. The use of diesel generators means additional production costs for farmers. These factors have led to an increase in the prices of manufactured products.
Over the year, butter price increased most of all – by 16.1%, bread (+10.1%), milk (+8.3%) and cheese (+7.8%). Fish price increased by 5.9%. Moreover, the tendencies to price growth are still in place.
BLEAKING PREDICTIONS
Ukraine will face famine. Oleh Soskin, a former adviser to the second President of Ukraine, Leonid Kuchma, made the statement in his YouTube blog. The Ukrainian expert believes that despite poor crop forecasts, grain is being actively sold off, which may eventually lead to a shortage. “It is quite possible that there will be no grain left for food, it is already being actively sold. There will be left for a couple of months or so.”
Oleh Soskin accused the Ukrainian Presidential Property Management Directorate Volodymyr Zelensky of approving the sale of food stocks at the minimum price. According to the expert, with such an approach, the country’s economy is threatened with collapse as early as autumn 2024.
As of today, the economic situation in the country is extremely severe. The sociological service of the Razumkov Centre has published the survey, which shows that one third of the Ukrainian population can only afford food, and every tenth Ukrainian does not have enough money even for food. The survey took place this summer.
The majority of forecasts seem pessimistic. For example, in the last few months the price of flour has increased by 50 per cent. This will lead to the increase in bread prices by at least 20 per cent. Bakers expect supply disruptions. The main thing is that bread should not disappear from the shelves. On the background of general war fatigue, poverty and hunger, the population will be extremely furious, which may lead to various negative scenarios: from political crisis in Ukraine to civil war.
THE ARTICLE IS THE AUTHOR’S SPECULATION AND DOES NOT CLAIM TO BE TRUE. ALL INFORMATION IS TAKEN FROM OPEN SOURCES. THE AUTHOR DOES NOT IMPOSE ANY SUBJECTIVE CONCLUSIONS.
Bill Galston for Head-Post.com
