Ukraine’s embattled farmers are left empty-handed as the world faces a food crisis

The total area planted with crops this spring is already expected to be up to 30% smaller than last year because of the fighting, and yields could also fall if farmers aren’t given fuel to apply chemicals and crops can harvest at the right time.

Ukraine was the world’s fourth-largest grain exporter last season, shipping staples like wheat and corn to Africa and the Middle East and supplying half of the grain procured by the United Nations World Food Program for emergency relief.

With Ukraine’s Black Sea ports blocked, grain exports are fast becoming a global problem, and UN Secretary-General Antonio Guterres is trying to broker a deal to restart grain shipments – and calm world food markets.

In the year ended June 2021, Ukraine exported 45 million tons of grain. That had been expected to rise to 65 million after a record harvest late last year, but the war has left around 21 million tonnes in silos in areas it controls as the 2021/22 season draws to a close next month.

And while safety has been the most pressing concern for farmers so far, as tracts of land have been cut off by Russian advances or damaged by shelling, fuel shortages are starting to bite as the next harvest approaches.

“Fuel is by far the biggest issue right now,” said Kees Huizinga, a Dutchman who runs a 15,000-hectare dairy and arable farm in central Ukraine.

SERIOUS SHORTCUTS

Ukrainian farmers consume most of the 1.5 million tons of diesel they use each year, or more than 10% of Ukraine’s annual fuel needs, in the spring season, said Taras Panasiuk, commercial director of service station operator WOG.

Ukraine usually relies on Russia, Belarus and imports from other countries arriving by sea for most of its fuel. For example, last year more than 60% of diesel came from Russia and Belarus, estimates Ukrainian oil products consultancy A-95.

Now Ukraine is being forced to take costly and complex routes to import fuel overland from neighbors like Poland and Romania, although a lack of capacity and bureaucracy have slowed those efforts, Ukraine’s Oil and Gas Association said.

That task has become more daunting as nearby countries face their own diesel shortages, while Russian strikes at the Kremenchuk oil refinery and fuel depots have further squeezed supplies in Ukraine.

A shortage of tanker drivers is also hampering fuel deliveries as many have been recruited to fight, analysts say.

Roman Gorobets, director of FE Astra, which farms about 2,000 hectares in the central Poltava region, said waiting times for diesel deliveries to farms are now two to four weeks.

“Things have gotten worse. We’re facing serious fuel shortages across the country,” he said.

The government has announced contracts to import 300,000 tons of diesel and 120,000 tons of gasoline for May, and the Ukrainian Presidency’s deputy chief of staff Kyrylo Tymoshenko said on Friday that 1,500 tons of fuel had reached a customs post in Lviv in the last 24 hours.

As with other essential materials such as seeds and fertilizers, farmers have largely met their fuel needs by utilizing inventory and exploring alternative supply chains, farmers say.

CUT SHIFT

Farms have also adjusted cultivation schedules. In particular, they have moved away from corn, which is intensively cultivated and can produce bumper crops that could overwhelm Ukraine’s already overcrowded grain elevators.

Instead, they opt more for barley, soybeans, and sunflower seeds because they are cheaper to grow and produce lower volumes post-harvest.

Based on last year’s harvest stocks and current monthly overland exports of around 1-1.5 million tons, only 65% ​​of normal grain storage capacity will be available in July when the winter harvest begins.

Some growers, like Gorobets, whose company completed spring sowing in mid-May, say the biggest threat to Ukrainian agriculture and the global food market is that the next crop cannot be sold.

A shortage of diesel for tractors could still hamper the remainder of the growing season if the conflict continues.

“When you need seed, fertilizer or whatever chemical you need, it’s more of a one-off. Fuel is more stable, you need it all the time,” said Matt Ammermann, StoneX’s commodity risk manager responsible for Eastern Europe.

Huizinga says his dairy and arable farm in central Ukraine has enough fuel to complete sowing but not to cover the harvest that will begin in a few months.

Like other factors of war, the potential impact of fuel shortages on crop production is difficult to predict, and the Ukrainian government has not provided forecasts of crop levels.

For wheat, which was primarily sown as a winter crop before the war, some analysts tentatively expect loss of land to conflict and a shortage of fertilizer and fuel supplies to cut production by 35-40% from a bumper crop of 32 million tons in 2021.

Even with a decline of this magnitude, around 20 million tons would still have to be threshed and transported from July.

Because timing is so important to farming, fuel for machinery can be a deciding factor, said Mike Lee, director of Green Square Agro Consulting, which specializes in crop analysis in the Black Sea region.

“If you don’t have diesel, you can’t drive a tractor, no matter how much fertilizer and seed you have.”

Reuters