Ukraine’s agriculture and food production sectors continue to grapple with profound challenges amidst the ongoing conflict, warns Alex Lissitsa, president of UCAB (Ukrainian Agribusiness Club). Despite some signs of recovery, Lissitsa stresses the urgent need for a more robust business environment and enhanced human capital to stabilize food production.
UCAB, which includes both Ukrainian and international giants like Danone, Pepsico, and Bayer, underscores the gravity of the situation. Recent discussions in Berlin, attended by leaders such as European Commission President Ursula von der Leyen and Ukraine’s President Volodymyr Zelenskyy, aimed to strategize support for Ukraine’s reconstruction. However, critical questions remain unanswered regarding how to attract private investment into Ukrainian agriculture amidst ongoing conflict.
Since the Russian invasion in 2022, Ukraine’s agrifood sector has faced extensive damage, including the destruction of farms and equipment, rising production costs, labor shortages, and landmine hazards. A joint study by the Kyiv School of Economics and the World Bank estimates total losses to the sector at approximately €75 billion, with a further €52 billion needed for reconstruction over the next decade.
Lissitsa highlights the difficulty agricultural businesses face in securing financial backing, citing challenges in meeting requirements for loans and other financial instruments. Moreover, there is a severe shortage of labor in rural areas, exacerbated by unreliable electricity supply, further complicating efforts to sustain operations in small farms. Despite legislative efforts to exempt critical industry workers, including agriculture, from mobilization, the exemptions have not sufficiently addressed labor shortages across the sector.
As Ukraine navigates these multifaceted challenges, the path to recovery for its vital agrifood sector remains fraught with obstacles, necessitating sustained international support and innovative solutions to rebuild and strengthen resilience in the face of adversity.
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