Ukraine - Stolen fertilizer, destroyed tractors and $40B in losses

26.05.2023 125 views

Ukraine’s agriculture industry has lost more than $40 billion because of Russia’s invasion, according to a report from the Kyiv School of Economics (KSE).

Direct damage estimates amount to $8.7 billion, while indirect losses — including lower production of crops and livestock, as well as logistics disruptions and higher production costs — totaled $31.5 billion.

Nearly $30 billion will be required to cover the needs for reconstruction and recovery of Ukraine’s ag sector, according to the report, which is based on data from the Government of Ukraine, World Bank, United Nations, and the European Union.

“Considering the colossal damages and losses, it is vital to continue supporting Ukraine’s agriculture financially for it to perform at least on a pre-war level,” the report stated.

“This way one of the most important sectors of the Ukrainian economy will be on its way to prosperity, growth and modernization, contributing to Ukraine’s post-war recovery and the global food and nutrition security.”

The largest portion of direct losses is from damaged and destroyed equipment, which accounts for an estimated $4.7 billion. More than 17% of all agricultural machinery and equipment in Ukraine are estimated to be severely damaged and destroyed, according to the report.

Stolen inputs and outputs — including crops, fertilizer and fuel — are estimated to have caused $2 billion in losses for Ukrainian farmers.

Crop losses, at $14.3 billion, make up the largest share of indirect losses — which encompass lost income and additional costs due to war, such as losses of farmland from soil damage and decreases in crop and livestock production. The most substantial production losses are for wheat, which accounts for $2.9 billion, followed by sunflower at $2.5 billion, and corn at $1.7 billion.

Aside from crops, the report estimates Ukraine’s livestock production has eclipsed $1.7 billion in losses.

“The exceptionally high numbers of livestock killed, stolen, and harmed in any way have resulted in shortages of some animal products,” the report stated, noting that eggs and milk alone add up to more than $732 million in losses.

The report also details how much money will be required to get Ukrainian ag back on track over the next decade. Of the estimated $29.7 billion in overall restoration costs, $4.7 billion is needed for replacing damaged farm equipment and machinery, with another $3.6 billion for rebuilding storage capacity and replacing inputs.

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