The Russian war against Ukraine has caused more than $40 billion in damage to the Ukrainian agricultural sector, according to the World Bank. This includes not only the physical destruction of agricultural land, but also damage to infrastructure such as irrigation systems and food factories.
The country has lost about a fifth of its agricultural land in the eastern Donbas to trench warfare on the alternating fronts and the mutual laying of vast minefields. About a quarter fewer people now work in agriculture, and its share of gross national product has fallen by several percent.
Before the Russian invasion in 2022, Ukraine supplied 50% of grain to the UN World Food Programme, and agriculture contributed 10.9% of Ukraine’s GDP and 17% of employment. Since then, agriculture’s share of GDP has fallen to 8.2%, and the number of people employed in the sector has decreased by 22%, resulting in 2.1 million employees in 2023.
The share of the agricultural sector in the national economy has increased over the past two war years to 62% in 2023, compared to 41% in 2021. Exports consist mainly of cereals and sunflower oil, with Ukraine accounting for 43% of sunflower oil exports worldwide, 19% of rapeseed and 13% of corn.
Nevertheless, a recent study of long-term economic prospects shows that Ukraine is now managing to export more and more of its agricultural products. An international donor conference held in Berlin in June stressed that it is not just a matter of survival in the short term, but that maintaining 'this international breadbasket' is also vital for global food security in the long term.
To address this crisis, the World Bank has launched several initiatives to support the Ukrainian agricultural sector, providing farmers with access to affordable financing and subsidies. This project should mobilize approximately $1.5 billion in working capital.
Furthermore, the Ukrainian government has started negotiations for an additional loan of $700 million from the World Bank. The sector urgently needs investments in processing capacity, modernization of infrastructure and in the areas of logistics and mine clearance to secure the future of agriculture in Ukraine.