Almost €10 billion is needed in the immediate and short term to recover and reconstruct the agriculture sector in Ukraine, as aggregate losses have reached just under €28 billion, a report has found.
Lower farmgate prices of export-oriented commodities such as wheat, barley, corn and sunflower seeds accounted for over half of total losses (54%), followed by lower crop production (40%).
The Rapid Damage and Needs Assessment report by the Ukrainian government, the European Commission and the World Bank states that the total cost of the war for Ukrainian agriculture is estimated to exceed €30 billion.
As of June 1, 2022, the war in Ukraine has resulted in total damage of over €2 billion for the agriculture sector including destruction of machinery, storage facilities, livestock and perennial crops.
The losses from mines on agricultural land is not included in the agriculture sector figures. It is estimated that 13% of Ukraine’s territory is contaminated, with land decontamination, which covers demining, costs likely to exceed €72 billion.
The total reconstruction and recovery needs from the public sector are estimated at €18.5 billion, including €8.6 billion which is needed in the medium to long term, the report found.
Private farmers in Ukraine will have to invest considerably more in terms of their own resources over the next years, according to the Rapid Damage and Needs Assessment report.
The Russian invasion of Ukraine resulted in a 20% decline in total planting area compared to 2021, and 15% of agricultural capital stock was already damaged after the first three months.
Grain and oilseed harvests are projected to decline by 40% in 2022 on a year-on year basis, the report found.
Ukraine
The current cost of total reconstruction and recovery of Ukraine amounts to €349 billion, which is expected to increase over the coming months as the war continues, according to the report.
Physical damage from the war sustained between February 24 and June 1, 2022 reached over €97 billion, with damage particularly high in the housing, transport, commerce and industry sectors.
Over the next 36 months, €105 billion is needed to restore education and health systems; infrastructure; heating and energy supply to homes; support for agriculture; and repair of vital transport routes.
“The Russian invasion of Ukraine continues to exact a terrible toll, from significant civilian casualties and the displacement of millions of people to the widespread destruction of homes, businesses, social institutions and economic activity.
“The report will help in identifying priorities for recovery while we continue to support the continuation of essential core services,” World Bank regional vice-president for Europe and Central Asia, Anna Bjerde said.