Ukraine’s Small Farmers Can Survive One Lost Season, Not Two, PrivatBank Warns

Losing one sowing and harvest season means a farmer cannot plant, grow, harvest, and sell a normal crop during that cycle. The farmer loses expected sales income, but may still keep operating by using reserves, selling stored goods later, or restructuring loans. The next planting becomes harder because cash has not been replenished.

For example, PrivatBank managers said many farmers are storing leftover grain and using reserves to repay loans and prepare for sowing. If crops cannot be sold through blocked ports, the farmer may have no fresh revenue when fuel, lubricants, and other planting costs arrive. Loan payments then compete with production needs.

The bank’s risk officer said missing one export season would leave the situation “quite acceptable” because typical small farmers are under-leveraged. Missing a second sowing season would be much more serious. It would weaken production and create a significant industrial impact, especially if the blockade continues.

Small farmers are more exposed because they generally have less control over storage, processing, and export logistics. They typically sell crops soon after harvest to traders. When the Black Sea corridor is blocked, traders may offer lower prices, or sales may become impossible. That quickly removes the cash farmers need for loans and the next planting.

Large agricultural holdings have more options. According to PrivatBank, they have refocused on processing oilseeds and exporting their own produce while the corridor is blocked. Mid-sized and large businesses are also riding out the season using their own reserves. These tools give them more time than small producers.

The logistics chain is now 2.5 times narrower, and small farmers’ crops are among the main risks. Alternative routes cannot carry the former export volume. PrivatBank is therefore preparing restructuring, loan extensions, payment deferrals, concessional lending, and international risk-sharing tools for exposed farmers.

Ukraine’s agricultural export capacity has fallen because most farm goods previously moved through Odesa’s seaports. The Kyiv Post reported average agricultural exports of 4–4.5 million tonnes per month, with about 90% going by sea. The blockade has sharply reduced the route available for these shipments.

Railways and the Danube currently handle about 2.5 million tonnes monthly. Together, they could potentially reach 3.5 million tonnes per month. Compared with the previous 4–4.5 million-tonne average, current alternative capacity is short by roughly 1.5–2 million tonnes each month.

PrivatBank’s risk chief described the logistics chain as 2.5 times narrower. The shortfall especially threatens grain and produce from small farmers, who often sell soon after harvest. If the sea corridor remains blocked, unsold crops and discounted sales will continue to reduce working capital and put the next sowing at risk.

Farmers normally sell harvested grain to generate cash for loan payments, fuel, lubricants, and the next planting. When ports are blocked, grain may remain stored or sell only at a discount. The farmer’s assets still exist, but usable cash shrinks. This is a working-capital problem, not necessarily an immediate collapse.

PrivatBank said clients are using reserves to repay loans and prepare for sowing. Yet farmers whose harvest is unsellable or discounted are short of working capital when February through April financing needs arrive. Their reserves must cover both debt service and operating costs, so each season becomes harder to finance.

The bank has approved restructuring, loan extensions, and payment deferrals for farmers unable to sell crops over autumn and winter. It monitors commodity stocks and clients’ track records. If the blockade lasts until the end of 2027, executives warned that reserves could be depleted, increasing the risk to future planting and loan repayment.

Larger agricultural companies are coping by controlling more stages between harvest and export. Instead of selling all crops immediately, they can store produce, use reserves, process oilseeds, and arrange sales through their own trading operations. This gives them more flexibility when port access is restricted.

PrivatBank executives said mid-sized and large agribusinesses are riding out the season on their own reserves. Larger holdings have also refocused on processing oilseeds and exporting their own produce while the Black Sea corridor is blocked. Their scale and internal operations help them keep working despite slower logistics.

Small farmers usually sell soon after harvest to large Ukrainian or international traders. They therefore have fewer ways to delay sales or add value to crops. The difference explains why small producers face the greatest risk, even though the overall export disruption affects agriculture, metallurgy, and construction.

Ukraine’s main alternatives are rail routes and Danube ports. They provide a way to move farm goods while Russia’s blockade restricts the Black Sea corridor. These routes are important because agriculture previously depended heavily on seaports, especially Odesa’s ports, for exports.

The scale gap is the central problem. Ukraine had been exporting an average of 4–4.5 million tonnes of agricultural products each month, and about 90% moved through seaports. Rail and Danube routes currently handle about 2.5 million tonnes monthly. Their potential is about 3.5 million tonnes, still below the former average.

That shortage leaves grain and small farmers’ produce most exposed. Goods may remain stored or sell at a discount, reducing farmers’ cash. The narrower logistics chain also limits traders’ ability to buy crops and makes it harder to finance the next sowing. The alternatives help, but cannot fully replace the corridor.

Working capital is the money a farm uses to keep operating between spending and receiving income. Farmers need it to buy fuel, lubricants, seed, and other inputs for planting. They spend this money before the next harvest is ready to sell. Crop sales then replenish the cash and support loan repayment.

A blocked export corridor interrupts that cycle. Grain may sit in storage or sell below normal prices, so the farmer receives little or no cash after harvest. PrivatBank said farmers are short of working capital because harvests are unsellable or discounted. At the same time, fuel and lubricant prices have risen and may climb further.

The bank is preparing new financing for February through April, when farmers need funds for the next campaign. It is also offering restructuring, extensions, and payment deferrals. These measures can preserve operations temporarily, but executives warned that reserves may run out if the blockade lasts through the end of 2027.