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‘They will run out of money’: farmers’ fight for survival in Ukraine

Combinations float among gilded barley crops in the Kishchantsi fields, 200 km south of the Ukrainian capital Kyiv, leaving clouds of dust behind. Wheat, rapeseed and vegetables will follow the farmers who will collect the last crops planted in the spring.

Ukraine’s harvest began despite the deepening crisis in one of the world’s largest bread baskets. Russian invasion and The siege of the Black Sea Destroy the agricultural sector in the country, as war damage to infrastructure, rising fuel and fertilizer costs and loss of export routes leave farmers hungry for income and have clear choices.

“If they can’t sell their crop, they’ll just run out of money,” said Cornelis Hosinga, a Dutch farmer who moved there. Ukraine More than 20 years ago and experienced 15,000 acres of land in Kishchantsi in the central Cherkasy region. “They will not have money to buy fuel or pay salaries.”

Ukraine exported 54 million tons of grain Harvesting a record 106 million during the marketing year 2021-2022 that began last July, according to the Ukrainian Grain Association. But the 2022-23 crop is likely to reach nearly 40 percent lower. The UGA warns that exports could dive to just 18 million tonnes without a rapid reopening of the Black Sea route, which will hurt a variety of countries from North Africa to South Asia that depend on Ukraine’s products.

Bohdan Chumyak, a former farmer on the board of GN Terminal, a grain facility in the port of Odessa, said Ukraine’s agricultural sector was “entering zero.” Credit lines will dry up and many farms will break unless the closure ends soon. “It’s going to be a bad year.”

Cornelis Husinga, a Dutch farmer who moved to Ukraine more than 20 years ago © Derek Brower / FT

The financial loss from the blockade already stands at $ 170 million a day, the UGA estimates, pushing many grain shippers and traders to the brink of bankruptcy.

“We use working capital and people would want their capital back and we can do nothing,” Chumyak said. “We’re pretty close to collapsing.”

Many farmers are in even deeper economic distress as domestic demand and low prices are added to the rise in fuel and fertilizer costs.

“The only thing that has saved and is now supporting small commodity makers is lines of credit,” Mikhailo told Zarenko, who runs a 6,000-hectare farm of grain and animal farms near the city of Podilsk, 200 km north of Odessa.

Russian troops have occupied up to a quarter of Ukraine’s 33 million hectares since the invasion began in February. Farmers were killed in fields with unexploded ordnance.

The physical losses to the sector – stolen tractors, looted grain, damaged facilities and croplands damaged by artillery or fire – already total more than $ 4 billion, according to the Kiev School of Economics’ Food and Land Use Research Center.

Map of Ukraine for farmers

However, some farmers continue to harvest. Huge grain fields and one of the most abundant sunflower crops in the world are ripening from the southern Mykolaev region – a fierce fighting site in recent weeks – to the relative calm of the Zhytomyr region west of Kiev.

But the blockage of the Black Sea ports means that farmers may soon run out of places to store their grain and oilseeds. Corn prices fell by half in three months, he told Zarenko, while a slaughterhouse that brought in $ 300 a ton before the war was sold off the field for less than $ 100, Husinga said.

Farmers can use alternative export routes, including transporting grain through dense land crossings to Poland. The terminals of the Danube River near the Romanian border also provided a way out. But transporting grain south to river ports like Ismail could cost at least $ 85 a tonne, more than four times the price of transporting it to Odessa before the war, Husinga said.

Russian missiles destroyed part of the railway to Ismail and attacked a bridge over the route of the road. The canals to the other Danube terminals are shallow, limiting the size of the vessels that can reach them. The queues for loading the barges are long.

“There were cases where farmers and cars… Waited 24 days in ports,” he told Zarenko.

Transporting goods by land or rail and shipping via the Danube may allow for exports of only 1-2 million tonnes per month – well below 6 million tonnes of monthly exports from pre-war seaports, the UGA said, adding that the increased need to stockpile grain could fill the Ukraine’s estimated ventilated storage capacity of 60 million tons by the fall.

With some farmers forced to leave grain outside under improvised covers or in unsuitable workshops, Chumyak said about 15 percent of the crops harvested this year could be spoiled.

Russia’s repeated intent to Ukraine’s main refinery in Kremenchuk has contributed to doubling the price of diesel, the most important fuel for farmers, to 58 hryvnia, or about $ 2 per liter. Fertilizer costs have risen by nearly 40%, analysts estimate, after the loss of potassium and phosphorus imports from Belarus and Russia and artillery damage to local nitrogen production facilities.

A missile in a field near Kyiv
A missile in a field near Kyiv © Maxym Marusenko / NurPhoto / Getty Images

The additional costs add to the burden on farmers, Zarenko said. “Small farmers and those without working capital – it will be difficult for them to survive,” he said, adding that many will have to hand over their leased land to larger farms “so that the land does not stand still.”

But even if the siege is lifted soon, officials in Kiev and marine insurance companies will have to be sure that ships will be guaranteed a safe passage. And the removal of the growing stockpile of stored grain will continue until 2023, analysts said.

In Chisinau, Husinga said Ukraine’s crop next year could be significantly reduced, with farmers assessing whether they could afford to plant crops.

“The guys who have cash reserves can hold out until the next harvest,” the farmer said. “[But] Some farmers say they will not even plant this fall. “

‘They will run out of money’: farmers’ fight for survival in Ukraine Source link ‘They will run out of money’: farmers’ fight for survival in Ukraine

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