Crimean Agriculture Uncertain Amid Service Disruptions

Vineyards near Ai-Petri mountain in Crimea. Photo credit; Flickr user Anton Zaderaka. Creative Commons license.

Vineyards near Ai-Petri mountain in Crimea. Photo credit; Flickr user Anton Zaderaka. Creative Commons license.

Ukraine shut off the water to Crimea last week in a move that has angered Crimean authorities and hampers Russia’s long-term designs on the agriculture sector on the peninsula.

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Ukrainian authorities blame unpaid Crimean water debts for the shutoff, but the Russian invasion is the more likely reason, according to OOSKAnews.

Even though Russian Minister of Agriculture Nikolai Fyodorov said Russia would pay off the outstanding balance on behalf of Crimea, the supply from the North Crimean Canal remains negligible. This canal normally supplies 80% of Crimea’s water, transporting it south from the Dnieper River in southern Ukraine.

Crimean Prime Minister Sergey Aksyonov called the act a deliberate act of sabotage on the region’s residents. He said rice will be the most affected crop and that authorities are in the process of redefining agricultural land use in areas most severely lacking irrigation and offering new land to farmers and compensation for some farmers for crop losses, according to news outlet ITAR-TASS.

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The move seems to have been unanticipated by Russian authorities.

Prior to the shutoff, Russian Prime Minister Dmitry Medvedev publicly announced in early April that Russia’s first priority in Ukrainian territory was to develop the agriculture sector in Crimea. “We should modernize the agriculture industry both in Crimea and in Sevastopol,” he said, and explained that farmers would be provided with seed, fuel, and equipment.

Russian Minister of Agriculture Anatoly Kutsenko even announced shortly before the shutoff that insurance policies for Crimean farms would be available for purchase from the Russian government in 2015.

Russia has also been planning large-scale irrigation infrastructure development in Crimea. according to Fyodorov.

Any agricultural irrigation program would likely involve transitioning away from dependence on Ukrainian water and toward merging with Russian water supply systems or water independence through new desalination plants in Crimea. Global Water Intelligence reports that RusHydro, a Russian state-owned waterpower company, has been in talks with Voda Kryma, the Crimean water supplier, about the possibility of assuming control of current Crimean water supply infrastructure and modernizing it.

RusHydro Chairman Evgeney Dod said the company is preparing offers for the government to improve the quality and reliability of water supply to the Crimean population and industries. Those offers will be ready in late April to early May, according to OOSKAnews.

Crimean Presidential Aide Andrei Belousov told ITAR-TASS that one option might be for Crimea to join a pipeline that originates in Russia’s southern Kuban region. Medvedev had also been discussing options for construction of a plant with Israeli firms.

Russia had also been planning on investing $1 billion in Crimean vineyards to develop wine production. Crimea has 31,000 hectares of vineyards which the Russian Ministry of Agriculture would have liked to absorb into its government subsidies programs, reports Decanter.com. Prior to the water shutoff, Crimea’s harvest of wine grapes had been predicted to rise 50% by 2017.

But the outlook is different now. The Moscow Times reports that the move will waste $140 million and potentially 120,000 hectares of land, or 30% of the entire agriculture sector, according to the Russian Ministry of Agriculture.

The Ukrainian authorities have drastically reduced the water supply available via the North Crimean Canal from 90 cubic meters per second to 7 cubic meters per second, according to the Digital Journal, and according to some reports, have cut it off completely. Crimea is currently using water reserves from wells and mountain streams, which should supply the territory for approximately five months.

The water cutoff could be just one way of asserting influence over strategic territories. Others might include blocking food, transport channels, or other resources in regions like Transnistria, a Russia-friendly state bordering southwest Ukraine that Russia could also use to attempt to exert further pressure on Ukrainian authorities.

Despite the situation in Crimea, Bloomberg reports that the market is confident that grain exports will not be negatively affected by newly-imposed U.S. and EU sanctions on numerous colleagues of Vladimir Putin and the business entities with which they are associated. The Wall Street Journal reports that traders believe trade in grain will not be negatively impacted because the sanctions are considered weak and small-scale. However, Canada has become the first nation to impose more heavy-hitting economic punishment on Russia, sanctioning two banks in addition to private individuals this week.

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