Ukraine enjoys agricultural assets which are unrivaled. Strategically located on the Black Sea, Ukraine’s crops have traditionally fulfilled demand worldwide. Before the war, the existing state of affairs seemed to be sufficient with improvement viewed as achievable mainly through incremental steps. With the agriculture sector accounting for 11 percent of the gross domestic product, 20 percent of the labor force, and nearly 40 percent of total exports in pre-war Ukraine, there was little political will to take bold steps which might, in the near term, challenge the status quo.
The pre-war sector focused heavily on producing high volumes of commodity crops to largely be processed elsewhere. Ukraine’s relatively small population compared to their caloric output combined with the numerous challenges faced by foreign investors discouraged significant attempts to capture more value added in Ukraine. The brutal impact of the war on this sector will force a rebuilding which will touch every aspect of the agriculture value chain from rehabilitation of its soil to rebuilding its stock of seeds, fertilizer, and production equipment. Beyond the farmgate, storage facilities need to be replaced and transportation assets across all modes must be rebuilt.
Moreover, Ukraine sits adjacent to the European Union (EU), which has a population of 446 million and a GDP of $16.64 trillion. In the 21st century, growth in demand for certified sustainably grown food and feed, certified organically grown food and feed, and food which allows for source identification back to the farm should remain strong. EU consumers have led the way in putting a premium on foods which meet their high standard demands. Yet to date, Ukrainian agriculture has remained largely absent from participating in this enormous opportunity. If a pivot away, at least in part, from bulk commodities is achieved, it could raise the economic opportunity for all Ukrainian farmers and increase and diversify the sources of high-quality food and feed for the EU.
- Shannon Herzfeld, Senior Advisor, Center for Strategic and International Studies (CSIS)
- Deputy Minister Denys Bashlyk, Digital Development, Digital Transformations and Digitalization, Ministry of Agrarian Policy and Food of Ukraine
- Tymofiy Milovanov, President, Kyiv School of Economics
- Peter Sachse, Division Business Manager CIS, John Deere
- Vasile Varvaroi, General Manager of the Danube Region/Ukraine, Cargill
- Jim Prokopanko, former President and CEO, Mosaic