The war has significantly complicated the export of Ukrainian grain and impacted the global food situation. Due to the potential shortage of 50 million tons of agricultural products, which were exported from Ukraine to the world until 2022, the prices of products have risen, leading to food shortages in many countries and resulting in the spread of hunger. On the other hand, the complication to exports jeopardized the existence of farms in Ukraine which have lost the opportunity to sell their products.
The USAID Economic Resilience Activity contributed to the development of alternative export channels so that NIBULON continued to ensure the transportation of agricultural products from 4,500 farms in Ukraine to 75 countries around the world. This allowed the company to operate, pay salaries, and purchase grain from farms dependent on the operation of NIBULON’s grain infrastructure.
One of such enterprises is Nikol farm located in the village of Novovorontsovka (Kherson region). The farm was founded in 2002 and has been specializing in the cultivation of grain and oilseeds for more than 20 years.
“Our cooperation with NIBULON began in 2013 with Kozatska branch,” says Halyna Babenko, director of Nikol farm.
The famous transshipment terminal of Kozatska branch, whose terrible footage of flooding after the explosion of the Kakhovka HPP shocked the world, had a simultaneous storage capacity of 92,000 tons before the war. Its construction marked the first stage of the implementation of NIBULON’s investment project aimed at reviving the Dnipro and Southern Buh Rivers as navigable transport arteries of Ukraine in Kherson region. Before the beginning of the war and the launch of Zelenodolska branch, Nikol agricultural enterprise, which had 3,100 hectares of leased land at its disposal, supplied 100% of grain products, including wheat and barley, to this terminal.
With the occupation of Kherson region and the mining of fields, the production and logistics processes were blocked. Nikol stored thousands of tons of last year’s harvest at its own warehouses, but due to the shutdown of NIBULON’s branch, not a single kilogram could be exported. This difficult situation on the verge of survival threatened the existence of the enterprise itself, the livelihood of employees, as well as the prosperity of the families whose land plots are leased by Nikol. Therefore, the renewal of operation of Zelenodolska branch in July 2023, located in Dnipropetrovsk region close to the production facilities of Nikol, was of decisive importance for the farm. For every regional farmer, the resumption of terminal operations is an opportunity to earn money, pay their employees, pay taxes, and plan the further production process.
“For our region, NIBULON is the most reliable partner and over many years we have accustomed to the established mechanism of cooperation, says Halyna Babenko. Therefore, the resumption of operations at Zelenodolska branch in the summer of 2023 made it possible to restore the logistics process and restore the viability of the enterprise.”
Initially, Nikol farm delivered the 2021 harvest, which they managed to save, to NIBULON. Nikol was unable to harvest the 2022 winter crop due to mined fields, and the sowing campaign was also disrupted. Halyna Babenko emphasizes that the demining process is complex and requires significant resources and time, so last fall the farm was able to sow winter crops only on part of the demined fields. “We are expecting a good harvest in the summer of 2024 and, of course, the continuation of cooperation with Zelenodolska branch,” says director of Nikol.
It is possible to continue exporting grain under conditions of river navigation blockade, because of which 9 out of 14 NIBULON’s river terminals have stopped shipping to water (the rest are destroyed or temporarily occupied), due to cargo redirection from water transport to road and rail transport. The USAID Economic Resilience Activity helped the company to implement this alternative solution. The USAID project purchased 50 modern hopper wagons for NIBULON. Each of them can transport up to 70 tons of grain. Currently, NIBULON uses these wagons to transport grain from the blocked river terminals by rail to Danube ports. Then the grain is transferred to barges and shipped to 25 countries worldwide.
“Thanks to the assistance from the USAID project in 2023, we resumed the purchase of agricultural products and continue to cooperate with more than 2,600 farmers, allowing us to export 3 million tons of grain through the Danube ports and the deep-water ports of Odesa during the calendar year. It is very expensive to transport grain only by trucks. The combination of road and rail transport allows us to optimize logistics costs and offer farmers purchase prices that ensure the profitability of their production. Otherwise, we would have had to stop buying grain and close the river terminals, which would have meant more than 500 job losses,” says Mykhailo Rizak, Director on Government Relations at NIBULON.
Despite the difficult working conditions and regular enemy shelling, Nikol farm is optimistic about the future. “We feel international support. We have fertile land, dedicated people, and NIBULON as a reliable and professional partner,” concludes Halyna Babenko.
Assisting farmers and infrastructure companies is part of the Agriculture Resilience Initiative – Ukraine implemented by the United States Agency for International Development. It is aimed at helping Ukraine increase its potential for grain production, storage, transportation, and export.
The story of cooperation between Oleksandr Kovalchuk – the owner and head of the “Syroty” farm from Kirovohrad region and NIBULON you can read at the following link.
