Ukraine’s Struggling Farmers on the Brink Amid Global Food Crisis

By Gus Trompiz and Bozorgmehr Sharafedin

PARIS/LONDON – After navigating the spring planting season—sometimes while equipped with bulletproof vests and helmets—farmers in Ukraine are now confronting a significant new hurdle: securing sufficient diesel fuel for the upcoming harvest.

The ongoing conflict with Russia has disrupted fuel supplies just as farmers ramped up their activities for the spring season, resulting in an estimated loss of about 85% of their usual fuel supply since the war began on February 24, according to farmers, fuel distributors, and industry analysts.

This spring, the total area planted with grain is projected to be up to 30% smaller than in the previous year due to the warfare, and yields may also decline if farmers cannot access fuel to apply necessary chemicals and harvest crops in a timely manner.

Previously, Ukraine was the world’s fourth-largest grain exporter, sending vital staples like wheat and maize to regions including Africa and the Middle East, while also providing half of the grain procured by the United Nations’ World Food Programme for emergency assistance.

As Ukraine’s Black Sea ports remain blockaded, the issue of transporting crops is evolving into a global concern. The Secretary-General of the United Nations, Antonio Guterres, is currently working to negotiate a resolution to resume grain shipments and stabilize global food markets.

During the year ending in June 2021, Ukraine exported around 45 million tonnes of grain, with expectations to increase that figure to 65 million following a record harvest at the close of last year. However, the ongoing conflict has left roughly 21 million tonnes trapped in silos within areas controlled by Ukraine as the current harvesting season approaches its conclusion.

While security has been a primary concern for farmers thus far—due to large areas being cut off by advancing Russian forces or damaged by shelling—fuel shortages have begun to loom larger as the next harvest period arrives.

"Fuel is the biggest problem at the moment, more than anything," stated Kees Huizinga, a Dutch national managing a dairy and crop farm of 15,000 hectares in central Ukraine.

SEVERE SHORTAGES

Ukrainian farmers utilize over 1.5 million tonnes of diesel annually—more than 10% of the country’s total fuel demand—primarily during the spring season, according to Taras Panasiuk, commercial director at a petrol station operator. Traditionally, Ukraine relied on fuel imports from Russia and Belarus, which accounted for more than 60% of its diesel supply last year, according to local oil consultancy A-95.

In response to the disruption, Ukraine is now resorting to costly and complicated logistics to import fuel overland from neighboring countries like Poland and Romania. Unfortunately, this process has been hindered by capacity limitations and bureaucratic obstacles, as noted by the Ukrainian Oil and Gas Association.

The situation is further complicated by nearby countries facing their own fuel shortages, compounded by Russian strikes on crucial oil facilities within Ukraine.

Additionally, a shortage of tanker drivers has been reported, as many have been called to serve in the military, adding to the challenges for fuel distribution, according to analysts.

Roman Gorobets, director of a company cultivating around 2,000 hectares in the central Poltava region, noted that the wait for diesel deliveries has extended to two to four weeks. "Things have worsened. We are facing severe fuel shortages all over the country," he said.

To mitigate the crisis, the Ukrainian government announced plans to import 300,000 tonnes of diesel and 120,000 tonnes of petrol for May. Recently, 1,500 tonnes of fuel reportedly reached a customs facility in Lviv in a 24-hour period.

Faced with challenges regarding other essential supplies like seeds and fertilizers, farmers have largely relied on their existing stockpiles and alternative supply chains to meet their fuel needs thus far.

CROP SHIFT

Farmers are also modifying their crop plans, notably moving away from corn—which requires intensive cultivation and could overwhelm already full grain silos—and opting for more cost-effective crops like barley, soybeans, and sunflowers, which yield smaller volumes upon harvest.

Based on remnants from last year’s harvest and monthly exports ranging from 1 to 1.5 million tonnes via land routes, it is expected that only 65% of normal grain storage capacity will be available by July when winter crops commence harvesting.

Some growers, such as Gorobets, whose operations completed spring planting by mid-May, identify the inability to sell the upcoming crop as a significant concern, not only for Ukrainian agriculture but also for the global food market.

Fuel shortages could continue to hinder the growing season if hostilities persist. "If you can obtain seeds, fertilizers, or any required chemicals, that’s generally a one-time issue. Fuel is necessary on a consistent basis," explained Matt Ammermann, a commodity risk manager with expertise in Eastern Europe.

While Huizinga’s farm has enough fuel to finish planting, he worries about securing enough for the looming harvest in just a few months.

Similar to many wartime challenges, the potential impact of fuel shortages on agricultural output remains difficult to predict, and the Ukrainian government has yet to provide harvest volume forecasts.

For wheat—primarily sown before the conflict—some analysts cautiously predict that losses of arable land due to the conflict, alongside declines in fuel and fertilizer supplies, could reduce production by 35-40% from the record 32 million tonnes achieved in 2021. However, even such a reduction would still leave approximately 20 million tonnes that would need to be harvested and transported starting in July.

With the importance of timing in agriculture, the availability of diesel fuel is critical, emphasizing that without it, tractors cannot operate regardless of the availability of fertilizers and seeds.