Relief programs help Ukrainian farmers get through first year of war

Two men shake hands while one holds coupons. A woman stands in the middle of the men.

Photo: USAID

Ukraine is one of the world’s top agricultural producers and exporters. The country plays a critical role in supplying food to the global market.

Since 2016, the USAID Credit for Agricultural Producers (CAP) Project, implemented by World Council of Credit Unions, has been supporting Ukrainian micro-, small-, and medium-sized farmers by strengthening the credit union sector in the country to increase access to affordable finance for agricultural and rural businesses.

Although micro and small agricultural producers’ activities are mostly local and modest in scale, they make a great contribution to Ukraine’s food security. Statistically, around 35 percent of the total country’s agricultural products are produced by micro farmers.

Amid Russia’s war against Ukraine, decreasing the financial burden on those producers is a key priority to stimulate their continued operations and ensure food is available for their local communities. To this end, the CAP Project partnered with Worldwide Foundation for Credit Unions (WFCU), the charitable arm of World Council of Credit Unions, and tapped its Ukrainian Credit Union Displacement Fund to launch the $100,000 Partial Agricultural Loan Reimbursement Program.

As a result, 1,354 micro farmers got reimbursed on 10 percent of their principal payments for agricultural loans taken out after February 24, 2022. These types of loans typically average UAH 50,000 (U.S. $1,700).

“For us, rural people, this is significant support. Using the reimbursed funds, I was able to purchase additional fodder for livestock and poultry. I am sincerely grateful for this,” said Tetiana Novyk, the owner of a small farm with 50 chickens and cows, and a member of Credit Union Koriukivska in Chernihiv Oblast.

Chernihiv Oblast is located in the north of Ukraine. It was liberated by the Ukrainian Army in early April 2022, prompting Credit Union Koriukivska to restore its operations and participate in the program.

Another challenge Ukrainian farmers have faced due to Russia’s continued aggression is the increased price of diesel fuel, which is essential for agricultural production. To address this issue, the CAP Project launched another targeted aid program in cooperation with WFCU and Ukrainian national fuel station chain OKKO. $100,000 went toward the purchase of 17,500 gallons of diesel fuel and free fuel coupons were then provided to Ukrainian small- and medium-sized farmers who took out agricultural loans at credit unions that partner with the CAP Project.

One hundred sixty-three farmers with loans through 15 CAP Project partner credit unions were able to access the coupons, allowing them to get the fuel just in time to sow their winter crops. Those farmers are responsible for taking out 30 percent of all agricultural loans issued by Ukrainian credit unions since the start of the full-scale Russian invasion.

“In these difficult times for our country, even under Russia’s constant shelling, Ukrainian farmers continue to operate and care about our food security. As credit unions, we are happy we can support them, not only through the needed finance, but also — thanks to our international partners and friends — to ensure they have diesel for the autumn harvest season,” said Volodymyr Sydorovskyy, CEO of Credit Union Anisia, who provided diesel fuel coupons to 27 member farmers.

This article was originally published by Agrilinks.