CREATING TOOLS FOR ASSESSING THE IMPACT OF THE LOSS OF ARABLE LAND ON UKRAINIAN AGRICULTURE AS A RESULT OF THE WAR
Abstract
The Russia-Ukraine war has had considerable consequences for the agricultural sector, resulting in substantial losses due to land damage, changes in cropping patterns, logistical constraints and economic instability. This paper aims to address a gap in the literature by developing a comprehensive methodology for estimating the economic impact of uncultivated land on Ukrainian agriculture. In particular, the study examines the direct and indirect economic consequences of the loss of arable land due to hostilities. The research methodology encompasses several stages, including the collection of uncultivated area data using satellite imagery, the analysis of historical yield and cultivation cost data, and the estimation of logistics costs and changes in the structure of production costs. Direct losses were calculated as the difference between the potential income from crop yields (corn, wheat, sunflower) and the cost of production. Indirect losses included reduced soil fertility, loss of crop rotation benefits, opportunity costs of capital, increased future production costs, and fixed costs. The study revealed that in 2023, 2,440 hectares of agricultural land in Velykopysarivska village council remained uncultivated, constituting 7.5% of the community's total agricultural land area. The economic analysis indicated that farms experienced an average income loss of $128.3 per hectare, amounting to a total income loss of $313,000. These losses have knock-on effects on not only direct producers but also wider value chains, logistics infrastructure and food security. The proposed methodology is a versatile tool that can be adapted to assess losses in other regions and integrated into strategic planning for agricultural sector recovery. In addition to assessing losses, the paper provides recommendations for adapting agricultural policy, including land rehabilitation, improving cost management, and promoting sustainable development. The findings of the study contribute to a more profound comprehension of the economic ramifications of the war for Ukrainian agriculture and can function as a foundation for the establishment of state policy in the domain of support and development of the agricultural sector in times of crisis.
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FAO. (2023). Ukraine: Impact of the war on agricultural enterprises – Findings of a nationwide survey of agricultural enterprises with land up to 250 hectares, January–February 2023. Rome. https://doi.org/10.4060/cc5755en
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