Ukraine: EU-FAO partnership to ensure recovery and development of agricultural value chains

Rural households, smallholder farmers and small-scale agricultural enterprises will benefit from a $15.5 million project funded by the European Union (EU) and implemented by the Food and Agriculture Organization of the United Nations (FAO) to support the functioning, reinforcement and strengthening of value chains in agriculture, fisheries and forestry, and their adaptation to the wartime conditions.

The project will focus on supporting producers in Lvivska, Ivano-Frankivska, Zakarpatska and parts of Chernivetska oblast with matching grants for on-farm and value chain-based investments coupled with extension and advisory support.

″The EU funds for this FAO project aim to re-establish or reinforce pre-war level functionality of agricultural value chains. This is needed to meet the food requirements of local and displaced populations in the west and address food insecurity elsewhere in the country in the immediate and short term, and will be critical to averting a food crisis into 2023,″ said Christian Ben Hell, the Sector Manager for Agriculture at the EU Delegation to Ukraine.

Food security worsens rapidly

The food security situation in Ukraine has deteriorated rapidly following the eruption of the war on 24 February 2022, which has caused extensive destruction of crops, agricultural and other civilian infrastructure, and disrupted both supply and value chains.

FAO’s recent nationwide assessment on the impact of the war on agriculture and rural households reveals that one in every four of the 5 200 respondents has reduced or stopped agricultural production due to the war. Through this EU-funded project, which initially started in February 2021 with a preparation phase but then was put on hold due to the war to be repurposed to meet the current needs, in March-May 2022 emergency agricultural support was provided to over 6 000 rural households. This assistance covered the urgent population’s need for agricultural inputs, cash, vegetable seeds and seed potatoes to continue food production for household consumption.

"The testimonies of the individuals and families who I met during my visits to the newly accessible areas confirm the urgent need for immediate support towards restoring their household capacities and avoiding dependence on humanitarian assistance. At the same time, it is imperative that the Government is supported in its efforts to develop the agriculture sector and to strengthen and diversify value chains," said Pierre Vauthier, Head of FAO Ukraine country office.

As the war persists, market participants including large numbers of household and family farms, individual producers, small companies, traders and processors are experiencing difficulties in accessing inputs, finance and investment to support continuity and expansion of operations. The major difficulties expected in the next few months in terms of both crop and livestock production activities are low benefits from the sale of products, constrained access to fertilizers or pesticides, and fuel or electricity to power equipment.

Timely support to producers

″Although the required analytical work was completed prior to the war, its escalation altered the programming environment and reshaped the priority needs of the agrifood sector participants.″ said Hanna Antonyuk, Project Manager at FAO Ukraine. ″The project aims to provide timely support to agricultural producers and small-scale agricultural enterprises with urgently needed access to finance, technical and business development advice and market intelligence. During wartime, these investments are necessary to secure the operations of agricultural producers, to support their adaptation to the evolving environment and to lay the foundations for sustainable growth.″

The investment support programme will be launched through Ukraine’s State Agrarian Registry (SAR) and, starting from March 2023, the matching grants will be provided to eligible agricultural producers and agricultural enterprises in the following value chains:

Lvivska oblast:

• Berries

• Vegetables

• Aquaculture

Zakarpatska, Ivano-Frankivska and parts of Chernivetska oblasts:

• Hutsul sheep bryndzya, Protected Designation of Origin (PDO)

• Hutsul cow bryndza, Protected Designation of Origin (PDO)

• Zakarpattia Honey, Protected Geographical Indication (PGI)

• Zakarpattia wine

Grants in the range of $1 000 to $25 000 will be disbursed in Ukrainian hryvnia (UAH) at the prevailing exchange rate and beneficiaries will be required to make a matching contribution to finance the proposed investment. Specific eligibility and selection criteria, as well as procedural and administrative requirements to submit an application will be published through a publicity campaign expected to be launched shortly.   

In addition, the project aims to assist the National Academy of Agrarian Sciences in preserving a unique national collection of plant genetic resources, which is of global significance in terms of the volume and diversity of genetic material. The project will secure and safeguard the collections of the Ukrainian plant genetic resources by moving them to a safe storage location and will improve the collections database with modern IT support.