Ukraine Reconstruction and Recovery Investment Needs Assessment – Ukraine

Summary

● As the war in Ukraine continues and its outcome remains uncertain, the damage to its agriculture and agri-food sector is already on an unprecedented scale, both in terms of impact on the national economy and food security world.

● Plans for the reconstruction and rehabilitation of Ukrainian agriculture are urgently needed to mitigate the impact of the war domestically and internationally, but their successful implementation will depend on the achievement of a stable peace and sustainable.

● The damage caused by the war to a country whose agricultural production and exports are as important as those of Ukraine is unprecedented since the Second World War. Current infrastructure damage is estimated at $68 billion to $199 billion and the economy is expected to contract by 40% in 2022.

● The costs of reconstruction and rehabilitation of Ukrainian agriculture due to losses and damages resulting from Russian aggression on the country will most likely exceed similar estimated costs as a result of the armed conflict in Syria, given the complexity its food system (including export infrastructure) and billions of dollars in lost export revenue.

● Damage is defined as physical assets and inventories totally or partially destroyed, while losses are calculated in terms of production and income lost due to war.

● The total value of capital stock in Ukrainian agriculture (including upstream and downstream sectors) is estimated at USD 29 billion. Potential direct damage to agricultural assets can be initially estimated at $6.4 billion (this includes destruction of irrigation infrastructure, storage, machinery and other agricultural equipment, port infrastructure, greenhouses, field crops, livestock and processing units).

● The additional economic losses expected from the war in 2022 are estimated at around 22 billion dollars.

● The FAO’s partner international financial institutions (World Bank, EBRD) have already pledged respectively 3 and 2 billion USD for Ukraine’s recovery. However, it is clear that the real stimulus and investment needs will be much higher in the agriculture and agri-food sector alone.

● Any agricultural investment/recovery plan should be part of the national recovery strategy and should be based on a pre-disaster baseline, damage and loss assessments followed by an assessment of recovery investment needs . Provisional priority areas to be covered by a recovery and investment plan for Ukrainian agriculture are likely to include rural household support and food security, liquidity and access to finance, mine clearance, input supply essentials, seed production and breeding, compensation for lost assets and other areas of immediate and long-term development needs.

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