The Central Europe Institute reports that in less than three years, the sown area in Ukraine has decreased by over 21 percent, from 28.6 million hectares in 2021 to 22.5 million hectares in 2024. At the same time, the agricultural sector has become a key source of the state’s budget income. Even though the value of exports has decreased, its share in foreign sales income increased from 41 to 61 percent. “Agriculture is key for Ukraine’s survival,” emphasizes Dr. Oksana Kiforenko, PhD in economics, from the Institute of Agricultural and Food Economics – National Research Institute.
“Ukrainian agriculture is going through hard times due to the war currently ongoing in the country. Various estimates show that between 20 and 30 percent of agricultural land has become unfit for farming due to warfare. The structure of agricultural production in Ukraine has changed, showing a decrease in grain production and an increase in livestock production,” says Dr. Oksana Kiforenko to Newseria Biznes agency.
The Russian invasion inflicted record losses on Ukraine’s agricultural sector. A significant number of agriculture and processing businesses, along with granaries, greenhouses, and agricultural machinery, have been destroyed or severely damaged. Data from the Central Europe Institute shows that as a result of partial occupation, land mining, and the blowing up of the water dam in Nova Kakhovka in June 2023, the area of cultivated arable land significantly decreased.
According to a report from the Kiev School of Economics (KSE Agro-center), which is referenced by the Central Europe Institute, total damage and losses in the agricultural sector due to the armed conflict in February 2024 amounted to more than 80 billion dollars.
“Ukraine must develop agriculture to ensure its survival and continuity, and to maintain the necessary resources for local consumption and for export, which brings the inflow of funds essential for the functioning of the country,” the expert assesses.
In 2021, Ukraine obtained almost 41% of its export income from the sale of agri-food products. In 2022 and 2023, this increased to 53% and 61% respectively. The main reasons for this dynamic were the Russian occupation of territories with a large number of industrial enterprises, and the destruction of critical infrastructure, which automatically led to a decrease in production.
However, two years of Russian aggression resulted in a reduction in Ukraine’s income from agri-food exports by 21.3%. In 2023, these accounted for 21.8 billion dollars, compared to 27.7 billion dollars in 2021. Reasons for the decrease included transport issues, restrictions on the supply of certain products to neighbouring countries due to disruptions on the domestic markets, and the suspension of navigation from Ukrainian ports of the Black Sea.
The war changed Ukraine’s export recipients, particularly with regard to wheat. Disruptions to the Black Sea maritime routes caused more exported goods to reach Europe, and less to sub-Saharan Africa or Asia. The IFPRI states that from January 2021 to February 2022, less than 2% of all wheat export from Ukraine reached European markets, whereas after the war broke out, this increased to over half. The share of Middle East and North Africa countries in the wheat export fell from 50% in 2021 to 29% in 2023.
