Image: Adobe Stock
Farmers whose work on Ukraine's fertile land is vital to the country's economy fear losing their livelihoods after Russia this week abandoned a war deal that allowed the safe export of grain across the Black Sea. For Kees Huizinga, who moved from the Netherlands to a farm in central Ukraine in 2003, Moscow's refusal to extend the deal makes his finances, already strained by last year's Russian invasion, look catastrophic. “We have some reserves so we can survive for a month or so, but if we can’t sell it it will be a disaster,” he told Reuters at his 15,000-hectare farm in a village in the green hills and plains. from the Cherkasy region in central Ukraine.
Ukraine is a major exporter of grains and sunflower oil, including to countries in the Middle East and Africa. The deal brokered by the United Nations and Turkey in July 2022 was designed to allow Ukraine to export grain through the Black Sea despite the Russian blockade, and to combat a global food crisis.
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Agricultural exports are crucial to Ukraine's economy, accounting for around 12% of gross domestic product before Russia's invasion in February 2022 and around 60% of all exports. Of the 60,000 tons of produce grown on Huizinga's land last year, 50,000 tons were sent abroad through the grain business.
In total, Ukraine managed to export 33 million tons of agricultural products through the agreement. Huizinga said exporting the same volume of its production will not be possible without the Black Sea initiative which, according to one industry association, was used for up to 90% of Ukraine's agricultural exports before the war.
The Dutchman, who grows seven major crops including wheat and sunflower, estimates the war-related disruption has cost his business between US$$3 and US$6 million in 2022 and could cost another US$6 million this year. He said he was receiving about US$100 a ton for his barley, half the price that Western European farmers would receive, and that his transport costs had increased dramatically.
DREADED CLOSURES
Huizinga, who came to Ukraine from his family's farm near the Dutch city of Groningen, was once forced to take out loans to cover his expenses. “Some farmers who have more reserves will last longer, and farmers who have fewer reserves will probably have to sell or close the business, or give it to someone else,” he said.
The main remaining route for Ukraine's agricultural production is the Danube River, which runs along Ukraine's southwestern border with Romania.
Some of Ukraine's western neighbors have restricted imports of Ukrainian grain under pressure from their farmers, who said they were suffering from the additional competition. Denys Marchuk, deputy head of the Ukrainian Agrarian Council, the country's largest agribusiness organization, estimated that Ukrainian Danube ports could transport up to 3 million tons per month, nowhere near enough to cover their export potential.
Ukraine expects to harvest 44 million tons of grain this year, down from the record harvest of 86 million tons in 2021. One of Huizinga's farm workers, Yuriy, recently took a new crop of barley to storage in Izmail, a southern city where one of the river ports is located.
He said storage operators were surprised to see 2023 barley arriving as they still had a large stockpile of last year's crop that had not yet been shipped.
Both Marchuk and Huizinga believe that grain shipments should continue through the Black Sea, even without Russia's participation in the deal. The UN said ideas are being floated to try to help get Ukrainian grain to global markets. “I think they (Russia) are bluffing, playing poker at a high level and trying to influence Western leaders in some way, and we should not let that happen,” Huizinga said.
Source: agrolink
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