Ministry of Agrarian Policy: The situation in the agricultural sector is the most difficult since the beginning of the war. Ukraine asks the EU for €1.1 billion to save exports

Ukraine is asking the European Union to allocate €1.1 billion to compensate for additional logistics costs to export up to 22 million tons of Ukrainian agricultural products bypassing the blocked deep-water ports of “Greater Odesa”.

This was stated by the Minister of Agrarian Policy Taras Vysotsky at a briefing in Brussels on the eve of the meeting of the Council of EU Agriculture Ministers, a Babel correspondent reports.

According to him, the Ukrainian agricultural sector is currently experiencing the most difficult situation since the beginning of the full-scale invasion. In September, export volumes may amount to only 46% of the need, while the maximum throughput capacity of alternative routes is about 50%.

"There is a risk that about 30 million tons of agricultural products with a total value of about $10 billion will not be exported," said Vysotsky.

The minister explained that in addition to the direct cost of products, this means unpurchased mineral fertilizers, seeds and protection products, as well as the inability to pay salaries and taxes. According to macro calculations, the reduction in state budget revenues due to this could reach up to UAH 90 billion per year.

Ukraine proposes to the EU to expand the so-called solidarity routes — alternative export routes through neighboring countries. In particular, this includes increasing rail transportation and the ability to deliver Ukrainian products to the ports of Germany and the Netherlands.

However, this route is much more expensive. According to the Ukrainian sideʼs calculations, additional logistics costs can amount to up to €50 per ton. Therefore, Ukraine offers to compensate these costs to European carriers.

According to Vysotsky, €1.1 billion from the EU would be enough for additional exports of about 22 million tons of agricultural products. The minister explained that this is not about direct financial assistance to Ukrainian farmers.

According to him, Ukraine wants to create an opportunity for farmers to sell already grown products, and compensate additional costs to carriers in the EU.

"We focus on giving Ukrainian farmers the opportunity to earn as much as possible, and we are not asking for direct assistance. The funds can be directed not directly to farmers, but to compensate European carriers to increase the distance of transportation to the ports of Hamburg or the Netherlands. This will allow us to keep funds in the EU economy and at the same time export a critical volume of products," explained Vysotsky.

He also emphasized that this concerns exclusively the transit of agricultural products to third countries (North Africa, the Middle East, Southeast Asia), so this will in no way harm the EU internal market or European farmers.

Vysotsky warned that if the export situation does not change, the area sown in Ukraine could decrease by 35-40% in the spring. He said, then could lead to losses for the Ukrainian economy of up to 5% of GDP, as well as create risks for international food security.

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