$25 million for crop storage
It is about possible funding within the program ARISE. Funds should be directed primarily to facilities and infrastructure for grain storage by small and medium-sized producers.
Currently, the parties have yet to determine a specific financing mechanism. The Ukrainian side is interested in speeding up the procedures as much as possible, since the problem of storing the new crop already directly affects the work of farms.
The importance of such financing has increased due to the fact that producers simultaneously face export restrictions and the risk of damage to existing grain storage facilities.
Why Ukraine lacks granaries
The problem arose not only because of the increase in the harvest. A significant part of Ukrainian agricultural products was traditionally exported by sea, but due to the war, the operation of the port infrastructure remains unstable.
Russian attacks also pose a risk to elevators, terminals and other facilities where products ready for export are stored.
Therefore, Ukrainian farmers need more distributed storage, which will allow not to concentrate large volumes of grain in one place and reduce the risks of crop loss due to shocks.
Small farmers need the most support
Special attention is planned to be paid to farms with relatively small land areas.
According to the Ministry of Agrarian Policy, producers who process up to 50 hectares, together use about 204 thousand ha. Approximately 885 thousand ha accounts for farms with an area of 50 to 200 hectares.
Thus, the total area of land cultivated by these categories of producers is almost 1.1 million hectares.
For small farmers, the lack of their own elevator capacity is particularly critical: they have less opportunity to divert their crops to alternative storage facilities or to finance the construction of new infrastructure on their own.
They can increase the financing of the agricultural sector
During the negotiations, the parties also discussed the possibility of involvement additional financial resources to support the liquidity of agrarian business.
In particular, it is about using the program "Available loans 5-7-9%", which can help producers finance current needs and investment projects.
This is important for farmers, since the costs of growing the crop are incurred long before the time of its sale. If grain cannot be quickly exported or sold due to lack of storage, farmers effectively lose working capital.
The focus is on ports, the Danube and the railway
Support may not be limited to granaries. The World Bank and IFC are also considering development and recovery assistance transport infrastructure.
Among the potential directions are Ukrainian ports, the Danube logistics route and railway infrastructure.
The restoration of objects that have already been damaged by Russian attacks is discussed separately.
Thus, financing should solve several problems at once: harvest storage, its transportation and further export.
Money is needed not only for grain
In the long term, international partners plan to support not only storage, but also modernization of Ukrainian agricultural enterprises.
It is about the construction of new storage and processing facilities, the modernization of production and the development of products with greater added value.
This would allow Ukraine to gradually move from exporting mainly raw materials to increasing its share processed agricultural products, which potentially brings producers more revenue.
The problem already has practical consequences
The lack of storage capacity has already forced Ukrainian farmers to suspend the harvesting of wheat, because there was simply no room for a new crop in the farms.
Therefore, the potential $25 million from the World Bank is not just an investment in elevators. This is an opportunity for the Ukrainian agricultural sector prevent crop loss, support farmers' liquidity and preserve the country's export potential in conditions of unstable maritime logistics.
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