The breadbasket of the world? Agricultural development in Ukraine

Summary:

The aim of this study is to provide a comprehensive overview of the Ukrainian agricultural sector in the light of the act on introducing an agricultural land market adopted in March 2020, which partially came into force in mid-2021 and will fully enter into force in 2024. It will allow, for the first time in the history of independent Ukraine, the free and legal trade in agricultural land. This will have far-reaching consequences both for local agriculture and for the country as a whole. The development of the agricultural sector, which has already progressed at an impressive rate in recent years, can be expected to accelerate further still. It should be remembered that Ukraine is the largest country in Europe in terms of area (excluding the Russian Federation) and more than half of its territory is covered by very fertile soils. The vast majority of the country has a climate favourable for agricultural production – the land is characterised by a long growing season for plants, plenty of sunshine and no problems with shortages of water for agriculture. The state thus has excellent conditions for this type of economy.

This text covers the period between 2015 and 2020. This time frame has been chosen deliberately, as in the last five years agricultural production, and in particular its export, developed very dynamically and became the most important item in the foreign trade in goods. The second reason for choosing this over any other framework is Russia's military aggression, which led to the annexation of Crimea and Kyiv’s loss of control over part of the territories in the Luhansk and Donetsk oblasts, making it difficult to compare the performance of the agricultural sector in the pre-2015 period. The paper relies heavily on data from the State Statistics Service of Ukraine (SSSU) in the statistical section, and the SSSU and Eurostat in the section on agri-food production exports.

The text has been divided into two parts. The first part focuses on the description of natural conditions and the characteristics of farming the most important cereals, industrial crops, vegetables and fruits, and of breeding. A separate section has been set aside for the description of agricultural enterprises, including one special type – large agri-holdings – and the political influence of their owners. The second part is an analysis of the exports of products of the agri-food sector, both in terms of goods and geographical distribution, with particular emphasis placed on sales to European Union countries and Poland.

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