Ukrainian farmers will plant up to two-thirds less wheat by the end of the year if the country’s main export route remains blocked, which will prolong the global food crisis, his Agriculture Minister predicted.
Mykola Solskyi said farmers would face a financial crisis if the Russian Black Sea blockade was not lifted. Many would not have the cash to pay for seed, fertilizer, herbicide and fuel for winter wheat and would instead grow rapeseed, which is not used in the production of cereals or bread, but has a higher price and has a lower performance, i.e. there would be less transportation.
Russia’s blockade on the Black Sea has affected Ukraine’s grain exports, raising food prices and leaving some of the poorer countries in the Middle East and Africa struggling to secure wheat. Known as the barn of Europe, Ukraine produced a record 33 million tons of grain last year and before the invasion the U.S. Department of Agriculture had planned to export 24 million tons by 2022, almost the same as the US. It is the world’s fifth largest exporter of wheat and accounts for 80% of Lebanon’s imports and is a major supplier to countries such as Somalia, Syria and Libya.
Solskyi told the Financial Times in an interview that a prolonged blockade would deprive farmers of cash flow and “break the financial cycle” of agriculture in Ukraine, causing further falls in exports.
“Farmers will reduce winter planting, wheat and barley by 30 to 60 percent,” he said.
Ukraine is in talks with Russia on an agreement to resume food exports by the Black Sea. But if Ukraine’s ports remain closed next spring, Solskyi said farmers would “drastically slow down” corn planting and grow soybeans and sunflowers, again because of lower yields and higher prices. . Lower wheat and maize production by 2023 would prolong grain shortages worldwide and increase food prices for longer.
Minister of Agriculture Mykola Solskyi © Justin Lane / EPA-EFE
The Russian war has severely affected agriculture in Ukraine, one of the world’s largest exporters of cereals and edible oil. Farmers have struggled with the lack of labor and trucks, unexploded ordnance and mines in their fields, as well as higher prices for fertilizers, herbicides and fuels.
But the biggest problem is the inability to export by sea due to the blockade of the Black Sea. The country exported 54 million tons of grain from 106 million tons harvested last year, according to the Ukrainian Fat Association.
Rail exports are limited because Ukraine and its EU neighbors use different width sizes and there are few transhipment facilities. Alternative road and barge routes on the Danube River account for a fraction of normal shipping, which last year operated between 6 and 7 million tonnes a month. About 20 million tons of Ukrainian grain are stored.
Ukrainian farmers near the front line are in danger of fighting, with Russian artillery causing fires in dry fields © Dmytro Smolyenko / NurPhoto / Reuters
Many countries are struggling with declining wheat imports. BlackRock founder Larry Fink told FT last week that investors underestimated the “geopolitical” ramifications of food inflation.
Solskyi was optimistic about this year’s harvest despite Russian forces occupying between 30% and 40% of Ukrainian farmland, while farmers close to the front line are in danger of fighting, with the l Russian artillery causing fires in dry wheat fields.
Although only 75 percent of Ukraine’s arable land was sown this year, the government expects the total crop harvest to be 10 percent larger than expected a few months ago, at 60 million instead of 55 million tons, thanks to good growing conditions.
Lack of storage was not a critical issue, he said, because farmers could use “ag bags,” or long tubes of plastic silage, to store grain. But the lack of export sales paralyzed them financially. Ukraine has some very large agribusinesses, but 70 percent of its crops are grown on medium-sized farms, he said.
Kyiv should intervene with subsidies to farmers. “In the worst case, the government should open the taps of funding,” he said.
Solskyi said occupation forces have continued to steal large quantities of grain from farmers in the captured territories since Moscow launched its large-scale invasion in February.
Ukrainian officials have said 500,000 tons of grain have been looted. But Solskyi said the actual figure is likely to be much higher, as farmers in areas controlled by southern Russia in Ukraine had already harvested several million tons.
Recommended
The Ukrainian government continued to monitor suspicious shipments and alert the governments of destination countries “where we have doubts” about the origin of the grains.
But he said Ukrainian wheat was also being transported to Russia to turn it into flour and feed, an untraceable stream. “Nothing encourages you more than impunity,” he said of the trade.
Kyiv has accused Russian ally Syria of trading in stolen grain from Ukraine. He suggested that Syria would not have access to Ukraine’s grain exports as punishment when the conflict is resolved.
“In the future we will draw some conclusions about our trade policy for wheat and maize,” he said.