Ukraine prepares grain-backed loans to help farmers avoid distress sales

The Ukrainian government is preparing an affordable financing program for farmers affected by the suspension of exports through the Greater Odesa ports, preventing them from selling grain at economically viable prices. The announcement was made by Taras Vysotskyi, Ukraine’s Minister of Agrarian Policy and Food.

Under the proposed program, farmers will be able to obtain loans using their harvested grain as collateral. The financing is intended to help them fund the autumn planting campaign while avoiding the need to sell grain at heavily discounted prices.

According to Vysotskyi, the suspension of the country’s main seaborne export route has created a significant oversupply of grain on the domestic market, pushing procurement prices sharply lower. The Ministry of Agrarian Policy is currently working with the Ministry of Economy, the Ministry of Finance, commercial banks and representatives of the agricultural sector to finalize the mechanism before submitting it to the Cabinet of Ministers.

“We must urgently introduce an affordable financing program for agricultural producers to support the upcoming planting campaign. Farmers will be able to secure financing against their stored grain, get through the current crisis and avoid selling their crops at prices well below international market levels,” Vysotskyi said.

The minister also stressed that key inputs for field operations remain available. Most seed is produced domestically, crop protection products continue to arrive via overland routes, while fuel and fertilizers are being imported through alternative supply channels.

According to the Ministry of Agrarian Policy, Ukraine’s agricultural sector has sufficient resilience to withstand the current situation for several months. However, by November the country could face a shortage of grain storage capacity if maritime exports are not restored.

Vysotskyi noted that the Greater Odesa ports normally handle around 90% of Ukraine’s exports of grains, oilseeds and processed agricultural products. Alternative routes by rail, road and through the Danube ports currently cannot provide even half of the required export capacity. As a result, more than 27 million tons of agricultural products could remain in Ukraine unless seaborne exports resume.

Tags: Ukraine, export, grain, prices, restrictions, credit