Kiev- After the industrial sector, agriculture ranks second in importance to the Ukrainian economy, as it generates about 10% of the annual domestic product, and achieves the country's self-sufficiency, which is enhanced by local food industries.
Agricultural sector products represented about 45% of total Ukrainian exports by the end of 2021, bringing about $22.5 billion to the country, the most prominent of which were grain exports (wheat, barley and corn), then oil crops (sunflower seeds). and oil).
As far as the world is concerned, Ukrainian cultivation of grain and oil crops ranked sixth in terms of volume in 2021, represented by exports of 48.3 million tons of grain, including wheat, barley and maize.
At that time the share of Asian countries in total Ukrainian agricultural exports was almost half (48.7%), and the EU's share was about 29%, while Africa got a percentage of about 12.9%, and favoring 5.8%. According to government statistics, the Commonwealth of Independent States.
war disrupts agriculture
At its beginning, the war paralyzed agricultural sector activity in Ukraine by more than 70%, then dropped to 30% after the Russians withdrew from the northern provinces and some eastern and southern provinces.
But the problem was not limited to the issue of land occupation and security, but was limited to export operations, which were suspended due to the blockade imposed by Russia on Ukrainian ports, especially in the Sea of Azov and the Black Sea. The ports were the window for the export of 90% of Ukrainian grain to the world.
Thus, grain export volumes declined from an expected 70 million tons in 2022 to no more than 41 million tons, then to only about 12 million tons in 2023. Because of that, the Ukrainian economy has suffered losses of approximately $31.5 billion since the beginning. of war, including $8.72 billion per year.
Government and international support
All this reflects a rise in grain prices and poses the threat of a global food crisis, which has prompted Kiev and many international parties to take measures to limit the consequences.
After the start of the war on February 24, 2022, the EU announced a “Solidarity Corridor” to export Ukrainian grain through its territory, and in July of the same year, an agreement was reached on a “grain corridor” in the Black Sea. . With Turkish-UN mediation, and then Kiev announced a corridor that it would secure on its own in August 2023.
During the past two years, the government encouraged farmers to work by giving them interest-free loans and exempting them from export duties, and the Europeans also exempted Ukrainian farmers from duties on the basis of the Economic Partnership Agreement between Ukraine and the European Union. Gave. union.
the picture is not pink
But after all these measures the picture was not good. Locally, many agricultural companies avoided working in wartime conditions for a variety of reasons, primarily safety, and others related to increased seed and fuel prices and the bombing of silos. Then in June 2023, the incident of destruction of Kakhovka Dam came to light. Its waters flooded 600 hectares of agricultural land in the south of the country.
As soon as Russia announced its withdrawal from the grain agreement a few weeks later, exports dropped to almost zero and the corridor announced by Kiev on its part did not succeed in compensating them.
differences with europeans
However, what was worst for Ukraine was the controversy over the benefits of grain exports to Europe, which came out openly in 2023, causing many protests and controversies.
The obvious controversy was the dumping of European markets with relatively cheap Ukrainian grain products, which harmed European farmers, especially in Poland, considered one of Kiev's most prominent political, military and financial supporters, as well as Bulgaria, Hungary, Romania and Slovakia.
But the crux of the dispute is much broader than that. Ukrainian economic analyst Ihor Burakovsky explained this to Al Jazeera Net. He said: “Most of our exports of grains and oilseeds through Europe were originally intended for export to Asia, Africa and the Middle East, but they were ultimately bought into the EU.”
Burakovsky continued: “This is due to logistics problems at the border, leading to long periods of congestion in trucks and trains, as well as high prices for transportation outside the EU and pressure from Russia due to a decline in the willingness of native buyers. And due to price fluctuations.”
Burakovsky also pointed to the existence of “dubious practices” within some EU countries, which allowed “some local actors to profit from the sale of Ukrainian grain on local markets to traders and others,” he said.
Ukraine complains to the Europeans
Whatever the reason and who was behind it, the governments of the affected countries imposed a temporary ban on Ukrainian grain in April 2023, and the EU was then forced to adopt it at the European level by September 2023.
While the Ukrainian government responded by filing a complaint with the WTO against Hungary, Poland and Slovakia, who renewed the ban on grain imports from Ukraine despite the EU lifting the ban.
“For example, the solution may seem simple by blocking exports through EU countries, but the Europeans realize that suppressing Ukraine's exports will burden them as a supporting partner,” explains Burakovsky. That Kiev tells them.
He said: “After the war, agriculture became a major source of income rather than industry, and reality has proved that its sector can work effectively, no matter how much it declines. Without agricultural exports, The country will be unable to secure a third of its budget, about $94 billion, and the deficit is already nearly 50%.
He said: “Ukrainians and Europeans are between two fires. Export in its present form is exhausting them, but it will be more difficult to stop. I believe the solution lies in controlling the methods and mechanisms of export , which Kiev has repeatedly asked for,” he said.