For Oleg Bakhmatyuk, Partnerships With Ukraine Are Key for Global Food Security

During the last weeks of March, Indian farmers joined forces with other European farmers who started protesting the impact of Russia’s war in Ukraine, rising competition in agriculture, as well as other policies on climate change mitigation. These protests come in time as several countries are also going through major elections this year, such as is the case for Ukraine and the United States.

A few months before, Polish farmers were also protesting the same issues, but on this occasion they also blocked Ukrainian roads, thus leading to disruption in commercial trade. For Oleg Bakhmatyuk, founder and CEO of Urklandfarming, a group of major agricultural companies in Ukraine and globally, Ukraine was “simply caught in the middle,” and Polish agricultural producers have complaints about the European Union’s economic policy, not Ukraine.

Such protests may come aligned to other similar occurrences found in other European countries, as farmers fear Ukraine joining the European Union. For the founder of Urklandfarming, this is a rather primitive concern. “The future of the European Union,

including Ukraine, lies in joining forces and strengthening the EU’s competitiveness in the global food markets”, explains Bakhmatyuk. “Such a consolidation of efforts will create a single large and independent player, which is the way to significantly increase the economic capacity of the European Union.”

Ukraine is a major provider of grains that, consequently, safeguard global food security. Therefore, disrupting their trades also means putting at risk the food safety of other countries besides those affected by the war. But despite the conflict, Ukraine has been able to grant stability in its economy. In 2023, the country’s economy grew by 5% despite the war as it exported 62 million tonnes of cargo – 45.5 million tonnes in grains, and another 6.2 million tonnes in liquid bulk (mainly vegetable oil). “Ukraine has largely retained its export potential and has a tendency to increase it further”, says Bakhmatyuk. “We have demonstrated resilience and predictability, which means it is attractive for investors in a market as dynamic as the European.”

In the meantime, the export corridor has also been working well towards this objective. For Bakhmatyuk, this is not a miracle but the result of hard work and efforts by the Ukrainian government, defense forces, and Ukrainian agricultural producers. “Last year, Ukraine managed to get closer to the pre-war 2021 port transshipment figures. In January 2024, 12 million tonnes of products, a decrease of only 2 million tonne”, he argues. “To get figures back to normal though, the security in the Black Sea must be maintained, Then, gradual growths in maritime exports would be able to be observed.”

Such an outcome can be achieved, for instance, by securing partnerships with neighbor countries. A good example is the allegiance firmed between Ukraine and Bulgaria when it comes to the production of sunflowers. In 2022, Ukraine has exported almost 3 million tonnes of the plant, a significant increase in the average yearly production of 15,000 tonnes. However, the country was facing serious problems with processing facilities that were destroyed in the war. Bulgarian farmers, on the other hand, had a less successful harvest whereas their facilities are available for processing.

For Bakhmatyuk, this is where diplomacy can find a way out: “In the case of Bulgaria, it was not a conflict, but a synergy: we did not export sunflower for a certain period of the season until the local farmers sold the crop.” The founder of Urklandfarming explains that, after Ukraine helped local crushers with exported sunflower, Bulgarian producers have loaded their processing plants and are successfully selling their products. “Everybody benefited”, he concludes.

However, unlike the agricultural sector, the metallurgical industry in Ukraine has been more heavily impacted by the war. With the destruction of several facilities, production has declined significantly in the country.

Bakhmatyuk mentions that the share of metallurgical production in the composition of industrial sales decreased by 7.9 percentage points compared to 2021, amounting to 9.1%. “To get figures back to normal though, the security in the Black Sea must be maintained”, says the CEO.

For the entrepreneur, this is a realistic assumption, given Ukraine’s experience in ensuring the functioning of the corridor: “We will have a steady trend towards further gradual growth in maritime exports and global markets are responding positively to this.”

In the meantime, the country has adopted a wartime economy approach with intensified investment in the defense industry, machine building, and further high-tech sectors. “This is not only for defense needs but also for the country’s recovery”, explains the CEO of Urklandfarming.

That results in his optimistic view for the future and the forecasts: it is expected that investments grow by almost 30% in 2024 compared to last year. “This means that we are becoming a more modern and interesting economy for investors”, says the founder of Urklandfarming.