22 June 2022, Wednesday, 16:52 368

Indirect Agriculture Losses From War Estimated At USD 23.3 Billion - Agrarian Ministry

Editor: Tetiana Herasimova

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Indirect losses in agriculture due to reduced production, port blockades and rising costs of production factors are estimated at USD 23.3 billion.

This is stated in the message of the Ministry of Agrarian Policy and Food with reference to the Overview of Indirect Losses from the War in Agriculture of Ukraine, jointly prepared with the Center for Food and Land Use Research of the KSE Institute, Ukrainian News Agency reports.

Indirect losses due to lost harvests are estimated at USD 9.6 billion.

The most significant decline in the projected harvest of 2022 is noted for the production of wheat (a 33% decline is expected in the harvest of 2022 compared to the baseline scenario), sunflower (32%) and barley (31%), since a significant part of the production of these crops is located directly in regions suffering from active hostilities and occupation. At the same time, hostilities relatively less affect the corn harvest compared to the harvest of other crops, in particular, the corn harvest is expected to decrease by 18%.

According to calculations, 22% smaller harvest of other crops is expected in 2022 (except for the above), which means additional lost income of USD 3.3 billion.

"However, while annual plant crops can be planted again next year and received a new harvest - a decline in livestock production leads to a decrease in production for several years to come. Consequently, the total losses of the livestock sector are estimated at USD 682 million. Losses due to the smaller harvest of perennial crops amounted to USD 89 million. On average, it will take five years to start fruiting new perennial plantations. Consequently, the loss of perennial plantings over five years will amount to USD 222.4 million," the report says.

Due to the blockade of ports by Russia, Ukraine faced an oversaturation of the domestic market for export-oriented products and an almost quadruple increase in the cost of export logistics. This led to a decrease in domestic prices for major export-oriented crops by more than 30%.

At the same time, indirect losses of producers from lower prices for export-indicative crops (wheat, corn, barley, sunflower) amount to USD 11.9 billion.

Total losses due to increased production costs are estimated at USD 859 million.

As Ukrainian News Agency earlier reported, the total losses from the war in agriculture in Ukraine reached USD 4.3 billion.