Agricultural Livelihoods in the Wake of the Kakhovka Dam Destruction
Executive Summary
In the early hours of June 6, 2023, the Kakhovka Dam on the Dnipro River in southern Ukraine’s Kherson Oblast (province) was destroyed. The subsequent flooding inundated communities downstream with heavily polluted water transporting unearthed mines and unexploded ordinances UXOs. This report looks at the impact of the flooding on small and medium-sized farms in Mykolaiv and Kherson oblasts that were already struggling to deal with the consequences of the Russian invasion, as well as the emerging consequences of the desiccation of the Kakhovka Reservoir in the wider southern Ukraine region and opportunities for aid actors’ interventions. Mercy Corps conducted 21 key-informant interviews in June and July 2023, including 16 interviews with small and medium-sized agricultural producers from the affected territory, four Ukrainian officials at local and oblast levels, and representatives of an NGO providing technical support to agricultural producers.
Prior to the Russian invasion, Kherson and Mykolaiv oblasts were predominantly agricultural regions, with over 250,000 people employed in the agriculture sector. They produced the wheat and other grains that dominate the Ukrainian agriculture sector and were among the leading producers of vegetables in Ukraine. Many households also grew vegetables in private household gardens to supplement their food supplies and generate income. This changed with the launch of the Russian invasion of the region in February of 2022. Agricultural infrastructure was destroyed, and populations fled. Once Russian occupation was established, Ukraine lost access to thousands of square kilometers of agricultural land. While Ukraine was able to de-occupy Kherson oblast on the right bank of the Dnipro River, farmers still faced daunting challenges, notably the inaccessibility of their lands due to contamination from mines and unexploded ordinances UXOs.
The flooding from the destruction of the Kakhovka Dam killed dozens across 46 towns and villages and forced thousands to flee. Much of the region’s agricultural infrastructure, including irrigation systems, was destroyed. Topsoil washed away along with agricultural equipment and inputs. Crops and livestock were lost. Farmers have been left with nothing and lack the financial means to restart their livelihoods, while others lost household gardens and the food security and income they provided.
The dam’s destruction also resulted in the near-total desiccation of the Kakhovka Reservoir. In addition to providing drinking water to towns and cities in Kherson, Zaporizhzhia and Dnipropetrovsk oblasts, the reservoir provided irrigation water to thousands of square kilometers of land. The drying of the reservoir also uncovered the heavily polluted bed of the Kakhovka Reservoir. The newly exposed, largely toxic sand presents an additional threat to agricultural production as strong winds could carry it great distances.
The following broad categories of support were identified as clear priorities for the agriculture sector:
Demining and Removal of UXOs
Rehabilitation of Irrigation Systems and Wells
Access to Financing
Provision of Agricultural Equipment and Inputs
Rehabilitation of Damaged and Destroyed Electrical Systems
Diversification of Crops and Varieties
Diversification of Livelihoods and Support to Relocated Farmers
Introduction
Russia Suspends its Participation in Grain Deal
On July 17, Russia announced it was “suspending” its participation in the Black Sea Grain Initiative. The ultimate effect this will have on global wheat and corn prices is unclear. While this is a worrisome development for global food prices, some analysts believe that this price rise will be temporary, as bumper grain crops in many other parts of the world mean the global supply of grains is still high. Furthermore, significantly reduced grain exports have been the reality since May, when Russia started intensifying the use of its leverage in the deal to greatly reduce grain shipments from Ukraine by delaying vessel inspections in Turkey. These delays have already caused problems for Ukrainian farmers, who have seen grain supplies accumulate in storage facilities. Export capacity overland through Europe is not sufficient to address this problem. Even with a resumption in the grain deal, farmers risk seeing much of this month’s harvest rot in storage facilities or sold at drastically reduced prices domestically. Finally, it is possible Ukraine could attempt to export grain without a deal, though this would likely require financial guarantees to shipping companies, which would see war risk insurance premiums increase immediately with no deal in place.
The destruction of the Kakhovka Dam on June 6 and the subsequent flooding devastated lives, livelihoods and entire communities along the southernmost reaches of Ukraine’s Dnipro River and its main tributary in the area, the Inhulets River. While a precise death toll has not been established, due largely to gaps in the information from the Russian-occupied left bank of the Dnipro, several dozen individuals lost their lives, while nearly 4,400 houses in 46 towns and villages—31 in the Ukraine-controlled right bank and 17 in the left bank—were inundated with highly polluted water. By late June, nearly 4,000 people had been displaced on the Ukrainian-controlled side of the river. As catastrophic as the immediate flooding was for those in the water’s path, the environmental consequences, many of which are still unfolding, will continue to resonate throughout the region for many years to come, affecting core sectors of the regional economy, especially agriculture. This report will examine those consequences, particularly on the agricultural livelihoods of those in and near the affected area and identify key priority areas of support as the local population strives to adapt to its new reality.
Methodology and Constraints
The information this report is based on was collected through a mixed-methods approach. Qualitative and quantitative data were examined through secondary sources of information and primary data collection in the form of key informant interviews. Secondary sources of information were used for extensive desk research and collection of quantitative data from June 26 to July 7, 2023. This research was augmented with 21 key informant interviews with individuals from Kherson and Mykolaiv oblasts (provinces). These semi-structured interviews were conducted with three hromada (district)–level government officials, one oblast-level government official, one civil society representative, and 16 farmers (seven medium-sized producers and nine small-sized producers). The research’s constraints included the inability to disaggregate qualitative data by sex and the lack of availability of government officials due to their heavy involvement in ongoing flood recovery efforts and in some cases, their involvement in preparatory drills for an incident at the Zaporizhzhia Nuclear Plant. Another significant constraint was the lack of information from Russian-occupied territory. As a result, this report focuses on territory under Ukrainian control.
Map of the affected area
Source: Reuters, BBC, June 2023
Background on Agriculture and Economy
Broader Impact on Global Food Security
In the short term, the destruction of the Kakhovka Dam led to a spike in global wheat prices, rising over ten percent two weeks after the dam’s destruction. Since then, however, they have returned to levels seen prior to the dam’s destruction. This is largely due to other mitigating factors, such as stronger-than-expected wheat production elsewhere in Europe and North America. Going forward, it cannot be assumed that stronger-than-expected wheat production elsewhere will continue to mitigate factors that can push prices higher. However, this underlines the fact that, despite the ongoing war in Ukraine, Russia’s erratic behavior regarding the grain deal, and the inevitable decrease in wheat production from the Kakhovka dam’s destruction, there are numerous other factors, most notably global weather patterns, that can impact prices even more than the situation in Ukraine.
While the immediate flooding extended into four districts of Mykolaiv Oblast along the Inhulets River, the bulk of the flooding occurred in Kherson Oblast. Prior to the Russian invasion, Kherson Oblast and its 20,000 km² of agricultural land was considered the “fruit basket” of Ukraine. Kherson’s agricultural produce, and that of the adjacent flood-affected districts of Mykolaiv, was widely available throughout the country and contributed approximately 1.6% of Ukraine’s GDP. Major crops prior to the Russian invasion included food grains of winter wheat, corn, rice, sunflower, vegetables as well as melon crops. Within Ukraine, Kherson Oblast was the leading producer of eggplants (39.6%), watermelons (33.5%), tomatoes (27.7%), peppers (25%) and cucumbers (11%). In Kherson Oblast in 2020, 126,200 people were employed in the agriculture sector.
Prior to the invasion, the food industry was intertwined with the agricultural sector and was traditionally the main employer in the region. According to the official portal UkraineInvest, the food and beverage sector was the most important economic sector of Kherson Oblast (65%), followed by plastics production (11%) and wood and paper production (10%).
Source: Derzhstat, MinAgro, ePravda
In Mykolaiv, prior to the Russian invasion, the agriculture and power generation industries accounted for roughly 90% of Mykolaiv Oblast’s GDP. The oblast provided more than 4% of Ukraine’s grain and leguminous crops, 7% of its sunflower, 6% of vegetable crops (180,000 tons of potatoes, 530,000 tons of vegetables), 1.5% of fruit and berry crops, 8% of grapes, 7% of eggs, and 6.5% of wool, according to oblast officials. The total area of agricultural land in the region was just under 2 million hectares, of which 1.7 million was arable land. An additional 26,000 hectares consisted of perennial plantations, 10,400 hectares were hayfields, and 155,700 hectares were pastures.
Outside of agriculture, the three most significant economic sectors prior to the Russian invasion in Mykolaiv were food and beverages (34.2%), metallurgy (20%), and engineering (12%). The three most exported goods were cereals (48%), inorganic chemicals (21%), and oil seeds and fruits (12%). A local official interviewed by Mercy Corps in Mykolaiv Oblast said that 60% of his village population works in the agricultural sector, others mostly in the retail or public sectors. Many people were employed seasonally, especially in fruit and vegetable production, which are among the most labor-consuming industries.
Source: UkraineInvest, 2022
As is the case throughout Ukraine, a significant percentage of the population in Kherson and Mykolaiv maintain small private gardens. These are used to supplement family diets and, in some cases, earn small additional incomes for households.
Impact of Kakhovka Dam Destruction on Agriculture in Kherson and Mykolaiv Oblasts
Lost Harvest
With approximately 70% of Kherson Oblast still occupied by Russian forces, Ukraine was already destined to lose a majority of Kherson’s usual 2022 winter and spring harvests. Prior to the destruction of the dam, it was thus able to sow only demined areas in the de-occupied territory of the right bank. Though official statistics are not yet available, a few farmers in relatively secure parts of flood-affected areas reported that they were able to harvest some winter crops prior to the flood, though according to the oblast officials, sunflower, barley and many vegetables due to be harvested in mid-June were lost. Those sufficiently far from the flood zone, mostly in Mykolaiv, had access to their harvests. For fields that were flooded, additional planting is out of the question for at least months, and possibly years, as topsoil has been washed away and fields are now contaminated with silt and pollutants directly carried by flood waters.
Moreover, many vulnerable households rely on small gardens to feed their families or generate small incomes in local markets. While most of these individuals have been receiving humanitarian assistance in the immediate aftermath of the Kakhovka Dam’s destruction, the needs of those with contaminated soil and wells will persist for months and likely years.
Destruction of Irrigation Systems
The consequences of the destruction of irrigation systems were addressed by Taras Vysotskyi, First Deputy Minister of the Ukrainian Ministry of Agrarian Policy and Food, who said, “Two main categories of products were grown on the land affected by the destruction of the Kakhovka hydroelectric power station, one of them being vegetables and melons. The second block includes grains and oilseeds: soybeans, corn, sunflower, and wheat. Without a water supply, it is impossible to grow vegetables.” Many farmers are convinced that Kherson watermelons and tomatoes will disappear for many years. Vysotskyi added that in some cases, grains and oilseeds will shift to extensive agricultural techniques, which utilize fewer inputs, and less equipment and irrigation, though they produce lower yields and are highly dependent on climate.
In Mykolaiv Oblast, 350,000 hectares of irrigated land were left without water in the immediate aftermath of the flooding. However, the agricultural company Agro-Dilo managed to restore water supply for much of this area. The pumping equipment and auxiliary electrical equipment of the main pumping stations of the Inhulets and Yavka irrigation systems were preserved. While this was a positive development, the Inhulets River, which flows south into the Dnipro River below the Kakhovka Dam, has high salt levels. The irrigation system is thus designed to dilute Inhulets water with water from the Dnipro River. Currently, there is water, but there are concerns that the Dnipro River downstream of the dam could become shallow, and this water will not be enough to dilute the Inhulets water going forward. Furthermore, tests conducted in the days following the dam’s destruction showed that the Inhulets River exceeded permissible levels of ammonium nitrogen, iron, and suspended solids.
In both Kherson and affected parts of Mykolaiv Oblast, the decimated irrigation systems were the most frequently voiced concern by farmers, with drip irrigation systems, underground systems and canals all destroyed or in disrepair. A representative of the Kherson Farmer’s Association added, “With no irrigation, the harvest will be affected. Usually, we’re producing 8 tons from 1 hectare. Now I expect it to fall to 3–4 tons. Corn, soy, vegetables do not grow without water. I don’t see any alternatives. Well-sourced waters will not cover the need of farmers.”
Moreover, occupation and shelling have also damaged the local irrigation network. According to a representative of Chornobaivka Hromada in Kherson Oblast, “There was a big agricultural player from Mykolaiv Oblast that restored irrigation system for our fields from Inhulets river two years before the full-scale invasion. Now, due to occupation, shelling and mining, this system does not function.”
Lost and Destroyed Infrastructure, Equipment and Inputs
“Banks don’t want to provide lending. No one even wants to lend—only very good friends who have money.”
Farmers also cited lost and destroyed equipment as a critical problem, as well as lost inputs, such as seeds, fertilizers and pesticides. The market is generally functioning, according to many of the farmers interviewed, but farmers that have lost everything are not able to obtain financing. The Kherson Farmers Association representative added, “[Farmers have] almost no access to finance as the only option is to take out loans. However, the farmers, including me, have lost so much equipment and so many assets that we have nothing to use as collateral.”
“Storage facilities were destroyed. I buy fuel, but it’s expensive. I’ve had to borrow from my cousin. Fertilizers are also very expensive, while the purchase price of the crops fell drastically.”
The destruction of other agricultural infrastructure is also severe. According to a medium-sized farmer in Mykolaiv, who has been identifying the most urgent agriculture needs in her community, farmers are asking the local administration to help with damaged and destroyed facilities. She emphasized that destroyed storage facilities and agricultural machinery are very critical for the processing industry as well, so it should be a priority to renovate these. A farmer in Mykolaiv commented that “because many vegetable storages were bombed, there is no way to store crops. So, farmers are selling production straight away.”
Farmers also lamented the destruction of electrical systems in much of the flood-affected area as a priority concern. This will negatively impact farms of all sizes, as electricity is necessary for everything from cold storage to pumping irrigation water.
Decreases in Purchase Prices
Farmers also cited a drastic decrease in the purchase price at which they could sell their crops to traders. This is due to traders compensating for increased logistical expenses by decreasing the amount paid to farmers. Some farmers interviewed indicated that they and other farmers are sometimes not even selling their crops because of this. The owner of a medium-sized farm in Mykolaiv noted that the price of one ton of barley fell from last year’s $190–$220 to $60–$70. Right now, she is not planning to sell. She is waiting for a higher price, as current prices are not profitable.
Challenges to Livestock Farmers
“Very few farmers have seeded, so there is a scarcity of animal food and the one available is very, very expensive”
Livestock farmers face challenges as well. Those in flood zones saw the destruction of their facilities, and many of their animals were killed in the floods. Challenges extend to livestock farmers outside the flood zones as well. Livestock farmers indicated that there is a scarcity of animal feed in Mykolaiv due to last year’s poor harvest, making the feed that is available very expensive. Another problem, one that predates the destruction of the Kakhovka Dam, cited by a livestock farmer in Kherson, is a lack of veterinary services due to the departure, in this case, due to mobilization, of veterinary service providers.
Mine and UXO Contamination
All the while, the challenges the agriculture sector faced prior to the destruction of the Kakhovka Dam have not gone away. The de-occupied communities of Mykolaiv and Kherson oblasts remain heavily mined. In Mykolaiv Oblast, 754,000 hectares, or 30% of the region’s territory, still need to be surveyed for mines. This includes about 288,000 hectares of agricultural land. While in Mykolaiv Oblast, agricultural fields are now prioritized for demining, in Kherson Oblast, most efforts are still focused on settlements and critical infrastructure that have not yet been fully checked. As of July 2023, only 8% (56,600 hectares) of the de-occupied territories of Kherson Oblast had been demined out of 680,000 hectares. As a result, many farmers and their employees have taught themselves demining techniques and are taking on the hazardous task themselves. A medium-sized farm operator pointed out another challenge related to the territory’s previous occupation. “It is hard to find a tractorist who would agree to work as even after demining; there were accidents. So, farmers have no option but to drive a tractor at their own risk.”
Risks Associated with the Desiccation of the Kakhovka Reservoir
In addition to the impact on Kherson and Mykolaiv due to flooding, the desiccation of the Kakhovka Reservoir, which has lost 80% of its volume according to the Ukraine Environmental Ministry, has decimated water access to a vast swathe of territory in southern Ukraine. The most urgent impact of this has been the loss of access to technical water and drinking water, with almost 1 million people in Dnipropetrovsk, Kherson and Zaporizhzhia oblasts facing a lack of access to water categorized as “severe” or “catastrophic” according to initial findings from an assessment conducted by REACH. Bottled and trucked water is being delivered to many communities in the area, while the government has begun the construction of a system designed to provide, at least in part, a more durable solution to the crisis.
There are fewer immediate means of support for the damage inflicted on the region’s irrigation systems. Three of the four major irrigation pipelines that serve the area are completely nonfunctional due to the decreased water level. According to the Ministry of Agrarian Policy and Food, 94% of irrigation systems in Kherson Oblast, 74% in Zaporizhzhia Oblast and 30% in Dnipropetrovsk Oblast have been rendered useless. According to the government, the affected irrigation system previously provided 600,000 hectares of agricultural fields, producing two million tons of grain annually. Moreover, occupied Crimea is also heavily reliant on the southern canal system that crosses Kherson.
Lost Agricultural Production
Nationwide, 10–14% of the total vegetable harvest is at risk due to flooding and soil drainage in Kherson, Zaporizhzhia and Dnipropetrovsk oblasts, according to the National Bank of Ukraine, a figure that includes areas under occupation by Russian forces. Due to the inability to irrigate land in the south, Ukraine will lose about 2 million tons of various types of agricultural products annually, equivalent to $1.5 billion, an analyst from the Ukrainian Agribusiness Club told UACAT.
Reservoir Bed Contamination
Another looming threat is the presumed high level of toxins in the dried soil of the reservoir bed. Silt deposits now exposed to the surface environment have accumulated decades’ worth of hazardous substances from discharges of agrarian and industrial operations along the reservoir and the Dnipro River. These can be transported by wind and impact both health and agriculture. Even without the toxins, increased dust can harm soil fertility, damage crops, and cause premature snow melt.
Priority Needs in the Agriculture Sector
Humanitarian assistance continues to be necessary for many people impacted by the destruction of the Kakhovka Dam. However, it is increasingly necessary to shift the focus to medium and long-term interventions that will allow for the resumption of agricultural activities and increase community resilience going forward. Given the scale of need in the wake of the destruction of the Kakhovka Dam, many opportunities for such interventions may seem obvious and immediate. However, with much of the environmental impact still coming to light, it will be important to continue monitoring the situation and ensure any program interventions pursued remain relevant. Environmental impact assessments that meet all government and donor requirements, particularly regarding soil and water testing and any decrease in groundwater due to additional wells, will be vital. Mines and UXOs, whether newly transported by flood waters or predating the flood, present a high risk for any agricultural activity, and their clearance must be a priority for the relevant governmental and nongovernmental agencies.
That said, the following broad categories of support are clear priorities for the agriculture sector:
Rehabilitate Irrigation Systems and Wells
The lack of clean water for irrigating crops represents the greatest threat to agricultural livelihoods. While significant large-scale interventions will be necessary in many cases, there will also be a need for smaller irrigation canals and systems to be rehabilitated at the village level. Smallholder farmers that utilize wells to irrigate are now finding their wells contaminated by flood water, while many outside the immediate flood zone could see their wells rendered useless by falling groundwater levels. Support in digging new wells for irrigating smallholder plots, provided this is in compliance with environmental regulations, could be appropriate in many cases and address food security concerns in a more sustainable manner, transitioning many away from humanitarian assistance.
Facilitate Access to Financing
Improved access to financing will expedite the recovery of the agriculture sector. For medium-sized farms and some smaller-scale farms, especially those which have maintained or restarted a significant level of production since the invasion, facilitating linkages with existing financial service providers could be appropriate, with loans applied to the myriad of purchases and repairs necessary in the wake of the Kakhovka Dam’s destruction. That said, repayment risks to financial providers and farmers would have to be properly assessed. For smallholder farmers, especially those who rely on small plots to ensure their food security, grants might be more appropriate.
Facilitate the Provision of Agricultural Equipment
Where improving access to finance—allowing farmers to address their own concerns—is not feasible, facilitating access to agricultural equipment could achieve similar results. According to the second Rapid Damage and Needs Assessment by the World Bank, the Government of Ukraine, the European Union and the United Nations as of February 2023, the war has resulted in total damage of $8.72 billion for the agriculture sector. The damage to machinery and equipment was the largest source of total damage (53%), followed by stolen inputs and outputs (23%) and damaged storage facilities (15%). Even prior to the destruction of the Kakhovka Dam, 70% of agricultural enterprises in Kherson Oblast were damaged or destroyed. This problem has now been exacerbated for farmers in Kherson and Mykolaiv, many of whom saw equipment lost or damaged beyond repair by the flood waters.
Facilitate the Provision of Agricultural Inputs
Another area of focus, in cases where improving access to finance is not feasible, is facilitating access to necessary inputs. This will help the farmers who lost everything to restore their operations, as many have been left with depleted savings. Even farmers who have managed to restart some level of production are typically not operating at full capacity, given that their financial resources are limited. Facilitating access to additional inputs can help them increase productivity and operations.
Rehabilitate Damaged and Destroyed Electrical Systems
Electricity is a vital component to agriculture and the flooding has caused even more destruction to an electrical system already damaged by the war. While in some cases, large-scale works are required for electrical systems, in other cases, electricity can be repaired or improved with the purchase of transformers and support with other smaller-scale, local repairs. Without reliable electricity, incomes will suffer.
Diversify Crops and Varieties
Though not specifically tied to the destruction of the Kakhovka Dam, Ukraine’s shifting agricultural landscape since the start of the full-scale invasion means farmers’ previous crop choices may no longer be appropriate or profitable. Adapting to changes in market dynamics since the start of the war, and potential future changes on the horizon, could necessitate farmers to diversify their crops and enter new markets. Such changes to longstanding ways of operating may require access to information and technical training and consultations with relevant advisors, as farmers may lack the relevant technical knowledge and business skills. Outside agencies could play a role in facilitating access to technical and market information.
Diversify Livelihoods and Support Relocated Farmers
Some farmers will be unable to cultivate their land for many years. This may lead to additional population movements, as they will be unable to support themselves in their current locations. Supporting livelihoods diversification away from farming where appropriate and feasible (i.e., for those closer to urban areas) could allow some to remain in the area. Meanwhile, farmers who choose to relocate will require financing support as well as technical and business advice if they are to succeed in their new locations.