Andrey Dykun: Ukrainian farmers on the verge of bankruptcy

The conflict between Russia and Ukraine has resulted in significant attacks on Ukraine's grain storage facilities and port infrastructure, impacting the country's agricultural sector and global food security. Since Russia's withdrawal from the Black Sea Grain Initiative in July 18, there have been 17 massive attacks on grain storage facilities, destroying over 300,000 tons of Ukrainian grain and damaging 105 port infrastructure facilities. The Ukrainian Agri Council (UAC) highlighted the global consequences of these attacks, as Ukraine's ports play a crucial role in exporting agricultural products.

The attacks, including the use of kamikaze drones targeting critical infrastructure, aim to create a food crisis in Ukraine and the world. The destruction of grain storage facilities and agricultural enterprises has led to a decrease in grain exports, impacting countries dependent on Ukrainian agricultural products. The UAC emphasized the urgency of supporting Ukraine's agricultural sector to ensure its survival and prevent a humanitarian and economic crisis.

The conflict has also resulted in financial losses for Ukraine's agricultural sector, with direct losses estimated to exceed $3 billion by the end of 2023. The combination of the blockade of the Black Sea, expensive logistics, and rising production costs has led to unprofitability for many agricultural enterprises. The UAC called for international support to address the critical situation facing Ukraine's agricultural sector and mitigate the impact on global food security.

The agricultural sector in Ukraine is facing challenges, with wheat profitability dropping to 1%, and sunflower production becoming unprofitable. Despite favorable weather conditions supporting agricultural production, reduced acreage for winter crops and cost-saving measures by farmers are expected to impact the gross harvest in the coming year. Farmers are cutting costs on fertilizers and machinery, which could lead to a significant decrease in the gross harvest. While the average Ukrainian may have enough food, the issue of exports and foreign exchange earnings for Ukraine is becoming more acute. The situation highlights the economic challenges facing Ukraine's agriculture amid the ongoing conflict and disruptions to the industry.