It's not that the war in Ukraine made farming impossible in the country.

But due to the invasion of the Russian army, almost everything is missing.

Requests from Ukrainian farmers for “fuel, seeds, fertilizers, pesticides, veterinary medicines and agricultural machinery” were recently on a list sent to EU agriculture ministers.

Jonas Jansen

Business correspondent in Düsseldorf.

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Figures from the UN Food and Agriculture Organization (FAO) show how important Ukraine is for food globally: Russia and Ukraine together have accounted for around 30 percent of global wheat exports and around 20 percent of corn exports in the past three years.

In March, the war was the main reason why world market prices for wheat rose by 19.7 percent compared to the previous month.

Corn prices rose similarly, up 19.1 percent, while barley and sorghum also hit record levels.

export at risk

“The situation is quite worrying, as we are observing a complete breakdown of supply chains in some cases.

So it's not just getting less or more expensive," says Nikolaus Lang, who, as a senior partner of BCG for companies, is currently examining the global distortions in the supply chains.

Because even the seed that will be planted in the coming weeks and harvested later cannot – as of now – be exported properly, since many ports in the Ukraine have been destroyed and sea routes blocked by Russia.

Switching to trains brings relief, but that only accounts for about a twentieth of other ship transports.

"The first price increases caused by the war were mainly due to fear," says Lang.

“The price explosion for nickel, for example, reflected purely expected values.

However, this could last longer, especially in agricultural production.”

Already tense nutritional situation

This in turn also alarms large German companies.

"Indeed, we view the current development with great concern because we already had a highly tense global food situation before the invasion of Ukraine.

However, this has now dramatically worsened,” says Frank Terhorst, who is responsible for strategy and sustainability as a divisional board member in Bayer’s agricultural division.

The pharmaceutical and agrochemical group has just donated corn seed with a sales value of 3.5 million euros to Ukraine - but the Dax group is promoting larger-scale partnerships between governments, other companies and organizations such as the United Nations.

"For example, wheat inventories that many countries have created could be at least partially released," says Terhorst.

In addition, it is important to ramp up production in other important wheat-growing regions, particularly in Western Europe and North America.

Bayer is therefore appealing to the EU Commission to give farmers in the EU the flexibility to grow grain or wheat.

"Especially in Germany, we have a responsibility that goes beyond feeding 80 million people," says Terhorst.

"And that with the privilege of having the best soil for it - but the areas have to be released for this."

In Germany, at least, there has recently been a setback, as the Bundesrat approved the proposal by Federal Minister of Agriculture Cem Özdemir (Greens) to only slightly relax nature conservation rules in agriculture.

According to this, farmers are not allowed to grow grain on land that is not cultivated for nature conservation reasons.

The so-called growth may only be used as animal feed.

Reserves planned

Even if Bayer has a vested interest in having as many agricultural areas and thus buyers of seeds and pesticides as possible, the advances of the Dax group are remarkable.

A company like Bayer could sit back and relax in the face of high prices due to the tense situation on the agricultural markets.

But that doesn't go far enough.

"In our own seed production, we experience the same challenges as farmers do, because seed is not produced in factories, but directly on the field," says Terhorst.

"Of course we are planning reserves to cover additional demand, but we cannot ramp up production enormously in the short term either."

The current crisis also shows how the responsibility of industrial companies through research is likely to be even broader in the long term.

"We see no contradiction between sustainability and food security, on the contrary," says Terhorst.

“But that is only possible with agricultural innovations.

For example, with plants that are better able to meet the demands of climate change.” However, this also requires regulatory debates in the European Union, since this is about genetically modified corn seed.

Such innovations are, of course, long-term visions; in the short term, the aim is to support the agricultural production that is failing.

“The second wave in agricultural markets will be massive cost hikes because importing countries will run out of grain,” predicts BCG supply chain expert Lang.

"And then I fear a third wave because around 30 percent of global fertilizer exports come from Russia, Belarus and Ukraine."

If there is a lack of this for the next cultivation periods, says Lang, there are two options: you pay more and continue to use the same amount - or you use less fertilizer and accept lower yields.

Bayer is researching alternatives to the synthetic production of fertilizers.

"These are very interesting topics that have become even more dynamic due to the topicality," says Terhorst.

This is shown by the fact that a lot of gas is needed to produce fertilizer.