strengthen decentralization and transparency by allowing local governments to generate tax and lease revenue from public land for local service provision, and foster mortgage lending, the government had adopted a package of laws that included the lifting of a moratorium on agricultural land sales that had been in place since the early 2000s and that depressed investment and productivity in the sector (Nivyievskyi _et al._ 2021).<sup>7</sup> Between July 1, 2021 when the moratorium was lifted and the start of the war when land markets were suspended,<sup>8</sup> some 0.25 mn. ha of agricultural land was transferred by sale or purchase.

Beyond the broader human and economic toll from the war, agricultural production in 2022 and possibly beyond will be affected by three factors. First, as an estimated 20 mn. ton (t) of maize and wheat from the 2021 crop were still in storage when the war started, the blockade of traditional export routes though Ukraine’s Black Sea ports reduces export revenue and—combined with a lack of fuel and transport capacity—threatens to give rise to depressed producer and elevated consumer prices. Limited capacity of alternative channels for grain export via Poland or Romania and targeted destruction of some grain silos exacerbate this constraint.

Second, direct destruction of land and crops through war-related actions (bombs, land mines, or movement of heavy vehicles) directly reduces the productive potential of agricultural land. Finally, shortages of fuel, inputs such as seed, fertilizer, and pesticides, or labor make it difficult to properly manage winter crops or plant summer crops and will likely be associated with reduced output with small likely to be particularly affected. Taken together, these have a large impact: Aggregate assessments put aggregate direct damages in agriculture at US$ 4.29 billion (Neyter _et al._ 2022b)<sup>9</sup> and estimate indirect war-induced losses in the agricultural sector to amount to US$ 23.3 billion, with logistics disruptions (US$ 11.9 billion) and lower output (US$ 9.6 billion) as main elements (Neyter _et al._ 2022a).<sup>10</sup> Our methodology can provide not only a methodologically sound underpinning for such estimates but also an opportunity to disaggregate them and explore their heterogeneity.

# **3. Data and descriptive statistics**

# **3.1 Incidence and effects of conflict**

<mark>We use two measures of villages’ direct conflict exposure. First, leveraging the high spatial and temporal resolution of Sentinel-2, we rely on comparisons of cloudless Sentinel-2 and Planet satellite imagery in biweekly intervals to identify conflict-related damages to specific fields in the 9 oblasts (districts) directly affected by military action.</mark><sup>11</sup> <mark>Appendix figure 1 provides an example of the front line and damaged fields</mark>

> 7 Zadorozhna (2020) also finds evidence of corruption in land markets, Graubner _et al._ (2021) suggest presence of market power, and Kvartiuk _et al._ (2022) discusses lack of transparency in land auctions used to lease out state land.

> 8 Three laws to govern land relations under martial law (laws 2247-IX; 2254-IX, and 2255-IX were passed on May 12.

> 9 Of this total, about 50% is for land (mining pollution) and unharvested winter crops, 21% for machinery, 14% for stored products, 6% for storage facilities and the remainder for livestock, perennial crops and inputs.

> 10 Output is assumed to fall by 33% for wheat, 32% for sunflower, and 31% for barley; 18% for maize; and 22% for other crops (fruits and berries).

> 11 These oblasts are <mark>Kyivska, Chernigivska, Sumska, Kharkivska, Luganska, Donetska, Zaporizka, Khersonska, and Mykolaivska.</mark>

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