Ukrainian agriculture: From Russian invasion to EU integration

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Series Details PE 760.432
Publication Date April 2024
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Ukraine enjoys excellent conditions for agriculture, including around a third of the world's most fertile land. Three crops dominate the country's agricultural production: wheat, maize and sunflower, intended primarily for export. Medium-sized agricultural enterprises lead crop production, although some companies farm as much as 500 000 hectares. This is a direct consequence of Soviet collectivisation, and the agricultural policies adopted after Ukraine's independence in 1991. Only recently did Ukraine start opening up its land market. In 2013, Russia blocked Ukrainian exports to prevent Kyiv from developing closer ties with the EU. Following Moscow's illegal annexation of Crimea and its military aggression in eastern Ukraine, Kyiv signed an association agreement with the EU, which became its primary market. Unlike most of its industrial production, Ukraine's crops remained competitive in the EU market and exports surged. By 2021, agriculture represented 41 % of Ukraine's exports, up from 27 % in 2013. In addition to stealing millions of hectares of land, Russia has inflicted a terrible economic, environmental and human cost on Ukraine. By the end of 2023, the Ukrainian agricultural sector had sustained an estimated US$80 billion in damages and losses. Rebuilding Ukraine's agriculture is expected to cost US$56.1 billion, and demining will cost an additional US$32 billion. Russia also blockaded Ukrainian agricultural exports. The EU Solidarity Lanes, the Black Sea Initiative, and the more recent Ukrainian Corridor have helped to keep Ukraine's economy afloat, and avert a wider global food security crisis. Ukraine applied for EU membership shortly after Russia's full-scale invasion. In December 2023, the European Council authorised the opening of accession negotiations with Ukraine. Historically, agriculture has been a contentious issue in most enlargement negotiations, and integrating Ukraine's sizeable agricultural sector poses a challenge to the EU, especially without prior reform of the common agricultural policy. Despite the early stage of Kyiv's candidacy, some studies have tried to estimate the potential cost and benefits to the EU of Ukraine's eventual membership of the bloc.

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