((PLAYBOOK SLUG: Inside Story: Ukraine Grain
HEADLINE: Inside Story: Ukraine Grain
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PUBLISHED AT: Nov 8, 2023
BYLINE: Kane Farabaugh
CONTRIBUTOR:
DATELINE: Streator, Illinois
VIDEOGRAPHER: Kane Farabaugh, Adam Greenbaum
PRODUCER: Kane Farabaugh
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VIDEO SOURCE (S): VOA
PLATFORMS (mark with X): WEB __ TV X RADIO __
TRT: 00:25:00
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((INSIDE STORY BUMPER – ARASH ARABASADI))
((INSIDE STORY OPEN GRAPHIC))
((KANE FARABAUGH, Midwest Correspondent ON CAMERA STANDUP))
Welcome to the Inside Story. I’m VOA Midwest Correspondent Kane Farabaugh.
Ukraine is the world’s sixth-largest corn producer and seventh-largest wheat producer, making the nation one of the leading suppliers of key sources of food globally.
((ORIGINAL VOA VIDEO))
The agriculture industry accounts for about 14 percent of Ukraine’s total employment and almost half of the country’s overall exports.
All of that was disrupted when Russia invaded Ukraine in 2022.
But as fighting continued, a deal to keep Ukraine’s grain flowing through Black Sea shipping ports helped stabilize commodity and food prices and provided the country with much needed income. That deal ended earlier this year. After a series of attacks on Ukrainian ports, residents say they feel the country’s now-defunct grain deal with Russia provided some protection, which is also now lost.
((KANE FARABAUGH ON CAMERA))
Ukrainian Port officials say they are working to expand alternative routes but may only be able to export roughly a third of the agricultural goods they did before the war.
((INSIDE STORY MAP GRAPHIC))
VOA’s Heather Murdock reports from Odesa, Ukraine.]]
((VOA VIDEO: DAMAGE IN ODESA, FARMS, BLACK SEA))
((NARRATOR:))
Many residents believe Russia’s pullout from the “grain deal,” which allowed Ukraine to keep exports—most notably a considerable portion of the world’s food supply—moving through the Black Sea, has left them vulnerable and made their ports a target.
((Marina Plakhova)) ((Female in Russian))
“I know in our city people had the opinion that they were being protected by the grain deal. It’s true. I have the same opinion. My family has the same opinion.”
((VOA VIDEO: CITY, SEA, BEACH, FARMS))
((NARRATOR:))
Others say the recent spate of attacks and the deal may be unrelated, as violence continued throughout the year in which the deal was in place.
Now, the usual lines of cargo ships on the Black Sea are gone. But officials say food products are still moving, just at a much slower rate, and the consequences are vast.
((Dmytro Barinov, Ukrainian Sea Ports Authority)) ((Male in Ukrainian))
“This is a problem not just for Ukraine because our farmers need to sell their products and receive their money to seed next year’s harvest. It’s also a problem for the world. Because of the lack of food, prices are growing fast for all kind of agricultural products.”
((VOA VIDEO: UKRAINE FARMS))
((NARRATOR:))
Global food prices rose as much as 20% when the Ukraine war began but came back down after the grain deal was put into place.
((REST OPTIONAL))
((REUTERS VIDEO: WFP DISTRIBUTIONS))
((NARRATOR:))
Prices are already again on the rise. The World Food Program relies on Ukraine for more than half the wheat it uses to feed the poorest people in the Middle East and Africa.
((VOA VIDEO: UKRAINE FARMS))
((NARRATOR:))
Inside Ukraine, officials say they may be able to export roughly one-third the amount they did in prewar years, but that is not enough to keep the farming industry thriving and port cities alive.
((Oksana Vorotnikova, Yuzhne City Council)) ((Female in Ukrainian))
“We had rain and all the conditions for a good harvest. Unfortunately, in war conditions like this, we are happy for the harvest, but we wish it would come in a peaceful time, when we can sell this grain without the threats to lives, the ports and our people.”
((NARRATOR))
This year, winter is expected to be harder in Ukraine’s port cities with reduced incomes, a reduced availability of electricity and attacks that seem to have intensified since the end of the grain deal.
((Heather Murdock, VOA News, ODESA & YUZHNE, UKRAINE))
((INSIDE STORY TRANSITION GRAPHIC))
((KANE FARABAUGH ON CAMERA))
Russia’s withdrawal from the Black Sea Grain Deal came just as Ukrainian farmers were harvesting wheat. When Russia followed up with attacks on Ukrainian ports and grain hubs, it caused global grain prices to surge.
((INSIDE STORY MAP GRAPHIC))
Anna Kosstutschenko spoke with Ukrainian farmers about how this impacts their livelihood.]]
((NARRATION))
With three decades of farming experience, Ruslan Holub has cultivated valuable connections with prominent global traders.
And even before Russia pulled out of a deal to allow Ukrainian grain shipments from Black Sea ports, he says Moscow [pron– [mos-coe] purposely tried to delay those shipments.
((Ruslan Holub, Farmer)) ((UKR))
“I have spoken to many traders and all of them said that Russian inspectors only created unnecessary queues; many ships were simply on hold.”
((NARRATION))
Ukraine has been working to establish new routes along the Danube River and land routes through Slovakia and Poland. But Holub says so far, the Black Sea route remains the best.
((Ruslan Holub, Farmer)) ((UKR))
“The sea lets us save on logistics. // This affects the on-site production cost for farmers.”
((NARRATION))
Dutch farmer Kees Huizinga has been working in Ukraine for over two decades. He worries that he will lose his entire harvest if he cannot ship through the Black Sea routes.
((Kees Huizinga, Farmer)) ((ENG))
“All this wheat behind me we will lose if we cannot export it; we cannot eat it by ourselves. Black Sea is the only option to get this stuff out.”
((NARRATION))
This year, Ukrainian farmers have seen a significant drop in grain prices. Holub says he and other farmers are selling their harvest for about 150 dollars per ton, half the price of 2022.
((Ruslan Holub, Farmer)) ((UKR))
“Currently, we are on the verge of zero earnings, or even losses. How can this be? Ukrainian farmers are hardworking by nature, and they understand we will eventually return to the levels of income we once had. But it is essential to continue planting despite the current challenges.”
((NARRATION))
Ukrainians are counting on international partners, like Turkey and the UN to ensure their grain exports on the Black Sea. Pavlo Lakiychuk is from the Centre for Global Studies.
((Pavlo Lakiychuk, Centre for Global Studies)) ((UKR))
“If necessary, under the auspices of the UN, Turkey can ensure the security of the grain corridor without Russia. The essence of this proposal lies in the fact that ships moving towards our ports and in the Black Sea straits fly various flags, from Togo to Turkey. Therefore, any attack by Russia on any ship would be considered an act of piracy.”
((NARRATION))
After withdrawing from the grain deal, Russia started shelling Ukrainian grain storage facilities. President Zelensky says bolstering air defense systems аt Ukrainian ports like Odesa could help mitigate threats and maintain stable global food prices.
((Anna Kosstutschenko for VOA news Kyiv region Ukraine))
((INSIDE STORY TRANSITION GRAPHIC))
((KANE FARABAUGH ON CAMERA))
Even though these farm fields in the Midwest state of Illinois seem far away from the front lines, farmers in the U.S. are closely connected to developments in Ukraine, and are intently watching for clues about how the developments of the war are impacting not only farmers abroad…
((INSIDE STORY MAP GRAPHIC))
…but their own operations here at home.
((Adam Brown, Illinois Farmer))
01:09:18 “We don’t want Ukraine to be on the losing end of this.”
((NARRATOR))
Adam Brown’s farm just outside Decatur, Illinois is about 8700 kilometers from the front lines of the war in Ukraine.
But when artillery shells and missiles land half a world away, Brown feels the impact on his corn fields in the Midwest.
((Adam Brown, Illinois Farmer))
01:07:38 “We’re reeling from the invasion in Ukraine, and it made everything topsy turvy unpredictable for us and things haven’t stabilized yet.”
((NARRATOR))
First, says Brown, it started with increased prices for grain products.
((Adam Brown, Illinois Farmer))
01:06:40 “We saw this vast ramp up both in corn and soybean prices.”
((NARRATOR))
That’s because markets reacted to the interruption of Ukraine’s significant agricultural exports.
((Adam Brown, Illinois Farmer))
01:08:21 “Prior to the war, they were number 7 exporter of corn. We raise a huge amount of corn here in the Midwest. So we are very cognizant of what they are doing there actually, I watch the news every day and read about Ukraine as much as possible because they are a big competitor, and we want them to be competitors, and we want them to provide the food to Europe that is so valuable over there.”
((NARRATOR))
As other counties filled the void created by the loss of Ukraine’s grain products, this year wheat prices fell about 50% from all-time highs reached during the first month of Russia’s 2022 invasion of Ukraine. Corn prices also dropped after a ten-year high last April.
((Adam Brown, Illinois Farmer))
01:06:40 “But input prices just killed us.”
((NARRATOR))
Belarus and Russia are leading producers of inputs (what are inputs?) like potash – which includes minerals and chemicals that are ingredients in fertilizers farmers widely use on their fields. Input prices soared as Brown was getting ready to harvest last fall, and stayed elevated as he prepared for planting this spring.
((Samuel Taylor, Executive Director of Research for Farm Inputs, Rabobank))
12:55:35 “Belarus as a potash producer, they produce about 20 percent of global exports of potash, and they’ve been directly impacted by associated sanctions.”
((NARRATOR))
Samuel Taylor is an Executive Director of Research for farm inputs with Rabobank. Inputs are resources used to create things, like ammonia, that is a component of fertilizer. He says as the war in Ukraine stretched into its second year, global supply chains and markets adapted to the uncertainty it created, and prices adjusted.
((Samuel Taylor, Executive Director of Research for Farm Inputs, Rabo Bank))
12:58:11
“I think ammonia prices this time last year were 1700, they are now about 600 so you’ve seen a significant fall off in pricing. // 12:57:03 “The price of fertilizers has come off so much that the affordability index has gone to its most favorable that it’s been in nearly 20 years, so there’s actually been a significant inversion on a year over year basis.”
((NARRATOR))
Falling input prices were a welcome development for Gridley, Illinois farmer David Miess.
It just happened to coincide with one of the driest months on record for his farming operation in central Illinois.
((David Miess, Illinois Farmer))
02:01:30 “Here you are at the end of June, with all the money and most of the work other than the harvest part in a crop and you are seeing it wither away.”
((NARRATOR))
His withering crops were the most expensive he ever planted, thanks to those higher fertilizer costs resulting from international sanctions on Russia and Belarus.
((David Miess, Illinois Farmer))
02:02:36 “We were running out of gas, literally.”
((Adam Brown, Illinois Farmer))
01:13:30 “Profitability was a huge concern for us throughout the summer. As we saw prices still elevated, we were afraid to sell our crop because of the drought condition.”
((NARRATOR))
Then, good fortune came to central Illinois, which went from almost no rainfall to 7 inches of precipitation in just three weeks.
((David Miess, Illinois Farmer))
02:02:26 “That’s unheard of to get that much rain.”
((NARRATOR))
While the rains eased concerns of a catastrophic drought, it coincided with Russia’s announcement it was “terminating” a U.N brokered agreement that allowed the flow of grains like corn and wheat through Black Sea shipping channels.
Russia’s subsequent attacks on Ukraine’s export infrastructure injected new volatility into the international marketplace.
((Owen Wagner, Grains and Oilseeds Analyst, Rabobank))
13:09:10 “You’ll see acts of aggression, missiles and things lobbed at grain silos along the Black Sea or grain ships that are compromised, and that will lead prices to spike for a day, but lead to more sustainable volumes afterwards.”
((NARRATOR))
Owen Wagner, a grains and oilseed analyst with Rabobank, says markets are continuing to adapt to Russia’s attacks.
((Owen Wagner, Grains and Oilseeds Analyst, Rabobank))
13:09:00 “It’s a little bit of a sad reflection I think that the world has sort of become accustomed to what’s coming out of Russia.”
((NARRATOR))
U.S. Secretary of Agriculture Tom Vilsack believes increasing market stability is also a result of Ukraine’s resiliency as they establish other ways to export agricultural products.
((Tom Vilsack, U.S. Secretary of Agriculture))
18:54:00 “Ukraine has been working feverishly to create alternative routes and avenues, and I think there is now much more of an opportunity to move grain than there was say 12 months ago notwithstanding maybe the challenges on the Black Sea, there is now an inland route through Romania that is moving quite a bit of grain. So that’s the good news.”
((NARRATOR))
But farmer Adam Brown says the bad news is the decreased production coming from Ukraine.
((Adam Brown, Illinois Farmer))
01:11:19 “If you look at what they are planting currently, they are tilling 25 percent less of their airable ground this year than they have prior to the war. So they are just not producing to the extent that they could, and what they are producing is still under attack from the Russians, so even if it’s stored in a grain silo over in Ukraine, it’s definitely not safe yet.”
((Joe Camp, Director of Managed Programs, Commstock Investments))
01:28:10 “Russia and Ukraine account for about 20 percent of the world’s wheat and corn exports, so if some of that supply is shut off, there is going to be a shifting balance of trade demand and potentially some that might benefit the U.S. exporter.”
((NARRATOR))
Joe Camp, Director of Managed Programs for Commstock Investments - an agriculture risk management firm, says the continuing lack of a Ukraine grain deal is renewing interest in U.S. supplies.
((Joe Camp, Director of Managed Programs, Commstock Investments))
01:28:30 “Ukraine is top supplier of customers like China and so that will have an impact of what’s ahead in terms of U.S. trade demand.”
((David Miess, Illinois Farmer))
02:05:53 “I’ve heard people say that this is going to be good for us eventually in the long run because our commodity is going to be worth more.”
((NARRATOR))
But both Meiss and Brown are keenly aware as demand and prices continue to fluctuate… one person’s gain… could be another person’s loss.
((David Miess, Illinois Farmer))
02:06:35 “People are starving already… suddenly removing that big a portion of the food supply it gets alarming and quite frankly it’s really quite sad, so I would probably literally gladly trade my increased price if I knew people weren’t starving over something like that.”
((Adam Brown, Illinois Farmer))
01:09:01 “It might spell better commodity prices for us, but that’s not where what we want to see our better prices come from. What we want to see is trade. Better negotiations, better neighbors, and in turner greater sustainability for the entire globe really.”
((INSIDE STORY TRANSITION GRAPHIC))
((KANE FARABAUGH ON CAMERA))
[[Following Russia’s invasion of Ukraine, the European Union allowed free trade of Ukrainian crops to help Ukrainian agribusiness. But the glut that resulted prompted some EU members ban sales of Ukrainian grain and other agricultural exports within their borders, creating obstacles that have also threaten the flow of the grain to world markets.
((INSIDE STORY MAP GRAPHIC))
VOA Eastern Europe Bureau Chief Myroslava Gongadze reports from Warsaw, Poland.]]
((VIDEO - original VOA))
((NARRATION))
Lukasz Pergol, a farmer in Dzialdowo, Poland, has begun harvesting one-hundred acres of wheat and other crops.
He is keeping business afloat, especially since the European Union in April allowed Poland and four of its neighbors to ban domestic sales of Ukrainian wheat, maize, rapeseed and sunflower seeds to protect their own farmers who were hard-hit by the wartime flood of Ukrainian shipments.
Agriculture ministers from the five EU states are pushing the EU Commission to extend the ban past its September 15 deadline but will still allow Ukrainian shipments to pass through their countries to other parts of the world.
Pergol sees a good reason for the ban.
((Lukasz Pergol, Polish Farmer, (MALE in Polish)))
“If grain from Ukraine only transited through us, it would not be a problem. But many intermediary purchasing entities took advantage of the war turmoil and the passivity of the Polish government, bought this grain, and used it in our feed factories.”
((VIDEO - original VOA))
((NARRATION))
Rising fertilizer and fuel costs have negatively affected Polish farmers, making it difficult for them to compete with Ukraine's agricultural powerhouse.
And Russia’s bombing of Ukrainian ports — as well as a potential Black Sea blockade — are restricting Ukraine’s exports, creating problems for farmers inside and outside Ukraine and threatening the global food supply chain.
Roman Slaston, director general of the Ukrainian Agrarian Business Association Agribusiness Club in Kyiv, says finding alternative routes via Poland and other countries is key to getting the grain out. Prior to the ban, Ukraine could ship more than a million tons of grain each month. But the ban in April changed that.
((Roman Slaston, Ukrainian Agrarian Business Association Agribusiness Club - MALE, in English))
“Transit after the ban didn’t recover to the volume that we had until April. At least twice or, in some days, triple the downsize of the transit.”
((VIDEO - original VOA))
((NARRATION))
He says some Polish transit routes used before the ban are now closed to Ukrainian crops, and the capacity of the ports is limited.
Marcin Nowacki, Vice President of the Polish Union of Entrepreneurs and Employers, points out the need for new procedures, business models for transit, and enhanced infrastructure to prevent the diversion of Ukrainian grain into domestic markets. [OK?]
https://zpp.net.pl/en/wladze/marcin-nowacki/
((Marcin Nowacki, Polish Union of Entrepreneurs and Employers - MALE, in English))
“We need grain storage somewhere close to Gdansk harbor. If we want to make it easier, if we want to enhance the capacity of transit, the dedicated grain facility for storage is needed.”
((VIDEO - original VOA))
((NARRATION))
Slaston says Ukraine exported more than 68 million tons of grain in the past year, an amount sufficient to feed 400 million people worldwide annually. He predicts exports this year will drop to 60 tons.
((Roman Slaston, Ukrainian Agribusiness Club - MALE, in English))
“From (the) 400 million people we are feeding with our grain, we will be able to provide food only for 200 million. So who will produce for the rest?”
((VIDEO - original VOA))
((NARRATION))
Ukrainian producers warn that unless the problem of delivering Ukrainian grain to the world is not addressed soon, global food security will be threatened further.
((Myroslava Gongadze, VOA News, Warsaw))
((INSIDE STORY TRANSITION GRAPHIC))
((KANE FARABAUGH ON CAMERA))
Russia’s invasion of Ukraine a year ago saw a dramatic rise in the price of fertilizer for importers like Ghana, where farmers are struggling to cope. Ghana’s economic challenges have made imports even more expensive, forcing farmers to switch to different crops and ultimately, reduce production.
((INSIDE STORY MAP GRAPHIC))
Kent Mensah reports from Akatsi, Ghana.
((VIDEO-VOA: FARM SCENES - VARIOUS, KAMASSAH))
((NARRATOR))
Ghanaian farmers were hit hard by the jump in fertilizer prices after the invasion of Ukraine a year ago by Russia, one of the world’s - and Ghana’s - top suppliers.
Western-led sanctions pushed companies not to trade with Russia, which industry experts say forced a 60 percent decline in Ghana’s fertilizer imports, and caused prices to skyrocket.
Farmers were forced to shift to crops that require fewer inputs, says Felix Kamassah, who also reduced his farmed land by nearly a third.
((Felix Kamassah, Vegetable Farmer, (English, 18 secs))
“We have to look at other alternatives to make sure that we are in business because [as] commercial farmers, when we want to rely on fertilizer importation, for now you can’t make any good profit out of it because it’s a big challenge.”
((VIDEO-VOA: FERTILIZER STOREROOM, KAMASSAH AND MOHAMMED))
((NARRATOR))
Fertilizer prices have stabilized since last year’s spike but are still roughly double what they were a year before the invasion, too expensive for most Ghanaian farmers.
Ghana’s economic problems have made imports even more pricey as the currency, the cedi, dropped in value last year by more than half.
Nana-Aisha Mohammed is country manager for the African Fertilizer and Agribusiness Partnership (AFAP).
((Nana-Aisha Mohammed, AFAP Country Manager, (English, 25 secs))
“The dynamics of fertilizer crisis in Ghana have slightly changed. Globally, the prices are stabilizing, however, it will take about six months for retail prices to catch up. And this is largely due to logistics and supply chain issues… we also as a country are facing some economic challenges, which means that our currency is not very stable and it’s performing very poorly against the trading currency which is the dollar.”
((VIDEO-VOA: COCOBOD OFFICE - VARIOUS, BOAFO))
((NARRATOR))
Mohammed says food exports from Ghana, the world’s second largest cocoa exporter, have also been affected.
But Ghana Cocoa Board spokesman Fiifi Boafo says a quick switch to organic chicken manure has helped farmers bridge the gap.
((Fiifi Boafo, COCOBOD Spokesman, (English, 25 secs))
“In terms of quality it is even better for us to rely on the poultry manure than the inorganic fertilizer that we import because that is natural… It has shown that it rather builds a soil structure better than the inorganic fertilizers. The only challenge, however, is that coming by it is a bit more difficult compared to accessing the inorganic from the market.”
((VIDEO-VOA: FARM FIELD - VARIOUS, KAMASSAH))
((NARRATOR))
Ghana last April announced plans to build a $2 billion fertilizer plant for local production, but that will take about four years.
Meanwhile, farmers like Kamassah are left reaping what they can as economic casualties in a war sown by Russia.
((Kent Mensah, for VOA News, Akatsi, Ghana.))
((INSIDE STORY TRANSITION GRAPHIC))
((KANE FARABAUGH ON CAMERA STANDUP))
[[For Ukrainian farmer Yuriy Voychenko, trying to work under Russian occupation was in his words nothing but “dead farm workers and injured cattle”. Russian forces left his area in September 2022, but left behind a deadly legacy: mines, scattered throughout his fields in Kharkiv.
((INSIDE STORY MAP GRAPHIC))
Anna Kosstutschenko has our story.]]
((NARRATION))
The family of 43-year-old Yuriy Vovchenko has been farming in the Kharkiv region for five generations. And he continues to do so today, in the middle of a war, having endured months of Russian occupation.
The Russians are gone, but the mines they planted in his
((Mandatory courtesy: Yuriy Voychenko))
fields remain. That has forced Vovchenko and his workers to clear this land, over 6000 hectares, by hand.
((End courtesy))
((Yuriy Vovchenko, Farmer)) ((UKR))
“It was very dangerous to walk through these fields and prepare soil for sowing. But we are doing it to survive – if we don’t do it this year, there will be little hope to survive the next one.”
((NARRATION))
Vovchenko gets the grain he sows from a fellow farmer in central Ukraine. His stocks were burnt by the Russians when they occupied the region from March 2022 to September 2022, and Vovchenko recalls feeling constant terror.
((Yuriy Vovchenko, Farmer)) ((UKR))
“They called us all Nazis. And you can’t argue with a man who is pointing a gun at you…”
((NARRATION))
He recalls how they locked the cattle in the barns and wouldn’t allow locals to feed the animals.
He says they also put anti-personnel mines in the barns with the cattle. Vovckenko once had over 2 000 cows, only 200 survived.
((Yuriy Vovchenko, Farmer)) ((UKR))
“The cows would move, step on the mines and get blown into pieces. Shrapnel also hit many of them – so, if one cow stepped on a mine, another two or three next to it would get hit and bleed to death.”
((NARRATION))
Before the war, Vovchenko worked with a French yogurt producer operating in Ukraine. Today, however, he is selling his milk at a local market to get at least some money. This income goes to paying his workers.
He estimates the Russian invasion cost him some 15 million dollars since the start of the war.
And while this damage is reparable, some other losses are not, says Vovchenko. During the occupation, Russian forces captured six of his workers, tortured them and then burnt them alive.
((Yuriy Vovchenko, Farmer)) ((UKR))
“After the de-occupation, DNA analysis showed that these were our people that were burned in cellars…”
((NARRATION)
Before the war, Vovchenko’s farm gave some 250 people jobs. Today, it’s one of the only places in the town of Balakliya that provides the community with work.
((Anna Kosstutschenko for VOA News, Kharkiv region, Ukraine.))
((INSIDE STORY TRANSITION GRAPHIC))
((KANE FARABAUGH, VOA Midwest Correspondent)) ((ON CAMERA))
“Thanks for joining us on the Inside Story.
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Catch up on past episodes at our free streaming service, VOA Plus.
I’m Kane Farabaugh, and we’ll see you next week on The Inside Story.”