Indirect losses in Ukrainian agriculture due to the war reach $34.25 billion

Indirect losses in Ukrainian agriculture due to the invasion of Russia as of September 15, 2022, reached $34.25 billion.

This is evidenced by the results of the “Review of indirect losses from the war in agriculture of Ukraine,” prepared by the Center for Food and Land Use Research (KSE Agrocenter) and the Ministry of Agrarian Policy and Food of Ukraine.

Indirect losses take into account the lost income from reduced production and lower domestic prices, and additional costs that producers are forced to bear because of the war.

This amount of $ 34.25 billion includes losses due to the following:

  • disruptions in logistics and lower prices for export-oriented goods – $ 18.5 billion (in mid-September, weighted average domestic prices for major export-oriented crops were 60.7% lower than before the Russian invasion);
  • decrease in agricultural crop production – $ 14.2 billion (reduction in the production of annual crops – sunflower, wheat, corn, barley, and other annual crops in the 2022 calendar year, as well as winter crops in the 2023 calendar year);
  • decrease in livestock production – $ 348.7 million (the reduction of production in live weight, as well as the annual decrease in the production of milk, eggs, and bee products – the expected decline is 10%);
  • increase in production costs – $ 862 million (increase in the cost of fertilizers and fuel);
  • reduction of perennial crop production – $ 322 million.

Compared to the previous issue of the Survey for June, the total amount of such losses increased by $10.8 billion.

This study of losses is based on a method that involves determining the baseline scenario: what would be the production of agricultural products in 2022 without the invasion of Russian troops. 

For the production of annual crops, the average production levels for 2020-2021 were used. To determine the change in production volumes compared to the baseline scenario, the data of the Ministry of Agrarian Policy and Food on changes in sown (harvested) areas and crop yields were used.

The full text of the Review of losses from the war in agriculture of Ukraine can be found here.