U.S. Agency for International Development USAID Administrator Samantha Power condemned Russia’s decision to suspend participation in the “grain initiative” and announced $250 million in support for Ukraine’s agriculture sector, which has suffered as a result of Russia’s full-scale invasion, USAID said.
“The United States is providing this assistance because of its Agriculture Sustainability Initiative-Ukraine (AGRI-Ukraine). In total, the U.S. government has already directed $350 million to the initiative. The agency plans to engage the private sector, other donors and foundations to raise an additional $250 million,” the USAID press office quoted Power as saying during a visit to the Port of Odessa on Tuesday.
The additional funds will be used to expand critical agricultural infrastructure, including irrigation systems, grain elevators, transloading facilities, and port and border infrastructure.
In addition, USAID will expand support to small and medium-sized agricultural businesses so that they have access to financing and resources to plan for planting and harvesting in 2023.
The agency noted that the Russian full-scale invasion has caused more than $6.6 billion in direct damage to Ukraine’s agricultural sector.
“AGRI-Ukraine will continue to help Ukraine’s farmers produce, store, and export agricultural products and grain to the world,” USAID assured.
The AGRI-Ukraine initiative was launched in July 2022 and supports more than 30% of Ukraine’s registered farmers. Thus, the U.S. provides seeds, fertilizers, agricultural and financial services and storage.
Thanks to USAID support, farmers were able to store more than 843,000 tons of grain, and more than 600 farmers received nearly $49.8 million.
International companies such as Bayer, Grain Alliance, Kernel, and Nibulon are investing in programs to support Ukraine’s agricultural sector. The World Bank has also joined AGRI-Ukraine in financing reforms in the sector.
The US government, through the USAID AGRO Program, will provide Ukrainian agrarians with 12,000 tons of fertilizers for the autumn sowing season free of charge, the press service of the Ministry of Agrarian Policy and Food said.
“Before the war, Ukraine provided domestic needs for nitrogen fertilizers by 75%. However, due to the full-scale invasion, production has decreased due to logistical problems, broken production chains and rising costs of raw materials. This has limited access to fertilizer for micro, small, and medium-sized farmers. USAID will help agribusinesses ensure their farms have the fertilizer they need in the fall and continue next year,” the statement said.
Agrarians who cultivate from 5 to 500 hectares in any region of Ukraine (except for temporarily occupied territories), grow grain or oilseed crops, are registered as legal entities or individual entrepreneurs, in particular, family farms, will be able to participate in the program.
They will be able to receive 1 ton of nitroammophoska (NPK 16:16:16:16/15:15:15:15) for main and pre-sowing application.
Registration for assistance has already started in the State Agrarian Register (SAR). Applications are accepted exclusively through the GAR, under “Available Programs” – “NPK Fertilizer from USAID AGRO, 2023.” Registration will continue until the applied amount of fertilizer is exhausted.
The USAID AGRO program will hold a public webinar on July 20, 2023 on the terms and conditions and receiving assistance.
As reported, USAID launched a number of programs in 2022 to address the global food crisis, which is exacerbated by the war waged against Ukraine. In the spring of 2023, more than 8,200 Ukrainian agrarians received more than 6,300 tons of fertilizers from USAID, as well as seeds for sowing more than 48,300 hectares of sunflower and 15,000 hectares of corn.
The USAID Competitive Economy of Ukraine program announced a grant program to create and support associations of businesses into export alliances with a total funding of $1.5 million, the Economy Ministry press service said Friday.
“Grant support for export alliances will strengthen the potential of Ukrainian enterprises and encourage them to unite for common goals of conquering new markets,” USAID project manager Natalya Petrova said in a statement.
The program offers about 15 grants, ranging from $35,000 to $150,000. Applications will be accepted till September 30, 2023. Given the considerable interest, reception and consideration of applications will be held in stages on June 30 and September 30, 2023.
The Ministry of Economy added that the goal of the grant program is to support businesses seeking to jointly promote their products in international markets. The initiative is implemented in partnership with the Office for Entrepreneurship and Export Development and the national project “Dia.Biznes”.
As the press service specified, the priority sectors for grant support are information technology, engineering, manufacturing, and creative industries and services. However, this USAID program is open to applications to support other sectors that meet the selection criteria.
The USAID Competitive Economy of Ukraine (CEU) program supports start-ups and small to medium-sized enterprises (SMEs) to increase their competitiveness in Ukraine’s domestic market and in international markets, assists in the development of a simplified and transparent business climate, and provides opportunities for Ukrainian companies to take advantage of international trade. A key instrument for implementing the USAID QEU program is the $12.5 million grant program at the national scale for 2018-2023.
The USAID Agro program will allocate UAH 367 million to co-finance projects to support processing of grains, oilseeds and pulses in Ukraine, the press service of the Ministry of Agrarian Policy reported.
“This will create the potential for the production of products with added value and ensure the expansion of channels and markets. Consequently, qualitatively and quantitatively improve the food security of Ukraine and the world,” the report stresses.
According to USAID, the goal of the project is to improve small agricultural producers’ access to capacities for processing and refining grains, oilseeds and pulses into food, feed, industrial products and biofuel.
As it is specified, it is planned to allocate up to 367 million hryvnia within 20 projects with the term of realization up to two years. It is assumed that the amount of each sub-grant will be from 10 to 36 million UAH and will be discussed individually.
“It is expected that under the projects executors – Ukrainian entities – will provide MSME with expert, technical and financial support to expand the processing of grain, oilseeds and pulses. Activities will be aimed primarily at expanding existing processing facilities, which will lead to increased production of higher value-added cereal products for domestic consumption and export,” the report summarizes.
The risks of investing in Ukraine are already lower than at the beginning of the war and the opportunities are higher, the first foreign investors such as Kingspan, Nestle and Bayer are already investing in the country and American businesses should follow their lead and benefit while they will have government support, USAID Administrator Samantha Power said.
“By investing in Ukraine, you can join companies like Kingspan, Nestle, and Bayer who are pioneering, you can invest in the future of Ukraine, and in doing so, you will be investing in the future of democracy. Know that USAID and our partners around the world plan to provide full support,” she said at the Ukraine-U.S. Partnership Forum hosted by the American Chambers of Commerce of the two countries in Washington, D.C. on Thursday.
Power said Ireland’s Kingspan group recently announced a $200 million investment to build a technology campus in Lviv that will employ 600-800 people, Nestle is investing nearly $43 million in a new food processing facility that will add 1,500 new jobs and Bayer is investing over $65 million to expand its corn seed plant, new warehouses and bomb shelters to protect employees.
She added that even during the war Ukraine has expanded its leadership in advanced industries such as artificial intelligence, fintech and blockchain, and in 2022 the IT industry brought more than $7 billion to the Ukrainian economy – 20% more than the year before.
The head of USAID stressed that the U.S. government is willing to work with businesses to reduce risks and try to remove barriers to investing in Ukraine as much as possible. “We are investing heavily in partnerships with the Ukrainian government, other democracies, and multilateral institutions to reduce the cost of doing business in Ukraine,” she said, citing assistance with restoring energy supplies and supplying seeds and fertilizer to Ukrainian farmers.
Speaking about removing barriers that still hinder investment, Power said a survey of 122 U.S.-Ukraine-related Chamber of Commerce companies, U.S. investors, international organizations and economic experts was conducted and eight areas of reform were identified.
“And now we’re taking this crowdsourced program of reforms and working with the Ukrainian government to help ensure they’re implemented,” the USAID chief added, citing among them increased transparency, increased judicial independence, and risk insurance.
“Now I know that you are all well aware of the potential benefits of being an early investor in an economy ready for substantial growth, ready for much deeper integration with European neighbors in the years ahead,” Power summed up.
And she also noted that a contribution to Ukraine’s economy now is a contribution to winning the war, a bet on values that are cherished in America.
The U.S. Agency for International Development (USAID) announced collaboration with three major Ukrainian agricultural holdings to develop their grain export and storage infrastructure for a total project investment of $44 million.
According to CNN’s website, the three companies are large Ukrainian agricultural producers Kernel, Nibulon and Grain Alliance.
It is specified that the cooperation with the companies will help increase Ukraine’s capacity to ship over 3 million tons of grain to foreign markets per year. Investments will be used to develop the infrastructure of agricultural products storage and expansion of elevators.
“This announcement is part of a deliberate effort by the Biden administration to develop Ukraine’s economy and mitigate the global food security crisis that escalated after Russia’s invasion of Ukraine,” the publication specified in the report.
As earlier reported, before the war Kernel was the world’s number one producer and exporter of sunflower oil (about 7% of world production) and was the largest producer and seller of bottled sunflower oil in Ukraine. The company was also engaged in cultivation and sale of other agricultural products.
In FY2022 (July-2021 – June-2022), the holding posted a net loss of $41 mln versus $506 mln net profit in the previous FY. Its revenue decreased by 5% to $5.332 bln, and EBITDA decreased by 3.7 times to $220 mln.
Nibulon, one of the largest grain market operators in Ukraine, on April 15, 2022 received the permit from Izmail city council (Odessa region) for the construction of the terminal for handling grain cargoes on the land plot with the total area of 20 hectares.
“Nibulon” was established in 1991. Before Russian military invasion grain trader had 27 transshipment terminals and complexes to receive the crops, the capacities for one-time storage of 2,25 mln. tons of agroindustrial complex products, fleet of 83 vessels (including 23 tugs), and also owned Nikolaev shipyard.
“Nibulon” before the war worked 82 thousand hectares of land in 12 regions of Ukraine and exported agricultural products to more than 70 countries.
The grain trader exported maximum 5.64 million tons of agricultural products in 2021, reaching record volumes of deliveries to foreign markets in August – 0.7 million tons, the fourth quarter – 1.88 million tons and in the second half of the year – 3.71 million tons.
Grain Alliance Agro Holding in spring 2022 purchased a grain logistics hub near the border of Ukraine and Slovakia to deliver agricultural products by land bypassing Ukrainian ports, the throughput capacity of which was significantly reduced due to the full-scale Russian military invasion. The transshipment capacity of the grain terminal in Černá nad Tysou (Slovakia) will be up to 400,000 tons per year.
Before the war, Grain Alliance farmed 57,000 hectares in Kyiv, Poltava, Chernigov and Cherkassy regions, grew more than 300,000 tons of grains and oilseeds a year, and owned more than a thousand head of cattle.
Agroholding has six granaries in Ukraine with a total capacity of over 260 thousand tons.
The founders of Harvest Moon East LLC (Baryshevka village, Kyiv region) and BZK Grain Alliance (Sweden) established a joint company, Grain Alliance, in 2009.
