Alternative logistics solutions aid farmers during the war

AGRI-Ukraine Export Logistics Support
26 March 2024

USAID, through the Economic Resilience Activity (ERA) assists NIBULON, one of the largest Ukrainian agribusinesses and a leader in the grain export market, implement alternative logistical solutions during the war. In order to export grain crops and ensure global food security, USAID ERA has purchased 50 grain wagons for NIBULON, to transport grain purchased from 2600 farms. 

NIBULON works with many agricultural enterprises supplying grain for export, including Nikol, based in Kherson Oblast. For over 20 years, Nikol has specialized in grain and oil crop cultivation. At the onset of the war, Nikol’s facilities were under occupation. Later, after the liberation, the Kakhovka Hydroelectric Power Plant was attacked, and operations ceased again. Thousands of tons of the previous year’s grain harvest were stored in Nikol’s warehouses, but due to the branch’s shutdown, not a single kilogram was exported. This complex situation threatened not only the existence of the enterprise itself but also the livelihood of its employees and the well-being of over 500 families from whom Nikol leases land shares. 

In the summer of 2023, NIBULON resumed operations out of its Zelenodolska branch in Dnipropetrovsk Oblast, a very strategic location for Nikol. Thanks to the 50 grain wagons from the USAID ERA, rail exports became possible. Currently, NIBULON uses these wagons to transport grain, like from Nikol, from blocked river terminals to the ports of the Danube. From the ports, the grain is transshipped onto barges and transported to 25 countries around the world. 

With new grain wagons, NIBULON is able to offer Nikol better prices for grain. This income helps farmers pay wages, taxes, repay loans, and purchase fuel and fertilizers for the upcoming sowing campaign. 

“Thanks to assistance from USAID ERA in 2023, we resumed purchasing grain and continue to collaborate with more than 2600 farmers, which allowed us to export 3 million tons of grain through the Danube ports and the deep-water ports of Odessa within the calendar year. Transporting grain solely by trucks is very expensive. Combining road and rail as modes of transportation allows us to optimize logistics costs and offer farmers procurement prices where they can profit. Otherwise, we would have had to stop grain procurement, close river terminals, and that would mean over 500 job losses,” says Mykhailo Rizak, Deputy General Director for Interaction with Public Authorities at NIBULON. 

USAID ERA supports other agro-exporters too. In 2024, USAID ERA purchased 85 grain wagons for Louis Dreyfus Company (LDC) Ukraine, one of the largest exporters of Ukrainian grain and oilseeds among foreign companies. All 85 wagons have already been delivered to LDC’s elevators. 

The procurement of equipment for agricultural companies takes place within the framework of the Agricultural Sustainability Initiative in Ukraine (AGRI-Ukraine), implemented by the USAID, to mitigate the global food crisis exacerbated by Russia’s brutal war against Ukraine. 

More about the initiative here.