Ukrainian farmers will adapt to the requirements of the European Union in 10 years

Taras Vysotskyi, the First Deputy Minister of Agriculture of Ukraine, believes that in order to adapt to the rules of the European Union, Ukrainian farmers need a transition period of 10 years. In his opinion, the integration of Ukraine into the European Union system is not only the costs and the need to adapt to new requirements, but also the possibility of access to investments, markets, and joint programs.

The official notes that currently the Ukrainian side mostly focuses on what experience in agricultural activity is already practiced by the European Union and where Ukrainian farmers will need to harmonize with the current rules. But the unique survey in demining, cleaning and restoration of soils should be a separate large-scale case at the level of the entire EU to determine the ways of financing and overcoming this challenge. As for other sectors, where there are already clear rules of the game, one of the most controversial is the use of pesticides. Currently, the Ministry understands the reality that the list of available plant protection products today in Ukraine and in the European Union is different. Therefore, at a certain point, Ukraine will have to approach the unified rules of the European Union. Atom should have a transition period that should last at least 10 years and this is the first starting point in the negotiations with Europe.

If we talk about the possibilities of the agricultural sector of Ukraine, then its export for 2024 made up 59% of the total export of Ukraine and was worth $24.5 billion. Compared to 2023, foreign exchange earnings of the agricultural sector from exports increased by more than $2 billion. But this is only the second "historical record" in terms of foreign currency earnings - the first best year was 2021, when the agricultural sector earned $27.7 billion thanks to a high harvest.

If we consider the general structure of Ukrainian exports, last year the European Union remained Ukraine's key trading partner. In addition, almost 50% of all imports to Ukraine are goods from the EU. Also last year, Ukraine renewed the free trade agreement with Norway, Iceland, Liechtenstein and Switzerland — countries of the European Free Trade Association. Therefore, this year Ukraine will focus on finding a solution for access to the EU market for sensitive agricultural products (corn, cereals, bran, honey, sugar, eggs and poultry meat). Outside the EU, Ukraine's key trade partners in exports in 2024 were China ($2.3 billion), Turkey ($2.1 billion), Egypt ($1.6 billion) and India ($986 million) with Moldova ($935 million).

We will remind that the agricultural sector remains the most powerful branch of the Ukrainian economy, which employs about 17% of Ukrainians and produces 19% of GDP and generates more than 70% of foreign exchange earnings. Therefore, currently, experts consider European integration to be one of the biggest challenges of the coming year for Ukrainian farmers. Because of this, agro-industry currently needs subsidies for competitiveness. And analysts admit that European requirements, in the 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. In general, financial problems were the most significant for Ukrainian farmers last year, and they may continue in 2025. At present, even the options for pledges have almost been exhausted, and the losses of the first year of the war are still weighing on the agrarians. In addition, farmers who left their farms in the occupied territory lost business and were 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 significant help, because since the beginning of the full-scale invasion of Russia, all of Ukraine's own state budget revenues have been used to finance defense. These expenses occupy approximately half of the budget. Therefore, all civilian expenditures of the state budget are financed by Ukraine at the expense of foreign financial aid — in 2024, the need for such external financing amounted to 38 billion US dollars.