Russia’s blockade of sea and river ports during the full-scale invasion jeopardized the transport of food from Ukraine to world markets.
The Ukrainian agricultural company Nibulon was also impacted by this blockade. The company had built 14 river ports from which they delivered grain to different parts of the world, nine of which are still blocked, while the rest are destroyed or still temporarily occupied.
The farmers who work near these river ports and used them to transport their grain were severely impacted by this situation. They had lost their income, as Nibulon, which is one of Ukraine’s largest agricultural producers and exporters, could not export grain to buyers in different markets of the world.
In Kremenchuk is one of Nibulon’s blocked river ports. Previously, grain was taken from it by barges along the Dnipro River, but now it is taken by railroad cars and trucks. Hundreds of farmers bring grain here.
One of those from whom Nibulon buys wheat and corn is Oleksandr Kovalchuk, owner and manager of the Syroty farm. For more than 20 years, he has been growing grain in Oleksandriia Raion of Kirovohrad Oblast. This year, he has already harvested wheat on 665 hectares of land and will start harvesting corn in a week. The farmer sells 80% of his harvest to Nibulon.
“When the war broke out, the Nibulon branch that buys grain from me and other farmers did not work for some time. There was no understanding whether Ukraine would export grain or whether agricultural exporters would buy grain from us at all, the future of grain export from Ukraine was unclear ” says Kovalchuk.
It was in the midst of such a situation that the USAID Economic Resilience Activity (ERA) helped to implement an alternative solution. At Nibulon’s request, USAID ERA purchased 50 modern hopper wagons, each of which can transport up to 70 tons of grain at a time. They were manufactured at the Karpaty Research and Mechanical Plant (in Lviv Oblast).
It is due to USAID ERA’s support, that one of Nibulon’s nine blocked river terminals has become fully profitable. The 50 hopper wagons can transport 10,000 tons of grain per month, which provides the 120,000 tons of transshipment needed to maintain the elevator’s profitability per year.
Currently, Nibulon uses these railcars to transport grain from blocked river ports to the Danube ports by rail, then transfers it to barges and transports it to 25 countries worldwide.
The reopening of the Kremenchuk branch was good news for farmer Kovalchuk:
“This is very important to me because it is the main source of income for my family, my employees and other shareholders. I use it to pay taxes and help solve municipal problems in my village if necessary. This year, we have already sold over 760 tons of grain – wheat and corn. This is good grain, it is of the 3rd class. This means that the grain can be used for baking bread.”
Kovalchuk has his own grain storage facilities, where he stores his harvest and waits for the price of grain to rise slightly, as it is usually at its lowest during the harvest season. The welfare of 150 other families from whom he rents shares depends on the success of his business.
“For those land owners from whom I rent shares, this is the main source of income. So, they are always waiting to receive money or grain for their (land plot) shares. I am very comfortable working with Nibulon, as they have a modern laboratory where they analyze grain for quality, there are usually no queues for grain acceptance at the branch, and I receive payment for grain on time. This is about consistency in work and reliability of partners,” says the Kovalchuk.
He also runs a mill, grinding grain into flour and churning sunflower oil for the villagers. The prices for these services are much lower than market prices, as this is his social service to help people survive in these difficult times.
From August 2023, when Nibulon received the first railcars from USAID ERA, to the end of September 2023, they already transported more than 13,000 tons of grain. Additionally, river port personnel have secured their jobs – thanks to the creation of an alternative route using railcars – the company has saved 592 jobs. Nibulon continues to maintain international contacts to supply grain to global markets. All this impacts global food security. As the world marks World Food Day on October 16, Ukraine once again proves its global importance in the food supply chain despite the war and all the challenges it poses. And farmer Kovalchuk plays an important role in this.