Food security and agricultural sector of Ukraine during the war

Andriy Yarmak, agricultural market analyst with 30 years of experience, analyzes the information about food surplus in Ukraine.

I do not understand the excessive optimism voiced by some agribusiness experts regarding the large stocks of grain and vegetable oils in Ukraine. They are going as far as to say that stocks are sufficient to feed Ukraine for a few years! Therefore, I want to clarify the real situation with respect to the food security of Ukraine are and what it means for the near future.

1. Stocks of grains and vegetable oils in Ukraine, are now also feeding the russian occupiers, because a lot of these stocks are concentrated in the temporarily occupied territories of the country. The occupiers steal it from farmers to feed their army and to profit.
2. The quality of grains and especially vegetable oils deteriorate during storage. If storage conditions are not optimal, this process would accelerate significantly. As we all know, conditions for storing products are far from optimal in many regions of Ukraine now due to lack of electricity and personnel. Therefore, a large part of this food will be thrown away already in May, when it gets much warmer. What kind of “long-term” stocks are we talking about?!
3. The stocks we have represent a heavy burden for the farmers, instead providing them with the money. After all, farmers must ensure a new production cycle with earned from selling these stocks and the loans obtained from the banks. However, instead of getting the money, farmers are spending the money on trying to store grains, oilseeds and vegoils.
4. Without the sea ports, Ukraine will only be able to export only 10-20% of the grains, oilseeds and vegetable oils at the very optimistic scenario. Even if the war ends now, Ukraine is unlikely to resume exports through ports unto the end of the year. Unfortunately, the infrastructure, including bridges, roads, elevators, railroads, etc. has been destroyed in many regions. Accordingly, farmers who are now heroically preparing for the sowing season with very scares resources also have very grim chances of selling their new crop.
5. I hope that we all understand that it is unreasonable to rejoice in excessive stocks of grains and oils.
6. Let also discuss the diet of Ukrainians. I do not expect anyone to be happy eating only bread and vegetable oil. What about vegetables, fruits, meat, milk, eggs, fish?
7. Livestock business is extremely sensitive to ideal logistics solutions: timely regular supply of veterinarian medicine and services, feed components, maintaining a microclimate in the barns, having access to timely financing, timely sales of finished products for processing, fast logistics of chilled finished products – any failure of the system may result in bankruptcy of the business. In most of the regions of Ukraine livestock business is under a serious threat now, especially in the occupied or surrounded territories with active fighting. Some farmers have already been destroyed.
8. As for the vegetables and fruits, this business is very labor intensive. As of today, more than 3mn people have left Ukraine already. Thus, Ukrainian farmers do not know where to find to work in the fields and orchards already. It is even less clear what will they do when the harvesting time comes. And then the harvest should be quickly exported as fresh produce is a very perishable produce. The risks in this already high risk sector in Ukraine are now much higher than ever.
9. Major share of stocks of onions and other vegetables are in the temporarily occupied areas of the Kherson oblast. They are kept in storages without electricity and, naturally, deteriorate very quickly. Also, the marketing season of early vegetables from plastic greenhouses in the south should begin now. This business “feeds” hundreds of thousands of people in the South, and the products are supplied to all other regions. Needless to say that this business is dead now. The planting of the new crop vegetables in this critically important region may also never happen. The irrigation system is broken by russians, and without it, the south will definitely be left without a crop of vegetables and a large part of the crop of grain and oilseeds!
10. As of the imported fish and fruits, I have nothing good to say. They were mainly supplied through the ports, and it is not clear when imports will be resumed. Therefore, for now, people will have to live without them. And this is a very important element of the country’s food balance.
11. Even in the western regions of Ukraine, there are already some food shortages, because many migrants moved there fleeing from the war and because the supply chain from the Center and South of Ukraine is broken. It is impossible to cover the shortages with imports because the EU did not have major stocks and relies in large on imports. Besides, the EU countries now need to feed additional 3 million Ukrainians, which moved there from the war! Moreover, the entire food system of the EU was set up to accept food imports from Ukraine, and not to export to Ukraine. Therefore, it is impossible to import food from the EU right now! Ukrainian supermarket chains are ready to buy products, but the EU wholesalers simply do not have much availability even at a high price. Thus, Ukraine needs to find a solution and source food somewhere else.
12. Europe does not have the ability to increase food production quickly. This process would take years and would hardly be possible at all because the agricultural area is decreasing,  while environmental standards and limitations are constantly rising.

The main conclusion is that Ukraine does have stocks of the very basic products, but I am far from certain that it is good news, and it certainly does not guarantee Ukraine’s complete food security. Farmers and processors, especially these involved in the production of high value products, are on the verge of bankruptcy, and the threat is growing daily.

If you are a citizen of Ukraine and if you can plant a small garden for yourself this spring, it is worth considering. I am sure that the world will help Ukraine survive this year, but as I have mentioned many times, only the Armed Forces of Ukraine can save the planting campaign this year and the whole agribusiness of Ukraine!