The integration of Ukrainian agriculture into the EU single market presents both challenges and opportunities. With careful preparation and support from the EU, the Ukrainian agri-food sector can become a valuable asset and contribute to food security in Europe.
This was the conclusion of the online discussion ‘Ukraine's Agricultural Sector and European Integration: Pathways to the Common Agricultural Policy’, organised by the Ukrainian Agribusiness Club (UCAB).
Of course, on its way to the EU, Ukraine has to fulfil a number of obligations, including in the agricultural sector. For its part, the European Union is studying the potential impact of Ukraine's accession to the EU and how it will affect the Common Agricultural Policy (CAP).

Thomas Hertzfeld, Professor and Head of Department Agricultural Policy, Leibniz Institute for Agriculture and Transformation Economies (IAMO), notes that the EU has experience in integrating new member states with different agricultural sectors, and past enlargements have included adjustments to CAP rules and the gradual introduction of support. 
‘We can draw on the existing experience of how enlargement and the CAP changed at the time, in terms of reforming direct payments to farmers and accommodating different agricultural systems in new and old member states,’ Thomas Hertzfeldt added.

In turn, international experts believe that reforming the CAP with a focus on environmental goals and competitiveness is a possible solution. They also suggest using existing CAP instruments, such as limiting direct payments or targeting support.
‘The CAP is primarily a mechanism for generating income for European farmers. We need to distinguish between this subsidy element and the regulatory element, which is also necessary to address environmental, climate and animal welfare issues,’ said Alan Matthews, Professor of Economics at Trinity College Dublin.

During the discussion of Ukraine's potential impact on the EU's Common Agricultural Policy, the question arose as to the amount of financial support that the Ukrainian agricultural sector could receive.
Before the war, Ukraine had about 42 million hectares of agricultural land. Applying the current CAP rules would mean an average payment to farmers of around €250/ha. Thus, Ukraine could claim about €10 billion annually on this basis alone. Based on Poland's payments, Ukraine could receive an additional €3-4 billion for rural development. The total amount of potential support could reach €12-13 billion per year.
These calculations are based on the mechanical application of the current CAP rules, which may be revised during further negotiations. However, according to UCAB President Alex Lissitsa, the current focus should be on CAP reform and support for Ukraine, not on direct payments to farmers. He suggests focusing on tools that will help businesses survive the war, for example:

1. Trade preferences for Ukrainian products in the EU market.
2. Business support through the Ukraine Facility programme.
3. Instruments for investing in the private sector, such as unsecured loans or private equity funds.
It should also be borne in mind that the structure of the Ukrainian agricultural sector has been significantly affected by the war. Therefore, according to the panelists, the EU accession negotiations should take these changes into account and focus on supporting the recovery and development of innovative agriculture. 
The development of IT solutions and digitalisation will be key success factors for agricultural businesses. 
Companies are already looking for opportunities to invest in agricultural processing to diversify their production. Financial support for businesses, particularly small and medium-sized ones that do not have access to credit, is an urgent need.
Alex Lissitsa states that the war and the destruction of infrastructure have significantly affected Ukraine's ability to export products and deprived it of access to traditional markets. And the lack of electricity can lead to problems with grain storage. Therefore, during the reconstruction process, it is important to take into account the challenges associated with Ukraine's access to global agricultural markets, and cooperation with the EU should help strengthen Ukraine's position on the global market. 

Professor Thomas Hertzfeld says that the impact of Ukrainian exports on EU prices is a complex issue, with global price increases being the main factor. The change in logistics routes after the invasion could have had a short-term impact on prices. He noted that he sees potential for synergies between Ukrainian grain exports and the European processing industry. At the same time, according to Thomas Herzfeld, Ukrainian livestock production may face increased competition in the EU. 
Therefore, different segments of the Ukrainian agricultural sector should be taken into account during the accession negotiations.

Summing up the discussion, the moderator of the event, Head of UCAB EU Office Nazar Bobitski, stressed that the prospect of Ukraine's accession to the EU has stimulated healthy and productive debates within the EU itself on reforming the Common European Agricultural Policy. 

And Ukraine hopes that the results of these debates will help the EU find the best formula for reforms.  

Elizaveta Kotenko. AgroPortal.ua.