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15 June 2024

News

27.03.2024

5 Myths about the Ukrainian Agriculture

Ukrainian Agribusiness Club together with UCABevent agency organized an online  discussion “5 Myths about the Ukrainian Agriculture” on the 21th of March during which speakers tried to dispel the most common myths attributed to the Ukrainian agriculture by politicians, protesters and media in Europe.

Key speakers:

  • Alex Lissitsa, President of UCAB
  • Nazar Bobitski, Head of the UCAB EU office
  • Denys Bashlyk, Deputy Minister of Agrarian Policy and Food of Ukraine
  • Olga Shevchenko, Deputy Head of State Service of Ukraine for Food Safety and Consumer Protection
  • Oleksandra Avramenko, Chairman of the UCAB Committee for European Integration

 

Actions taken by the European farmers against Ukrainian agrifood imports are fueled by concerns and misconceptions about possible negative impact the integration of the Ukrainian agricultural sector might have on the European market and European agriculture. This concern is often based on misconceptions about the Ukrainian agriculture, its structure, the way it operates, exports its products and earns its income.

The very first myth, often mentioned by our European colleagues in media and public discussions, is that major part of the Ukrainian arable land is a private property of a few oligarchs.

“This myth takes its roots from the commencement of land reform in Ukraine 20 years ago.  Only  since 2021 the Ukrainian land market has started functioning and during this time we had to dispel plenty of myths: the main one states that if we open the land market a lot of foreigners will enter the market and purchase all land. According to statistics for the last two years not more than 1% of agricultural land is sold per year in Ukraine.

In general, two stages of the land reform are foreseen in Ukraine: first stage since 01.07.2021- land is available for purchase only to individuals, citizens of Ukraine not larger than 100 hectares, the second stage came into effect on 01.01.2024 opening the land market for legal entities registered on the territory of Ukraine with 100% Ukrainian capital, not larger than 10 thous. hectares. Unfortunately, for two years the land market has been working during the full scale invasion and even after opening the land market for legal entities there is no significant increase in sales and figures remain almost the same as it was during the first year of land market operation. Therefore, the most effective way to dispel the myth is to show real numbers of statistics of the State Agrarian Registry: there are 130 000 farmers in Ukraine who cultivate 11 mln ha of arable land, 66 % of them - households (the amount of households who cultivates the area less than 50 hectares dominates),  23 % - legal entities,  11% - small farmers. Hence, the myth that the land is cultivated by big legal entities is a real myth”, - said Denys Bashlyk, Deputy Minister of Agrarian Policy and Food of Ukraine.

The second myth that is supposedly hit the headlines about the Ukrainian agriculture is that the Ukrainian agricultural sector is dominated by large-scale agricultural companies, owned by foreigners.

According to Oleksandra Avramenko, Chairman of UCAB Committee for European Integration, the structure of the Ukrainian agricultural market is very diverse in terms of land bank size: “It includes both small farmers and large farms. In 2021, there were 32.7 million hectares of arable land in Ukraine where only 16% was cultivated by enterprises with a land bank of more than 5 thous. hectares. In Ukraine there are 20 big agricultural companies, they are the biggest, and it is important to note that these companies work only on 10% of the Ukrainian arable land, therefore, in total they have approximately 3.1 million hectares in operation”.

“It should be noted that currently those companies whose share of ownership belongs to foreigners or they are listed on international stock markets are not eligible to purchase land since it could be possible in the third stage of land reform only upon referendum in Ukraine”, - pointed out Oleksandra Avramenko.

The next common myth is that Ukrainian agricultural products are imported into the EU despite their non-compliance with EU food safety regulations.

“Being a practical veterinarian, technician in SPS, I am rather shocked why this issues still arises as a myth, -  noted Olga Shevchenko, Deputy Head of State Service of Ukraine for Food Safety and Consumer Protection. - Speaking about trade of goods and  export, especially of animal origin, there is a huge complex procedure which protects the level of human health. It is food safety in any import requirements first and always the health of the people. We have a great experience in Ukraine in exporting agricultural products to the EU and I can't say it's easy because the market access always stipulates a lot of procedures, compliance with legislation. Considering standards of the food safety parameters to be checked by officials of the European Commission, they are not only checked in paper under the procedure or legislation, they are checked in practice. The way we obtain the right to export animal origin products to the European market takes the level of physical checks by the European Commision of each system in Ukraine in place: physical check of institutions and  laboratories in Ukraine, how we conduct the testing, how we carry out the control, how our officials are aware of the legislation etc. It's a really big and comprehensive system of the state control”.

“Each EU member state has their own Veterinary Food Safety Service, which is an entry point to the European market and conducts checking at the border inspection points when the products enter them as well as exercise inspection on the market in retail. They exercise control under the auspices  of the European Commission, which only establishes the procedures and conducts inspection of member States including how they ensure the control at the border. So SPS is one of the most organized, comprehensive and really complicated systems due to the number of checks, inspections and verifications”, - added Olga Shevchenko.

The fourth myth concerns the theme that Ukrainian agricultural imports drive EU farmers out of business

“The EU is one of the world leaders in production and exports of wheat. In 2023 imports from Ukraine amounted to about 6 mln t - definitely a record, given that Ukrainian seaports were blocked in the first 9 months of 2023. Under these conditions, even a complete ban on the import of wheat from Ukraine will not lead to an increase in prices on the EU market. The same situation also for corn and all the other cereals from Ukraine”, - explained  Oleksandra Avramenko.

Another myth is that Ukrainian agricultural imports destabilize European markets. But if we take the world market for grains and oilseeds, we will see that prices are falling all over the world. “Not only the domestic price on the Polish market is falling. And the Polish market cannot be an exception in this case. It is a game where the world players are playing at the same level and one cannot be blamed”, – stressed Oleksandra Avramenko.

Also, according to Oleksandra Avramenko, European farmers consider poultry, sugar, and eggs to be sensitive products, and Ukrainian imports disrupted the EU internal market. However, the share of imported Ukrainian eggs in the EU consumption is less than 1% (example calculation: 1 EU citizen (out of 500 mln people) will consume only 2 imported Ukrainian eggs during the year); the share of imported Ukrainian poultry in the EU consumption is less than 2% (example: 1 EU citizen will consume 4 packs of 6-piece nuggets produced from Ukrainian poultry meat during the year); the share of imported Ukrainian sugar in the EU consumption is less than 3% (example: 1 EU citizen will drink only 44 cups of coffee with 1 spoon of Ukrainian sugar in it during the year).

Therefore, these amounts are not significant for the EU market and could not influence the market or European farmers.

Finally, Alex Lissitsa, President of UCAB, concluded that many people in Europe forgot that the global agriculture players changed dramatically over the last 30 years: “Countries that used to be exporters and global players, market makers, have now undergone significant changes. It primarily concerns a role of the countries in the European Union. Some completely new players entered the market and one of them is unfortunately russia, which currently accounts for about 30% of global wheat exports. I consider today the European Union and Ukraine have a chance to become cooperation partners and find some kind of compromise regarding how we can together be or become again the global players”. 




  • Baker TILLY
  • Agroresurs
  • AMAKO
  • Limagrain
  • Zeppelin
  • Amazone
  • LNZ Group
  •  Agricom Group
  • horsch
  • uahk
  • Сygnet
  • Syngenta
  • Agco
  • Agroregion
  • Eridon
  • MHP
  • Maschionet
  • Maisadour
  • DuPont Pioneer
  • Agroscop
  • Agrimatco
  • NCH Advisors
  • Continental farmers Group
  • credit agricole
  • claas
  • john deer
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