Ukrainian farmers need subsidies to ensure competitiveness during European integration

Experts consider European integration to be one of the biggest challenges of the coming year for Ukrainian farmers, which is why agro-industry currently needs subsidies for competitiveness. As reported by a number of mass media, analysts currently recognize that European requirements, in case of their full implementation, will make Ukrainian business uncompetitive in the world. At the same time, as UNIAN notes, the European market is very small for domestic volumes, which became obvious during the blockade of Ukrainian ports by the Russian military.

Because of this, experts believe that in order to maintain competitiveness, Ukrainian farmers should receive subsidies at the level of developed agricultural countries of the European Union. At the same time, the European Union provides subsidies in Ukraine only to small farms that account for less than 10% of Ukrainian land. At the same time, the European requirements for soil restoration, the biodiversity strategy and the environmental strategy significantly increase the cost of production. But at the same time, the main advantage of the Ukrainian agricultural sector in the world is precisely the low price of products.

In general, financial problems were the most significant for Ukrainian farmers this year, and they may continue in 2025. After all, at the moment, even the options for pledges have almost been exhausted, and the losses of the first year of the war are still weighing on farmers. In addition, farmers who left their farms in the occupied territory lost business and found themselves under pressure from banks due to the inability to repay loans. High taxes also add to the problem. Despite all this, Ukraine is returning to the world's largest players in the agricultural market. The country returned to traditional markets, to the countries of the "Global South", as well as to Italy and Spain. In general, the issue of access to global markets became the main issue for Ukraine in 2024.

In addition, international aid plays a significant role in supporting Ukraine in difficult times. In particular, the country received the second tranche under the Ukraine Facility program in the amount of 4.1 billion euros. These funds will go to support the macro-financial stability of Ukraine and the functioning of the state in the period 2024-2027. In total, Ukraine received 16.1 billion euros under this program this year. This is a very important help, because since the beginning of the full-scale invasion of Russia, all of the Ukrainian state budget's own revenues go to finance defense. These expenses occupy approximately half of the budget. Therefore, Ukraine finances all civil expenditures of the state budget at the expense of foreign financial aid — in 2024, the need for such external financing amounted to 38 billion US dollars.