Why Ukrainian farmers no longer pose a threat to Europe
Agricultural negotiations are not just one of the key, but probably the most difficult part of Ukraine’s preparations for joining the EU.
And not least because of numerous stereotypes.
The belief that immediately after Ukraine joins the European Union, cheap Ukrainian agricultural products will inevitably destroy European farming and simultaneously absorb most of the EU’s agricultural subsidies has become so widespread that it is now seen as self-evident.
Another example of such thinking is an analytical report prepared by the Stefan Batory Foundation (Poland), whose key findings were published by European Pravda.
Read more about the nuances overlooked by the Polish researchers and why European farmers should not fear their Ukrainian colleagues in the column by Oleksii Mohylnyi of the National Scientific Center "Institute of Agrarian Economics": Overcoming bias: stereotypes complicating Ukraine–EU farming negotiations.
The author points out that Ukraine’s agriculture and food sector before Russia’s full-scale aggression, during active hostilities, and in the post-war reconstruction phase represent fundamentally different agricultural realities.
"Almost all comparative (natural and human resources) and competitive (economies of scale) advantages of agriculture, those most frequently mentioned by EU farmers, will no longer play a decisive role, both for objective and subjective reasons," Mohylnyi writes.
He then explains his position.
He recalls that agricultural land has suffered significant destruction. According to the State Statistics Service, the areas under grain, leguminous and industrial crops have decreased by 45% during the years of full-scale war.
Due to lower application of nutrients and agrochemicals per hectare, the yields of major crops have fallen. Climate change also plays a role, as nearly 70% of Ukraine’s territory lies in a risky farming zone.
The economist also notes that the cost of agricultural production inputs has risen to match those in the EU because of wartime risks and for some items even exceeds EU prices (even considering compensation).
Additionally, cheap labour as a competitive advantage is also a thing of the past.
Therefore, in Mohylnyi’s view, after the war ends and Ukraine joins the EU, domestic agricultural producers will no longer have significant advantages over their European counterparts.
"Instead, they will require major investments for the physical restoration of production and logistics infrastructure, for meeting European standards of quality and food safety, and they will face worse lending conditions. It is also quite possible that access to EU subsidies will be limitedб meaning that, at best, they may receive up to 20% of the EU level during the transitional period," the economist notes.
In his opinion, solving this issue in line with market-economy principles is impossible without reforming the EU’s system of agricultural subsidies.
And such a reform has long been overdue.
"Thus, European farmers who stay afloat solely thanks to generous subsidies and other non-competitive advantages should fear not the expansion of Ukrainian products, but the inevitable ‘shock therapy’ that will come with a radical revision of the EU’s Common Agricultural Policy mechanisms," the economist concludes.