Ukrainian farmers received EU subsidies without being members of the organisation. They will be given to ‘small’ farms up to 120 ha

Ukraine is not formally a associate of the European Union (EU), but Ukrainian farmers have most likely received backing from this alliance. According to information provided by the Ukrainian Ministry of Agriculture, the European Union has allocated EUR 50 million in support to ‘small’ Ukrainian farmers (up to 120 ha). Farmer portal was the first to draw attention to this issue.

Despite Ukraine's deficiency of EU membership, the Ministry of Agricultural Policy and Food of Ukraine confirms receipt of EU funding.

Karol Olshanowski, an agricultural specialist, informed about this different phenomenon.

“In 2022, the EU transferred EUR 50 million to quasi direct payments to agricultural producers in Ukraine. The aid is granted to a hectare of 3100 hryvnia or to each cattle of 5300 hr. Applies to holdings up to 120 ha or holders up to 100 cows. aid is non-refundable. Interestingly, farms up to 100 ha. are officially referred to as "small". The Ministry of Agriculture of Ukraine estimates that in Ukraine farms up to 100 ha occupy an area of 800 1000 ha (i.e. 2 large holdings e.g. Kernel + UkrindFarming). Will the EU proceed to support Ukrainian farmers?" – he wrote on the X platform on Sunday.

He pointed out that this "modifies the communicative of only subsidizing agriculture in the European Union".

Additionally, the post was accompanied by an article from the Kiev School of Economics, presenting initiatives supporting agriculture by the government in Kiev. According to the article, only in 2018 6 billion hryvnia were allocated to various forms of support for this sector.

Agricultural Farmer.pl portal evokes information of the Ukrainian Ministry of Agriculture of 5 September 2022.‘Support for tiny agricultural producers available in the State Agricultural Register’. “As part of a fresh support programme for tiny farmers in Ukraine of 1.5 billion hrywnia UAH (50 million euro) is adopted in SAR. The programme shall be financed by the budget of the European Union. Under the terms of the scheme, the funds will be allocated to agricultural producers who grow between 1 and 120 hectares of agricultural land and/or store between 3 and 100 cows. The distribution of these funds takes place online through the State Agricultural Register" – indicated.

“Small agricultural producers will usage the support of the European Union to launch a seed run this autumn, buy fodder, repair equipment, etc. For its part, the Ministry of Agricultural Policy created all the conditions for fast and safe payment of aid. Applications will be accepted online through the State Agricultural Register. The decision-making process is simplified, transparent and consistent with European best practice. At the same time, the Ministry is working on expanding support programmes in the State Agricultural Register, which is why I call on all agricultural producers to registry in the strategy and track updates" “The Minister of Agriculture and Food Policy of Ukraine, Mikołaj Solskyi, stressed at the time.

“The proposed support programme is in line with European best practice, in peculiar the EU-wide Production Grant strategy (PSG)” – added in the Ukrainian Ministry's communication.

Farmer.pl notes that in Ukraine a 100-hectare farm is considered small.

The average besides cites calculations by Janusz Wojciechowski, Commissioner for Agriculture of the European Union.

“Agricultural possible of Ukraine (Polish) [Netherlands] – data from 2020. Farm land in million ha: 41,3 (14,4) [1.9] production in million tonnes: cereals – 64,3 (34,9) [1.8], fruit – 2,7 (4.5) [0.7], meat – 2,5 (5,2) [3.1], milk – 9,1 (14,8) [14,4], large animal units (DJP) per 100 ha – 9 (47) [263)," Wojciechowski wrote on Sunday on platform X.

As the EU Commissioner stressed, “if Ukraine had entered the EU with specified a production, it would have been first in cereals, 5th in fruit production, sixth in milk production, and seventh in meat production. Given that entry into the EU = higher production requirements, it will not be easy to improve these places in meat and milk."

Karol Olshanowski commented on Wojciechowski's post. “There are respective factors that can change this state of affairs:
1. If, for example, Kernel had a gross of $3.5 billion (profit over $300 million) it is capital for investment.
2. As for meat production, it is actually fragmented, but MHP itself exported meat for $1.5 billion to 70 countries in 2022.
3. Large agroholdings already invest in animal production, e.g. Astarta has 23 1000 cows and 102 1000 tons of milk produced in 2022.
4. As I wrote Ukrainian agriculture including legal persons benefit from preferential taxation. 5. delight remember that before the war, improvement programmes, e.g. for orchards, were started.
I have a question whether the EU plans to proceed to grant direct payments to tiny enterprises, i.e. up to 120 ha of farms in Ukraine, as was the case in 2022 for an amount of EUR 50 million?" - He said.

In addition, he pointed out that it is crucial to note that prices of agricultural land in Ukraine are low.

“The transaction price of 1 ha of land on the AU [source of the OSH, link below], 1 euro = approx. 40 hryvnia. Average price of 970 euro/ha. Average lease price approx. 70 euro/ha. From 2021, individuals can buy land on the AU. from 01.01.2024 besides legal – limit of 10 1000 ha. The existing strategy is based on lease. For comparison, the price in Poland is PLN 62 thousand, i.e. almost EUR 14 thousand" – he noted.

It is worth recalling the fresh influx of Ukrainian grain into the Polish market, which caused crucial losses to Polish farmers. In June, the Ukrainian side argued that the subsidies granted to Polish farmers related to the increasing export of cereals from Ukraine were incompatible with the WTO rules.

The study of the ultimate Chamber of Control (NIK) shows that decision-makers have underestimated the problem of importing grain from Ukraine, taking late and ineffective action. The crisis had its origin in the statements of agriculture minister Henryk Kowalczyk, who encouraged farmers to keep grain in storage, convincing that by the end of the year its price would increase. NIK points out that this advice was not supported by any analysis and proved to be wrong.

According to the indictment prepared by the prosecutor's office in Rzeszów, from Ukraine 100 tons of “technical” wheat went to Polish mills. The flour from this batch went to the bakery, where at least 300,000 loaves of bread were baked. As a result, “technical” cereals from Ukraine were placed on the tables of Polish consumers. In the course of the investigation, 92 proceedings throughout the country concerning the import of "technical" grain to Poland were merged into one.