War could create perfect storm – UFU

THE ongoing war in Ukraine could have a serious impact on the costs faced by farmers in the North, the Ulster Farmer’s Union has warned.

Writing on the UFU’s social media page, James McCluggage who is the policy manager with the farming body said the war is contributing to a ‘perfect storm’.

“We are appalled at the dreadful situation that the people of Ukraine are facing due to the Russian invasion. The horrendous and unprecedented challenges they are now dealing with, including farm families, is unimaginable,” said Mr McCluggage.

“The impact of the attack on Ukraine is rippling across the world and is causing increasing concern regarding agri-food trade, directly and indirectly. It could seriously affect the cost of production. In particular energy and fertiliser, and ultimately, global food availability and price.

“From a Northern Ireland (NI) farming perspective, the latest international developments are adding to an already tough situation for our farmers. A perfect storm is looming for the United Kingdom (UK) and NI, as 30 per-cent of global wheat exports come from the two Eastern European countries. Russia and Ukraine are an integral part of the global agricultural and food commodity trade.

“A key concern is further increases to input costs on top of already elevated levels, which are depressing on-farm margins to unsustainable levels across a number of farm systems.

“Russia was the second most important destination of EU agri-food exports after the USA, representing 10 per-cent of all EU agri-food exports (c.€11.8bn). Since 2014, when Russian imposed a ban on EU exports following EU imposed sanctions after illegal annexation of Crimea, the EU lost market share and directed increased agri-food exports to other markets.

“Today, Russia is the EU’s sixth largest agri-food trade partner (c.€6.8bn in 2020), and a key import market for essential inputs such as energy and fertiliser.

“Ukraine is a net exporter of agricultural and food products, following an upward trend in recent years. Ukraine makes up just four-point-nine percent of the EU’s total agri-food imports. It is however, the EU’s fourth biggest external food supplier and provides the bloc with c.25 percent of its cereal and vegetable oil imports, including almost half of its corn.

“In 2020, about half of the agri-food imports from Ukraine were food and feed products. One-third food preparations and beverages, and the rest non-edible products.

“Ukraine is the fifth largest global exporter of wheat, with the export of maize also being key to Ukraine – both are important feed ingredients to the livestock sector. Ukraine is among the top three exporters of organic products to the EU. Some products such as poultry meat and offal are not high in value but represent an important share.”

Mr McCluggage also pointed out that Russia is an important global exporter of fertilisers and said he feared, “economic sanctions therefore, could impact global fertiliser availability, tightening already tight balances”.