Ukraine's near closure of the North Crimea Canal will devastate the region's agriculture and cost Crimean farmers up to 5 billion rubles ($140 million), according to Russia's Agriculture Ministry.
"The harvest will be partially or fully lost across 120,000 hectares of farmland that should be irrigated [by water from the canal]," Agriculture Minister Nikolai Fyodorov said Thursday, PRIME reported.
Russia will compensate farmers for some of these losses, but not all, he said.
The North Crimea Canal funnels water 400 kilometers from the Dnieper River in southern Ukraine to Crimea and provides more than 80 percent of the peninsula's water supply, which has few water sources of its own.
Earlier this month, Ukraine cut the flow of water through the canal from the normal spring level of 90 cubic meters per second to 7 cubic meters per second — the lowest technically feasible volume. Kiev justified the decision by pointing to Crimea's outstanding debt on water supplies.
Russia annexed Crimea from Ukraine in March, and Ukraine has accused Russia of stirring up unrest in the country's eastern provinces.
Russia offered to make advance payments to Ukraine for water, but authorities in Kiev have refused to play ball, Fyodorov said. "We are going to lose the irrigated crops this year. Maybe not 100 percent, but the greater part." Half of the 120,000 hectares at risk are vineyards, he said, and 30,000 hectares are sown with rice.
It will take years to solve Crimea's water supply problems, Fyodorov said. A number of options are under consideration, including a water pipe across the Kerch Strait from the Kuban region in southern Russia, tapping underground water and desalinating sea water from the Black Sea.
Agriculture makes up around 10 percent of Crimea's economy, which in 2012 was worth $4.3 billion, according to the Crimean Economic Development and Trade Ministry. Losses of $140 million due to a bad harvest would wipe out over 30 percent of the region's agricultural sector.