Bridging Agricultural Gaps in Conflict: The Success of Ukraine’s Digital Support Programs

A study by the World Bank explores how Ukraine’s Producer Support Grant program, using satellite imagery and a digital farmer registry, provided critical financial relief to small farmers during the war, though long-term challenges remain. The findings highlight the potential of digital tools to improve aid targeting in conflict zones.

A study by Klaus Deininger and Daniel Ayalew Ali from the World Bank's Development Research Group explores how agricultural support programs can be effectively targeted in conflict zones, with a focus on Ukraine’s 50 million dollar Producer Support Grant (PSG). Using satellite imagery and a digital farmer registry called the State Agrarian Register (SAR), the research assesses the impact of these grants on small and medium farmers during the Russian invasion of Ukraine. By applying a difference-in-differences design and using data from 2019 to 2023, the study sheds light on how this innovative combination of technology and administrative tools helped mitigate the negative effects of the conflict on agricultural productivity. The PSG program, supported by the European Union, was designed to provide immediate financial relief to farmers facing significant challenges due to the war, such as blocked export routes, loss of access to fertilizers, and damaged infrastructure. By targeting smaller, often credit-constrained farmers, the grant program aimed to prevent decapitalization and liquidation of farms that were vital to Ukraine’s food security.

Agriculture Disrupted by Conflict

When the war started, Ukraine’s agricultural sector, which contributes about 10% to the country’s GDP and 42% to its exports, was hit hard. Traditional export routes were blocked, fertilizer supplies from Russia were cut off, and many farms were located in areas of active conflict. The situation was particularly dire for small and medium-sized farms that lacked the financial reserves to cope with such shocks. To address this, the Ukrainian Ministry of Agriculture launched the SAR in August 2022, a digital platform that allowed farmers to register their land and apply for support programs like the PSG. The SAR platform linked to administrative data from Ukraine’s land cadastre and property registries, enabling the government to verify farm sizes and ensure that the grants were directed to eligible recipients. This system was critical in a context where physical movement was restricted, and traditional governance structures were weakened by the ongoing conflict.

Modest Impact but Critical Relief

The study’s findings show that the PSG program significantly increased the area of land cultivated by farmers, although the overall effect size was modest. The impact was most pronounced among the smallest farmers, especially those located near the frontlines of the conflict. These farmers, who were most likely to be financially vulnerable, benefitted from the program as it helped bridge short-term financial gaps. For larger farms, especially those farther from the conflict zones, the grants were not as effective in addressing long-term financial needs. The research highlights the need for more comprehensive support, including leveraging the SAR platform to help farmers access credit markets and diversify into higher-value crops. While the PSG was instrumental in providing working capital, its scope was limited in terms of fostering significant investment in agricultural infrastructure or long-term productivity improvements.

Digital Solutions for Rapid Assistance

One of the key strengths of the SAR system was its ability to rapidly register farmers and distribute aid in a transparent manner. By the end of 2022, over 86,000 producers had signed up for the platform, with the number growing to 150,000 by mid-2024. This level of digital engagement was unprecedented, especially in a country where many small farmers had historically operated in informal, cash-based economies to avoid taxes. The SAR system’s interoperability with land and property registries made it a powerful tool for both targeting and evaluating agricultural support programs. However, the study notes that despite the program’s success in reaching vulnerable farmers, the amount of financial support provided through the PSG was far below what was needed to fully meet the demand for credit. Many farmers, particularly those farther from the frontlines, expressed interest in obtaining larger loans for investment purposes but struggled to access these due to the limited size of the grants and ongoing credit market constraints.

A Blueprint for Conflict Zones

The research also points to the broader implications of using digital platforms like SAR in conflict settings. By combining satellite imagery with administrative data, the study was able to evaluate the real-time impact of the PSG program on land use, something that would have been difficult using traditional survey methods in such a volatile environment. This approach allowed the researchers to observe the effects of the program on a granular level, identifying which types of farms benefitted most and where additional support might be needed. The study suggests that this model could be replicated in other conflict or crisis settings, offering a way to deliver targeted support to small farmers in areas where traditional governance structures may be weakened or absent.

Long-Term Challenges Remain

While the PSG program provided critical short-term relief to Ukraine’s small farmers, it was not sufficient to address the broader, long-term challenges facing the country’s agricultural sector. The war has had a devastating impact on Ukraine’s ability to produce and export agricultural goods, and while digital tools like the SAR offer a promising way to deliver aid more effectively, additional measures will be needed to help farmers recover and rebuild. These include expanding access to credit, encouraging diversification into higher-value crops, and continuing to develop the digital infrastructure needed to support a more resilient agricultural economy. The study offers valuable lessons for other countries facing similar challenges and highlights the potential of combining technology and policy to address the complex issues arising in conflict-affected agricultural sectors.