To restore the agricultural sector after the victory it is necessary to develop the creation of added value — Andriy Dykun


SAVE UA Charitable Foundation, several major agricultural associations: Ukranian Agrarian Council (UAC), Association of Milk Producers (AMP), Association 'Ukranian Pig Breeders', together with the international association DLG initiated a partnership fundraising campaign within the framework of the largest international exhibition on professional livestock breeding EuroTier 2022.

The funds raised will be used to implement a program to restore Ukrainian agricultural enterprises that suffered from military aggression and 100 scholarships for the education of IDP children at the Ukrainian Agrarian Lyceum.

We talked to Andriy Dykun, the founder of the SAVE UA fund and the chairman of the Ukranian Agrarian Council, about how the agrarian sector overcomes today's challenges.

What challenges do agrarians face in seven months of full-scale warfare?

— Under war conditions, agricultural enterprises in Ukraine can be divided into three groups according to the types of problems: unoccupied, de-occupied and under occupation. Agribusinesses that have not heard the loud bursts of shells have the main problem associated with the sale of products. We all know that the seaports were closed from the beginning of the Great War until August. All agricultural exports were redirected to the western borders, which were not ready for such volumes. If until February 24, Ukraine exported 7 million tons of agricultural products every month, 5 million tons of which were exported by sea ports, in March this year total export fell to 0.3 million tons. But gradually by August this figure managed to increase to 4.5 million tons. If the 'green corridors' continue to work, we expect to see positive numbers.

However, there is another problem. Blocked exports and high residuals, have made domestic prices lower than the cost of production. And this jeopardizes the sowing season next year. Farmers simply will not have the financial capacity.

How can these problems be leveled by farmers? What steps should there be on the part of the state?

— We hope that this problem will be solved by the continuation of the 'Istanbul agreement' and the grain will continue to leave Ukrainian ports. We also hope that the state will buy approximately 20-30% of the accumulated grain from farmers at decent prices, so that our farms will have money and prolong the sowing campaign in the spring of 2023. This is not a small amount, according to our calculations we need $4 billion. In conditions of war the Ukrainian government is forced to direct all funds to military needs. Without the help of our Western partners we are unlikely to get this amount, but it has to happen, because it will help us survive and go into the fields in the spring.

What losses does Ukraine expect in crop production? What volume of harvest, in your opinion, will be possible this year?

— According to our estimates, we expect about 60 million tons. The Ministry of Agrarian Policy estimates 68 million tons. Losses are undoubtedly great. But if you do not compare it with last year, which was a record for the entire history of independence of Ukraine - 107 million tons, the figures do not seem so scary. After all, on average Ukraine used to collect about 70 million tons of crops a year.

As for livestock, what losses and recovery time are we talking about? After all, compared to crop production this sphere is much more difficult to recover.

— The current losses of commercial production of pigs are estimated at 13-15%, so the annual production of pork will probably decrease to 365-380 thousand tons in slaughter equivalent, compared to 432 thousand tons last year. According to the estimates of our Association 'Ukranian Pig Breeders', the industry can reach the pre-war production level in 1-2 years.

We see similar indicators of decline in the dairy sector. According to the estimates of the Association of Milk Producers, as of September 1 the losses of livestock in the industrial sector amounted to over 50 thousand cows.

Total milk production in eight months fell by -15% to 5.1 million tons. However, despite significant losses of dairy livestock in the industrial sector, milk production from dairy farms fell by only 7% (to 1.7 million tons) for the first eight months compared to the same date last year. Losses in private farms are much higher — more than 18.6% (to 3.4 million tons).

However, we expect acceptable final figures this year. By the end of the year, the level of milk supply for processing will not be lower than 2 million tons (last year 2.48 million tons), which will be enough to keep the market running.

All this is possible only with the support of all sectors of the agrarian sector now. If support is not provided in time, we could lose the entire sector, especially the livestock industry.

What are the ruined farms to do? Can we believe that fixing the damage will help recover funds for lost property?

— This is one of the areas that WAR is working on with USAID - AGRO. In collaboration with international legal experts and our lawyers, we have developed a methodology for fixing damages. At the WAR level alone, there are already more than 100 businesses that have approached us and we are now accompanying them in this process. After the victory we know that there will be access to Russian money as reparation, there will be international support. That is why what was lost as a result of combat operations must be properly fixed and legally formalized. We are helping to do this. I believe that those who applied will be partially or fully compensated for their lost and found and lost profits.

The increase in energy tariffs can "finish off" many farms in Ukraine. Can the mass construction of biogas plants improve the situation? What should the state do in order to provide each farmer with 2 thousand hectares of cultivated land with the opportunity to provide himself and neighboring villages with biogas, biomethane?

— The Cabinet of Ministers of Ukraine has recently adopted a decree, which allows adding produced biomethane to the general gas transportation network. Further this fuel can be exported abroad. This has already revived the market and entrepreneurs have started pilot projects on production of biomethane for networks with traditional gas. Biomethane for the pipe or biogas from which to produce electricity and supply light to themselves and the surrounding villages can really be a way out of the situation on the energy market. This can become an additional source of income for agricultural enterprises. This industry may be developed by two factors: state support and clear rules of the game on this market. We may leave out the first one at once, because in war conditions the government won't allocate money for it. But the state can create transparent and equal competitive conditions for all who want to engage in this business.

What ways do you see for the agribusiness sector to resume after victory?

— We must develop the creation of added value, and this cannot be achieved without processing plants. Ukrainian farmers today are already able and willing to start value-added production. It should be large enterprises for processing of agricultural raw materials. Or, following the example of the United States, we need to unite into agricultural cooperatives, which will also engage in processing.

We need to learn to produce more on one hectare than we do now. We need knowledge to organize these processes on a national scale. We have already begun negotiations with the University of Iowa to create an agrarian university, which will help Ukrainian farmers to increase efficiency: to start producing more products using the same area.

Where else to look for support for the farms?

— From the first days of the full-scale war we started the work of the humanitarian headquarters. We already have experience in helping people and businesses in crisis situations. I can name the main periods, it was 2014 at the beginning of the war with Russia, it was the pandemic and February 24 of this year. This time everything is much bigger, so I founded a powerful charitable foundation SAVE UA with the support of UAC, AMP, AUPB.

Our main task is to ensure the food security of Ukraine. This cannot be achieved if we don't support the agricultural sector now. Since the first days of full-scale war we have been helping agrarian enterprises. To do this, we involve our colleagues and businesses from Europe.

Together with USAID, the Swiss government and the Association of Milk Producers, we have already launched three projects to support the agricultural sector. In September, EuroTier 2022, Europe's largest agricultural exhibition, joined our initiative. We organized a partner fundraising campaign. We are grateful that in the framework of this cooperation the organizers of the exhibition will allocate 1 euro from each ticket, which will go to the reconstruction of several war-torn agrarian enterprises. We also hope to raise additional fundraising funds at the Foundation's stand.

So this year, participating in the exhibition as an exhibitor and even as a guest, you can support the agricultural sector and help it to accelerate the pace of recovery. But we also encourage exhibitors and guests to donate to support Ukrainian agrarians for further productive partnership. by