Local markets as an important element of food security

Introduction

We have written repeatedly about food security, the role of shortened food supply chains, and the need to develop local and regional food markets. 

The war has shown the vulnerability of various sectors of the economy to russian attacks. The occupation of territories where ore and coal were mined, the destruction of mines, and the collapse of metallurgy and heavy engineering, as well as strikes on power generation facilities and substations, have not only reduced various sectors of the Ukrainian economy but also significantly worsened the quality of life, especially in large cities. 

Even more catastrophic for the people could be the collapse of food supplies. In the first months of the war, the Russians destroyed many of the largest wholesale food warehouses around Kyiv, several poultry farms (8 million chicken were killed), pig farms in the Kharkiv region, and dairy farms in the Sumy and Chernihiv regions. A significant part of agricultural land is occupied, and some of it is mined or contaminated with explosive objects.  

Despite this, Ukraine does not seem to have any food problems. There is plenty of food, it is varied and can be purchased in large retail chains, but this is not the case everywhere and may not be the case in the future.

Domestic market and imports 

Ukraine still retains its status as a major agricultural country, with exports of agricultural products and food accounting for about 59% of total exports. This is a very large share, which shows that our economy has been greatly weakened by the war, with exports of industrial products declining significantly.

In essence, the agricultural sector today generates the lion’s share of foreign exchange earnings, which are much needed for the country’s defence.

However, it is worth looking at the trends in food production in Ukraine against the backdrop of the ongoing war.

Table 1. Production of basic food products (for domestic consumption)

As can be seen from the table, there has been a significant decline in production across all major food categories:

• The dairy industry has been hit hardest: reduction in cow numbers, problems with energy supply and logistics.
• Vegetables and potatoes: lower yields, occupation of part of the southern regions (Kherson, Zaporizhzhia).
• Buckwheat: traditionally a scarce crop, production fell by almost a third in 2023/24.
• Meat and eggs: decline due to the destruction of poultry and pig farms in frontline regions.
• Cereals (grains for domestic consumption): the decline is less severe because part of production has been reoriented from export to the domestic market.

The situation with milk and meat looks most alarming. It is not possible to quickly increase the production of milk and beef and pork, so the inertia of the decline will be felt even if attempts are made to increase livestock numbers right now. In reality, the situation here looks better overall due to poultry farming, which, after a disastrous 2022, was able to increase livestock numbers and production.

The decline in food production is partially offset by imports.

Table 2. Imports of basic food products in 2020-24

• 2020/21: Imports were stable, with fish, fruit and meat being the main items.
• 2023/24: Imports increased by ~10% (to ≈ 3.9 billion USD in the first half of 2024).
• Geography: over 50% of supplies came from the EU (Poland, Germany, Italy, Spain).
• Reasons for growth: destruction of agricultural infrastructure, reduction in domestic production, energy supply problems.

Comparing Tables 1 and 2, we can see a correlation: the decline in domestic production needs to be compensated for by imports. In the context of continuing energy terrorism, port blockades and attacks on railways, conditions may arise in which such imports become expensive and very difficult, creating additional threats to food security in Ukraine as a whole and in individual cities in particular.

What should be done in a situation of continued war and threats to food supplies?

The simple answer to this question is to develop domestic production of various food products and create opportunities for all producers, from large to small, to access the domestic market.

Unfortunately, the situation is much more complicated in reality. Moreover, different local and regional food markets have different starting points for better representation of local producers in their local markets. 

Problems:

Problem 1. Retailers and small producers

Most food products in large and medium-sized cities are sold by large retailers in large retail chains. For such chains, a prerequisite for access for producers/suppliers is a large volume of products, uniformity, and adherence to the delivery schedule. 

Small producers cannot meet these conditions. And if they do not have access to these chains, their products are not available to local consumers. 

Problem 2. Structure of local agriculture

Producers of basic food products are not always available within easy reach of large and medium-sized cities. They are simply not produced, or are produced in insufficient quantities.

Problem 3. Lack of information networks that easily connect producers with direct consumers of products

In many areas, producers have no market for their products at a time when consumers are unable to buy them. In the digital world, small producers remain largely excluded.

Problem 4. Local authorities are still not concerned about the risks of food supply in the context of escalating military action

The relatively stable food supply during the last four years of war creates the impression that this will always be the case. The lack of measures to support local producers and simplify their access to local markets is exhausting their capabilities, leading to a reduction in local production, and in conditions of logistical crisis, it will be impossible to compensate for the loss of external food supplies. 

What is happening in Europe?

Climate change, trade disputes between the US and the EU, and the war in Ukraine are disrupting the usual trade and supply of various types of food products. Food security is becoming a problem for many and is already becoming a critical political priority for individual states, cities and regions.

This is not surprising, as years of global trade and economic specialisation in different countries and regions have led to many parts of Europe becoming critically dependent on food imports. 

This is prompting local authorities in various cities in different countries to formulate new local policies to protect agricultural land around cities from excessive development and to revive farmers’ markets, recognising that the capacity to produce food within communities/municipalities is part of the “critical infrastructure” that has been neglected in recent years. Growing and processing food locally is becoming a must. 

The growth of local markets for locally produced food is seen as a promising opportunity to increase the resilience of food systems and communities/municipalities in general. 

The European Union’s policies and priorities include the idea of short food supply chains (SFSC) – direct links between producers and consumers that strengthen the local economy, reduce environmental impact and increase resilience in times of crisis. 

Therefore, local food security and short food supply chains have pan-European support and prospects for development in the territorial communities of Ukraine, where there are still a number of small producers focused specifically on local markets and self-supplying their products to consumers. 

Instead of a conclusion:

Ukraine is at war, and the first years of full-scale invasion have revealed the vulnerability of various sectors of the economy and, at the same time, demonstrated the advantages of small food producers in adapting to wartime conditions. The occupation and loss of key territories where traditional vegetables and melons were grown led to a collapse in production in 2022, followed by a significant recovery in 2023 in other regions. The Victory Gardens initiative, the distribution of seeds among households, assistance to small farmers in preserving their harvests, the formation of communal markets and mobile trade, and the emergence of locations for craft products in the stores of large retailers all contribute to short food supply chains.

With the war continuing and Ukraine’s European integration underway, this trend is likely to develop and intensify.

The Civil Society Institute, together with partners from Poland, Latvia, Lithuania, Estonia and Sweden, is launching a project aimed at supporting the development of CLSPs under the leadership of the Swedish Institute for Agricultural Development.

Our task is to create conditions for partnerships that would become the basis for food security in local communities and regions through the development of local food production and its sale to local consumers. 

“Support your own, for what is yours” takes on new meaning in the new circumstances.

Afterword: This material is for informational and educational purposes only.  To remain strong in the face of a war that has turned into a protracted war of attrition, we must ensure the food security of every family, every community, every city and every region. This is how the food security of the state is achieved. Our next step will be to develop a methodology for assessing food sustainability in territorial community and to develop local policies to strengthen such sustainability. 

This material has been prepared as part of the project Organisational and IT-supported models for growing local food markets for food security in the Baltic Sea Region and Ukraine.

The SFSC4FoodSec project is a transnational initiative led by the Swedish University of Agricultural Sciences (SLU) and funded by the Swedish Institute. The project is implemented in partnership with SLU (Sweden), IsoTech (Poland), the Civil Society Institute (Ukraine), the Latvian Rural Forum (Latvia) and Vytautas Magnus University (Lithuania).