FAO preliminary assess war-induced damage to Ukrainian agrifood sector

While russia’s war against Ukraine is ongoing, FAO experts argue that as of April 2022 the damage to Ukrainian agrifood sector is already of an unprecedented scale, both in terms of the impact on the national economy and on global food security.

The total value of capital stock in Ukrainian agriculture (including down- and upstream sectors) is estimated at USD 29 billion. The potential direct damage to agriculture assets can initially be estimated at USD 6.4 billion (this includes destroyed irrigation infrastructure, storage, machinery and other agricultural equipment, in-port infrastructure, greenhouses, field crops, livestock and processing units). Damage caused by war to a country with an agricultural output and exports as significant as that of Ukraine is unparalleled since the Second World War.

There is no comparable precedent of a country at war, whose agricultural sector is of a global significance similar to that of Ukraine. This is due to the facts that Ukrainian agriculture plays a key role in (i) the country’s economy (20-22% of GDP, including upstream and downstream, and 40% of exports revenues) and (ii) as a major exporter of staple crops such as wheat, maize and oilseeds, which have a vital function in ensuring the food security of millions across the globe. Current damage to infrastructure is estimated in the range of USD 68-199 billion and the economy is expected to shrink by 40 percent in 2022. It is estimated that up to 20% of the territory (farmland) of Ukraine may be currently affected, or about 4-5 mln ha of farmland. The regions that have suffered from Russian aggression in proportion to estimated size of the territory include: Zhytomyr (10%), Chernihiv (50%), Sumy (70%), Kharkiv (20%), Luhansk, Donetsk, Zaporizhzhya (50%), Kherson (100%), and Mykolayiv. Overall, 10.5 thousand or 18.6% of all enterprises were identified as located in the regions immediately affected by fighting in Ukraine. Damages are defined as totally or partially destroyed physical assets and stocks, while losses are calculated in terms of forgone output and incomes as a result of the war.

The additional expected economic losses from the war in 2022 are estimated at about USD 22 billion. The damage reported so far has been wide-ranging from the entire food supply chain:

inputs and machinery supply, production, storage, distributions and food retail: • damage and theft of agricultural machinery, equipment (tractors, sprayers, combine harvesters, trucks, etc.) and greenhouses, including damage from mines to agricultural machinery and operators;

• loss of dairy and swine animals due to indiscriminate shelling and/or deliberate killing;

• damage to agricultural research facilities in Southern Ukraine;

• damage to six grain silos;

• theft of grain loaded for exports from the port of Berdyansk,

• damage to vessels waiting to be loaded with grain;

• destroyed food warehouses with poultry meat, meat and vegetables;

• damaged, suspended or limited production at about 16 meat processing facilities; 6 oilseed crushing plants; 12 bakeries; 6 flour millers, 3 milk processors and 6 confectionery producers;

• numerous destroyed and looted food retail stores in all war-affected area that belong to all major retail chains and independent store operators.