Agricultural Policy Monitoring and Evaluation 2025

27. Ukraine

Main findings

Support to agriculture

The Ukrainian agricultural sector continues to be significantly affected by Russia’s war of aggression against Ukraine, with policy responses addressing the ongoing wartime situation. Support to agricultural producers in Ukraine, measured by the producer support estimate (PSE), was volatile over the past three decades, mostly due to fluctuations in market price support (MPS). In recent years, however, PSE fluctuations narrowed around small positive values, averaging 2.4% of gross farm receipts during 2022‑24, well below the OECD average.

Over the past decade, Ukraine has recorded predominantly negative Market Price Support (MPS) for oats, rye, and milk, with domestic producer prices generally falling below international reference levels. In contrast, sugar and pig meat have benefited from tariff protection, resulting in positive MPS. MPS and support for the unconstrained use of variable inputs – including loans, which represent Ukraine’s most production and trade-distorting measures, account for just over half of producer transfers in 2022-24. Other budgetary support primarily comes in the form of agricultural tax benefits,1 supplemented by investment grants and targeted payments to farmers impacted by the war.

Support for general services (General Service Support Estimate, GSSE) has historically been below the average of the countries covered in this report, accounting for 0.8% of the value of agricultural production in 2022-24. Most of this support is allocated to inspection and control, which has increased relative to the value of production in recent years. Yet, public spending on agricultural knowledge and innovation system has declined by half relative to the sector’s size, making it one of the lowest across all countries in this report. Expenditure on infrastructure has decreased even in absolute terms, with its share dropping to near zero in recent years. Overall, total support to the sector as a percentage of Gross Domestic Product (GDP), has slightly risen to 0.6% for 2022-24, compared to 0.4% twenty years ago.

Key recent policy changes

To advance preparations for EU membership, Ukraine launched the Strategy for the Development of Agriculture and Rural Areas until 2030, aligning with the EU’s “Ukraine Facility” and focusing on food security, competitiveness, land reform, climate-oriented agriculture, innovation, and rural development through legislative reforms, subsidies, digitalisation, and coordinated institutional action. In support of this strategy, Ukraine has adopted EU-aligned legislation – including on the State Agrarian and Vineyard Registries – introduced digital learning platforms, and implemented new systems like ePhyto certificates and simplified plant variety registration.

In response to the ongoing war, Ukraine introduced ad hoc fiscal and subsidy measures in 2024 and early 2025; first, a new military fee on wages to be paid by farmers and employers to address growing budget expenses; second, targeted support for farms located in conflict zones; and finally, increased funding for a large-scale demining programme aiming to restore agricultural land. In addition, Ukraine implemented an export licensing and quota system to proactively manage export flows. The objective is to support continued access to European markets under the exceptional wartime conditions while preventing the activation of the EU’s safeguard mechanism on tariff-free exports.

To support long-term recovery, Ukraine introduced a new financial security called electronic agrarian notes as a new instrument to expand financing options for agricultural producers. Additionally, to accelerate land reform, electronic auctions were introduced to facilitate the leasing of state-owned land, while land-use regulations were streamlined to attract investment and promote rural economic diversification for the country’s rapid reconstruction.

Assessment and recommendations

• As a major producer and exporter of agricultural commodities, rebuilding Ukraine’s agricultural sector is an essential part of the country’s economic recovery. An end to the war is the most important requirement, but there are immediate measures that the government can already take to make progress. For example, there is an urgent need to continue clearing mines and addressing chemical contamination resulting from combat in agricultural areas. A systematic assessment and monitoring of progress is crucial, not least as a means of attracting international support.

• While international assistance has played a critical role in addressing logistical challenges and sustaining trade flows, domestic investment in key support services such as infrastructure remains historically low and continues to decline. Rebuilding trade and transportation infrastructure damaged by the war is an important way to improve opportunities for farmers to produce and sell their products.

• The suspension of traditional support programmes can be a moment to turn crisis into opportunity. Efforts should focus on helping producers to thrive in a low support environment by proactively pursuing trade opportunities and focusing on other enabling-environment features such as providing more information services for market intelligence, weather forecasting, and a well-functioning financial system that supports risk management.

• As financial resources become available, priority should be given to measures that enhance sustainable productivity, contributing to both recovery and greater resilience to future shocks, such as investments in innovation and knowledge transfer. The newly adopted Strategy and its associated work plan provide a solid foundation to align such investments with clearly defined priorities, helping to manage trade-offs, exploit synergies, and track progress over time.

• The re-imposition of EU quota limits on Ukrainian exports in 2025 underscores the importance of working towards expanded market access. Advancing the Deep and Comprehensive Free Trade Area with the EU and aiming for longer-term access to its markets should be a priority, with an openness to reducing domestic protection on commodities such as sugar and pork.

Development of support to agriculture

Table 27.1. Ukraine: Estimates of support to agriculture

Million USD

	2000-02	2022-24	2022	2023	2024p
Total value of production (at farm gate)	9 619	32 761	34 546	32 333	31 404
of which: share of MPS commodities (%)	86.77	77.63	77.38	76.78	78.74
Total value of consumption (at farm gate)	8 841	22 292	21 590	21 344	23 942
Producer Support Estimate (PSE)	35	700	-610	969	1 740
Support based on commodity output	-432	232	-1 086	659	1 122
Market price support¹	-549	232	-1 086	659	1 122
Positive market price support	388	856	428	966	1 175
Negative market price support	-937	-624	-1 514	-307	-52
Payments based on output	116	0	0	0	0
Payments based on input use	203	164	110	214	168
Based on variable input use	169	146	109	196	133
with input constraints	0	0	0	0	0
Based on fixed capital formation	31	18	2	18	34
with input constraints	0	0	0	0	0
Based on on-farm services	2	0	0	0	1
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	265	304	365	96	450
Based on Receipts / Income	265	247	316	96	330
Based on Area planted / Animal numbers	0	56	50	0	120
with input constraints	0	23	0	0	70
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	0.36	2.37	-1.74	2.97	5.43
Producer NPC (coeff.)	0.95	1.01	0.97	1.02	1.04
Producer NAC (coeff.)	1.00	1.02	0.98	1.03	1.06
General Services Support Estimate (GSSE)	121	270	262	257	292
Agricultural knowledge and innovation system	51	81	88	71	84
Inspection and control	26	165	160	153	182
Development and maintenance of infrastructure	36	14	2	24	16
Marketing and promotion	1	0	0	0	0
Cost of public stockholding	1	0	0	0	0
Miscellaneous	7	10	12	9	10
Percentage GSSE (% of TSE)	76.46	..	..	20.97	14.38
Consumer Support Estimate (CSE)	398	-253	1 009	-574	-1 194
Transfers to producers from consumers	491	-186	1 024	-547	-1 034
Other transfers from consumers	-38	-58	-16	-7	-153
Transfers to consumers from taxpayers	0	0	0	0	0
Excess feed cost	-55	-8	1	-19	-7
Percentage CSE (%)	4.48	-1.49	4.67	-2.69	-4.99
Consumer NPC (coeff.)	0.95	1.01	0.96	1.03	1.05
Consumer NAC (coeff.)	0.96	1.02	0.96	1.03	1.05
Total Support Estimate (TSE)	156	970	-349	1 226	2 032
Transfers from consumers	-453	244	-1 008	554	1 187
Transfers from taxpayers	647	784	675	679	998
Budget revenues	-38	-58	-16	-7	-153
Percentage TSE (% of GDP)	0.41	0.60	0.22	0.69	1.08
Total Budgetary Support Estimate (TBSE)	705	738	737	568	910
Percentage TBSE (% of GDP)	1.83	0.42	0.46	0.32	0.48
GDP deflator (2000-02 = 100)	100	2 886	2 642	3 130	..
Exchange rate (national currency per USD)	5.38	36.35	32.34	36.57	40.15

.. Not available

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Ukraine are: wheat, maize, rye, barley, oats, sunflower, sugar, potatoes, milk, beef and veal, pig meat, poultry and eggs.

Source: OECD (2025), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

The agricultural sector in Ukraine receives support through agricultural taxation arrangements, budget allocations, market regulations, and trade policies. A new framework for the agricultural policies was introduced in November 2024, titled the Strategy for the Development of Agriculture and Rural Areas in Ukraine until 2030, along with the corresponding Operational Plan of Measures for its Implementation in 2025-2027.

Taxation benefits

Agricultural producers are eligible for the Single Tax Regime, a flat rate tax of 0.95% of farmland’s normative value, as established on 1 July 1995 and adjusted since with the general consumer price index. This Single tax substitutes the payment of the profit tax, land tax for land used in agricultural production, and special water use fee resulting in a reduction of the overall tax burden for eligible farmers. Additionally, a minimum tax liability regime, introduced in 2022, requires producers and landowners to ensure their total taxes and social security payments exceed 5% of the normative land value annually.

Budgetary support

Budgetary support for agriculture includes partial compensation for agricultural machinery and equipment costs, matching grants, interest rate subsidies on bank loans along with area- and animal-based payments under specific conditions. The type of support programmes differs for different agricultural sub-sectors:

• Livestock producers benefit from grants for smallholders, interest rate support for livestock husbandry and breeding, reimbursements for farm construction and reconstruction of animal farms and buildings, per-head payments for cows to agricultural enterprises and for young cattle to rural households, and partial compensation for purchasing breeding animals, semen, and embryos.

• Crop producers are supported with grants for smallholders, on-farm investment reimbursements, and debt repayments.

• Processing sites and newly established vineyards, horticulture, and greenhouses can also receive specific matching grants.

• New programmes have been introduced to support smallholders during wartime, assist farmers in war-affected areas, and rebuild irrigation systems (see Recent policy developments section).

In addition, several policy measures have been implemented to clear agricultural lands of unexploded ordnance as a consequence of the war. These include developing a market for agricultural land demining services, where the government covers the demining costs for private service providers who participate in public auctions. Another programme reimburses up to 80% of the demining costs directly incurred by farmers who decide to undertake the demining of their own plots. The National Mine Action Authority, with support from international partners, coordinates these efforts under the Action Plan for the demining of agricultural land, launched in 2023.

Market interventions

To mitigate food price spikes, the government has capped the retail markup for domestically produced food products, limiting them to a maximum of 10%. This measure applies to staple goods such as wheat flour, pasteurised milk, bread, chicken eggs, poultry, and refined sunflower oil, excluding organic products. Additionally, a maximum payment term of 10 days has been established for these and a few other selected domestically produced goods, thereby improving liquidity for commodity producers.

Trade policies

Import tariffs are in place for most agricultural products, with applied Most Favoured Nation (MFN) tariffs for agricultural products averaging 9.1%, above the average for non-agricultural products of 3.6% (WTO, 2024[1]). Most import tariffs are ad valorem, with the exception of raw cane sugar, which has a global tariff rate quota. Since there is usually excess sugar supply in the Ukrainian market, this quota has only been used in 2011 and 2021. Export duties are applied to some oilseeds, live animals, and raw hides. (WTO, 2024[2])

To boost its export volumes and diversify its trade, Ukraine has expanded its network of regional trade agreements (RTAs) since 1995 and is now a party to 19 such agreements. While the initial partners of its RTAs in the 1990s were primarily countries from the region (Eastern Europe, South Caucasus, and Central Asia), more recent agreements have included members of the European Free Trade Association (EFTA) – Switzerland, Iceland, Norway, and Liechtenstein – in 2012, the European Union and Canada in 2017, Israel and the United Kingdom in 2021 (WTO, 2024[2]).

Under its FTAs, Ukraine provides preferential tariff treatment to agricultural products that meet origin requirements, with applied tariff rates being significantly lower than the MFN tariff rate for most agricultural goods. Ukraine offers preferential market access through tariff quotas with duty-free in-quota rates in its FTAs with Canada, the European Union, and North Macedonia (WTO, 2024[2]).

Following the application of the Deep and Comprehensive Free Trade Area (DCFTA) with the European Union since January 2016, and Russia’s subsequent suspension of the Commonwealth of Independent States (CIS) free trade agreement with Ukraine, along with its ban on imports of Ukrainian agro-food products, Ukraine implemented a ban on imports from Russia. This ban now covers 46 agricultural product groups, including meat and meat by-products, fish, milk and dairy products, tea, coffee, grain, baby foods, beer, vodka and cigarettes. Ukraine had also abolished zero import duty rates for goods from Russia. Both measures remained in place through the end of 2024.

Some quantitative restrictions on exports are made through mechanisms such as bans, quotas, minimum export prices and licensing mechanisms for specific products. For example, to prevent shortages in domestic markets during crises like the COVID-19 pandemic and the ongoing war, the government implemented temporary bans on several agricultural products (e.g. buckwheat between April and July 2020, and live bovine animals, beef, rye, oats, and millet in 2023). Additionally, export quotas were imposed on certain goods, such as sugar from July to September 2023, and export licensing requirements were enforced for products including cattle, beef, chicken, eggs, rye, buckwheat, wheat, millet, maize, sugar, and sunflower oil throughout 2023 (WTO, 2024[2]).

In addition, memoranda of understanding are annually established between the government and key stakeholders in the grains markets, outlining maximum export volumes. Although they are not binding, these agreements aim to prevent the introduction of export restrictions, ensure food security, and provide stability and predictability for market participants (WTO, 2024[2]).

Sustainability and climate policies

Ukraine’s National Energy and Climate Plan (NECP) for 2030 includes a target to reduce GHG emissions by 65% from 1990 levels, increase renewable energy to 27% of total consumption, and diversify energy sources. More recently, in May 2024, Ukraine approved a Strategy for the formation and implementation of state policy in the field of climate change for the period until 2035, aimed at establishing the legal and organisational foundations for sustainable development and an effective low-carbon transition, while ensuring economic, energy, food, and environmental security. The same year, Ukraine adopted several laws and plans to advance its climate policy, including the development of an Agricultural Adaptation Plan, the adoption of the Law on the Basic Principles of Climate Policy and the implementation of a National Emission Trading System (NETS) (see next section).

Agricultural land market regulations

The agricultural land market in Ukraine has undergone significant reforms after the long-standing moratorium on land sales, in effect since 2000, was lifted. Starting in the 2020s, Ukraine implemented a series of measures to modernise and liberalise the land market, such as simplifying land documentation, registration, and valuation processes.

As of July 2021, individuals are permitted to purchase up to 100 ha of agricultural land, while legal entities can acquire up to 10 000 ha starting in January 2024, all subject to restrictions on foreign ownership. To qualify for land ownership, individuals must be Ukrainian citizens, and legal entities must be registered under Ukrainian law, with their founders or ultimate beneficial owners also being Ukrainian citizens. Foreigners and foreign legal entities, however, are permitted to lease agricultural land.

Policies for trade and sustainability in agro-food markets

Ukraine is part of two Regional Trade Agreements (RTAs) that include environmental co-operation provisions, with explicit links to agriculture. Those are the Association Agreement between Ukraine and the European Union (hereafter referred to as the Ukraine-EU FTA), which has been in effect since 2017, and the Political, Free Trade, and Strategic Partnership Agreement between Ukraine and the United Kingdom of Great Britain and Northern Ireland (hereafter referred to as the Ukraine-UK FTA), in effect since 2021. Both agreements establish cooperation in the areas of energy, statistics, and agriculture and rural development with explicit references to agriculture and the environment (Frezal and Deuss, 2025[3]).

In both agreements, Ukraine and its trade partners have committed to sharing information and best practices, as well as providing support for regulatory reforms in the energy sector. This contributes to climate change mitigation objectives and includes the recovery and utilisation of methane emissions from coal mines, oil and gas operations, landfills, and the agricultural sector, as outlined in the Global Methane Initiative, in which Ukraine, the European Union, and the United Kingdom are all partners. Ukraine has also committed to co-operating with the European Union and the United Kingdom on agricultural statistics, including agricultural censuses and environmental statistics. The specific agriculture and rural development article in both FTAs emphasise co-operation in promoting modern and sustainable agricultural production, respectful of the environment and of animal welfare. This includes encouraging the use of organic farming methods and biotechnologies, as well as the implementation of best practices in these areas. The Ukraine-UK FTA explicitly references the consideration of climate change in this context.

Ukraine does not have specific domestic trade-related agricultural climate change policy measures. However, due to the significant role of agro-food exports in the Ukrainian economy, domestic efforts to mitigate GHG emissions are frequently aligned with trade promotion objectives. Ukraine is a leading world exporter of key commodities such as sunflower seed oil (ranked 1^st), barley and maize (ranked 3^rd) and wheat (ranked 5^th), and Ukraine’s policy actions regarding GHG emissions in these sectors potentially contribute to the sustainability of international trade and global supply chains for these products.

Ukraine policy in the domain of agricultural climate change mitigation is addressed mainly through whole-economy policy framings. In 2018, Ukraine became one of the first ten countries to release a Low-Carbon Development Strategy, outlining ambitious objectives for reducing GHG emissions. The Law on the Basic Principles of Climate Policy, adopted in October 2024, commits Ukraine to climate neutrality by 2050 and sets 2030 GHG reduction targets. This law aligns with European Union goals and puts pressure on agricultural policies to meet these standards. It also aligns with the EU’s Carbon Border Adjustment Mechanism (CBAM), under which manufacturers and importers are required to report the amount of CO₂ emissions associated with the production of each type of product covered by the mechanism (including cement, iron, steel, aluminium, fertilisers, electricity, and hydrogen).

In the Strategy for climate change policy through 2035, Ukraine planned to implement a national system for trading GHG emissions quotas between 2024 and 2026. The Emissions Trading System (ETS) was incorporated into the October 2024 Law on the Basic Principles of Climate Policy. The system aims to create a structured market for carbon credits and manage emissions. The pilot phase, scheduled for 2026, will include a system for monitoring, reporting and verifying GHG emissions, initially covering industrial sectors, with the potential for expansion to agriculture.

The promotion of climate-oriented agriculture, focusing on both mitigation and adaptation to climate change, is one key objective of Ukraine’s recently launched Strategy for the development of agriculture and rural areas. The Strategy outlines key actions to achieve this goal including environmental protection, promoting sustainable livestock farming, adopting energy-efficient and methane-absorbing technologies, establishing biogas and biomethane production facilities, supporting organic production, utilising biotechnology, reducing greenhouse gas emissions, enhancing biodiversity, developing irrigation systems, and utilising degraded lands for bioenergy crops to prevent further degradation.

Some agricultural companies voluntarily measure their carbon footprint, often to access international grants. There is no government-defined approach for calculating emissions at the farm level. Available methods include the Greenhouse Gas Protocol and Life Cycle Assessment (LCA), both of which help calculate emissions across different stages of production.

Recent policy developments

Domestic policy developments in 2024-25

Starting in 2022 and continuing through 2025, agricultural policy and support mechanisms deviated significantly from pre-war conditions. Many traditional support programmes were suspended, some of which were later relaunched, while new measures were introduced under martial law.

Strategy

The main policy milestone is the launch in November 2024 of the Strategy for the Development of Agriculture and Rural Areas in Ukraine until 2030, along with the corresponding Operational Plan of Measures for its Implementation in 2025-2027. The strategy, developed in line with the EU’s “Ukraine Facility” initiative, focuses on fostering inclusive policies, ensuring food security, increasing competitiveness, improving land use, supporting climate-smart agriculture, modernising the sector, and promoting rural development, and will be implemented through the coordinated efforts of state authorities, local governments, professional and public associations and other stakeholders. The main instruments include legislative regulations, a concessional taxation regime, subsidies and matching grants, minimum export prices, and concessional loan programmes.

This strategy also features the establishment of a national paying agency, enhancement of the agrarian registry, prioritisation of the farm-to-fork strategy, support for land reform, and promotion of digitalisation and climate-oriented transformations. Most of these measures aim to advance preparations for EU membership.

Taxation regime

Significant fiscal measures were introduced in 2024 to address growing budget expenses. Starting in January 2025, farmers under the Single tax regime will pay an additional monthly military fee of 10% of the minimum wage (UAH 8 000; USD 192). Legal entities under the general tax regime will pay a 5% military fee on the total wage bill of employees, alongside current wage taxes and social security contributions.

Budgetary support

The wartime programme, launched in 2022 and suspended in 2023, was resumed in 2024. Smallholders’ subsidies per hectare (up to 120 ha), per cow head (up to 100 heads), and sheep and goats (up to 500 heads) supported over 30 800 farms with UAH 2.8 billion (USD 67 million), and the programme is set to expand in 2025, with a planned allocation of UAH 4.7 billion (USD 113 million).

Subsidies also resumed for smallholder livestock producers, providing per-head cash support for purchased and own-bred cows. For 2025, the government plans to allocate UAH 1 billion (USD 24 million) to expand the productive herd of pedigree cows and partially reimburse the construction and renovation of livestock farms and facilities.

A new subsidy programme was introduced in 2024, providing per-hectare payments to farms located in active (UAH 2 000; USD 48 per ha) and potential conflict zones (UAH 1 000; USD 24 per ha). The programme supported 2 309 farms along the frontline, with a total allocation of UAH 1.6 billion (USD 38 million) and will not be extended into 2025.

The matching grant funding programme for horticulture and greenhouse development, introduced in 2022, supported 78 horticultural and 34 greenhouse farms in 2024, with a budget of around UAH 480 million (USD 12 million), which will be maintained in 2025. Partial compensation of domestically produced agricultural machinery and equipment program was resumed in 2024 and the government allocated UAH 4.2 billion (USD 101 million) for 3 419 farms.

Government support for sprinkler irrigation cost-sharing was increased in 2024, with UAH 39.4 million (USD 950 000) allocated, compared to UAH 8.9 million (USD 215 000) in the previous year. For 2025, UAH 200 million (USD 5 million) has been assigned for the reconstruction and modernisation of irrigation systems. The government facilitated the establishment of 22 Water Users’ Organizations in 2024.

Demining

The demining of territories, particularly agricultural lands, emerged as a key priority for the Ukrainian Government in 2023-2024. The conflict has left large areas heavily contaminated with explosive ordnance, rendering them unsafe for agricultural use and posing significant risks to local populations, with approximately 139 000 square kilometres estimated to be contaminated as of October 2024.

The action plan launched in March 2023 to clear 470 000 ha across nine regions had its target revised in June 2024 to 512 000 ha, with over 316 000 ha surveyed and cleared, and approximately 220 000 ha returned to use in 2024. For 2025, UAH 1 billion (USD 24 million) has been allocated to reimburse up to 80% of demining costs for eligible applicants.

Loans and insurance

Through the Affordable Loans 5-7-9% programme, reduced interest rates continue to be available for agricultural loans. The total amount of funds allocated to the agricultural sector in this programme was UAH 4.9 billion (USD 118 million) in 2024.2 Starting December 2024, beneficiaries must adhere to the World Bank’s social and environmental standards to be eligible, and the government has extended the programme’s current capital financing pillar for agricultural producers until March 2026.

Digital government

In the context of its progress toward EU membership, Ukraine launched three digital learning platforms on agriculture in 2024 to build institutional capacity, including systems for livestock, crops, and grain storage. Additionally, Ukraine has adopted laws to align its legislation with EU digital standards on main agriculture registers such as the Law on the State Agrarian Registry, which includes over 180 000 registered producers and the Law on the Vineyard and Wine Registry, which ensures production traceability. Finally, a new ePhyto certificate system will help facilitate international trade.

The Law on Agrarian Notes introduces electronic agrarian notes as a new financial instrument, in the form of securities (often used by farmers for short-term loans secured by future crops), providing agricultural producers with more accessible financing and expanding their use to livestock producers. These notes, issued electronically, will operate alongside the existing agricultural receipts system, giving farmers a choice between the two to better meet their credit and investment needs.

Land reform has improved land management processes, notably through the launch of a state-owned lands operator, which began operations in October 2024 and facilitates electronic auctions for leasing state-owned lands. The Land Bank platform provides long-term land leases through open auctions, along with state-backed loans, with lease periods varying by land category – up to 14 years for annual crops and 25 years for perennial crops.

Legislative changes

In 2024, several legislative changes were adopted in line with the recently launched Agriculture and Rural Development Strategy until 2030. The Law on the State Agrarian Registry expanded the registry’s functions, making it accessible to processors, exporters, and other market players.

Amendments to certain legislative acts passed in 2024 simplify the registration process for plant varieties, enabling the production and export of varieties not registered in Ukraine but included in OECD Codes and Schemes lists. They also streamline the process for changing the designated use of land plots to attract investments for Ukraine’s rapid reconstruction by facilitating non-agricultural economic activity in rural areas.

International cooperation

In October 2024, Ukraine became the 179^th member of the International Fund for Agricultural Development (IFAD). Ukraine’s membership enhances international cooperation in developing sustainable food systems and provides access to new financial resources, including both grants and loans.

Trade policy developments in 2024-25

In June 2024, the European Union extended zero tariffs on Ukrainian imports, in response to Russian military aggression, but introduced an emergency brake mechanism, limiting Ukrainian exports of certain products such as sugar, poultry, and maize to the average export levels of 2021-2023. In order to avoid triggering the safeguard mechanism, Ukraine agreed to voluntarily introduce an export licensing mechanism and export quotas for these products, distributing those among exporters based on past export data while allowing for new participants.

To encourage exporters to repatriate export revenues in foreign currencies, the Ukrainian Government implemented export regulations in October 2023 for certain agricultural products, primarily seeds, vegetable oils, cereals, and flours. Exporters were required to be verified or licensed, with checks for tax debt, foreign currency repatriation, bankruptcy status, and regulatory compliance. In 2024, the Export Support Mechanism replaced the previous regulations, requiring exporters to be VAT-registered and comply with minimum export prices based on trade specifications and historical data to avoid being banned from exporting. Since 2023, agricultural exporters must repatriate export revenues within 90 days to qualify for VAT refunds, with tax invoices and VAT adjustments based on revenue repatriation. This delay was extended to 120 days from July 2024.

Policy context

Key economic and agricultural statistics

Agriculture plays a substantial role in the Ukrainian economy, in large part because Ukraine has a relatively large area of fertile arable land. The importance of agriculture in the economy has declined over time but remains a key sector representing 7.4% of the GDP, 14.1% of employment, and more than half of total exports in 2023 (Table 27.2).

Following a decline in Ukraine’s GDP of 28.8% in 2022, real GDP recovered somewhat, with an estimated growth of 5.3% in 2023 (Figure 27.3). Even so, Ukraine’s GDP remains below the level observed prior to the war. In 2024, approximately 60% of the state budget went to security and defence, accounting for an estimated 36% of the country’s GDP, according to the Ministry of Finance of Ukraine. The country entered 2023 with record-high inflation of 26%, but managed to bring it down to 12.8%, thanks in part to foreign aid and a good harvest that helped stabilise food prices. However, the Consumer Price Index for food products rose again, increasing from 104.0 to 114.1 by the end of 2024 according to the State Statistics Service of Ukraine.

Weather conditions in 2024 were generally favourable for agricultural production in Ukraine. According to the JRC MARS bulletin, yields for winter and spring crops were close to the five-year average, while summer crop yields declined due to severe drought. In areas not under government control, both cultivated land area and production continued to decrease, whereas arable land in the rest of the country has largely been preserved.

Table 27.2. Ukraine: Contextual indicators

	Ukraine		International comparison
	2000*	2023*	2000*	2023*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	210	622	0.5%	0.4%
Population (million)	50	38	1.2%	0.7%
Land area (thousand km2)	579	579	0.7%	0.7%
Agricultural area (AA) (thousand ha)	41 406	41 311	1.4%	1.4%
			All countries1
Population density (inhabitants/km2)	86	65	52	64
GDP per capita (USD in PPPs)	4 228	17 630	9 368	29 013
Trade as % of GDP	44.1	27.9	12.3	14.9
Agriculture in the economy			All countries1
Agriculture in GDP (%)	14.0	7.4	2.9	3.5
Agriculture share in employment (%)	22.0	14.1	-	-
Agro-food exports (% of total exports)	10.1	61.0	6.4	8.1
Agro-food imports (% of total imports)	6.1	9.6	5.8	7.3
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	59.3	76.5	-	-
Livestock in total agricultural production (%)	40.7	23.5	-	-
Share of arable land in AA (%)	78.6	79.7	31.8	33.3

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Ukraine is among the world’s leading exporters of agricultural commodities, in particular grain products (wheat, barley and maize) and vegetable oils (rapeseed and sunflower). Exports of agro-food products grew steadily from 2015 to 2021, reaching a high of USD 26.7 billion before the war (Figure 27.4). In 2023, following Russia’s full-scale invasion of Ukraine, exports of the country declined to USD 22.1 billion but could be for a large part safeguarded thanks to two initiatives: the Black Sea Grain Initiative brokered with the assistance of Türkiye and the United Nations that allowed Ukraine to resume exports of grain through the Black Sea; and the “Solidarity Lanes” established by the European Union to ensure export of grain and import of essential inputs through continental infrastructure. In 2023, Ukraine established its own maritime corridor to the Black Sea ports of the Odesa region after Russia withdrew from its obligations under the Black Sea Grain Initiative, which allowed for a gradual increase in the export of grain and other goods, as well as a revival of maritime imports. Most agro-food exports are primary and processed products used by industry. European Union countries remain the primary destination for Ukrainian exports, accounting for 52% of total agro-food exports in 2024.

Prior to the war, Ukraine’s total factor productivity (TFP) had improved significantly, rising from negative levels in the 1990s to a positive growth rate that exceeded the global level for the period 2013‑22, at 1.3% (Figure 27.5). During the same period, the use of intermediate inputs and primary factors continued to decline. Overall output growth was close to 0%, well below the global average

Although agriculture’s contribution to the Ukrainian economy has declined, its share of national GHG emissions increased from 8.7% in 2000 to 14.4% in 2023* (Table 27.3). Over the same period, the nitrogen balance per hectare dropped sharply to negative levels (-0.9 kg/ha), likely due to the war’s impact on fertilizer availability and prices. The phosphorus balance is also negative (-3.5 kg/ha), raising concerns about the long-term sustainability of soil fertility. Since the onset of the war, soil health has become a critical challenge, with large areas of agricultural land rendered unusable due to contamination from chemicals and landmines.

Table 27.3. Ukraine: Productivity and environmental indicators

	Ukraine		International comparison
	1991-2000	2013-2022	1991-2000	2013-2022
			World
TFP annual growth rate (%)	-0.3%	1.3%	1.7%	0.8%
			OECD average
Environmental indicators	2000*	2023*	2000*	2023*
Nitrogen balance, kg/ha	23.9	-0.9	32.0	29.7
Phosphorus balance, kg/ha	2.6	-3.5	3.3	2.5
Agriculture share of total energy use (%)	2.1	4.0	1.7	2.0
Agriculture share of GHG emissions (%)	8.7	14.4	8.7	10.1
Share of irrigated land in AA (%)	5.8	6.3	-	-
Share of agriculture in water abstractions (%)	36.8	33.3	47.0	49.5
Water stress indicator	..	..	8.7	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Prior to the 1990s, central planning regulated all sectors of Ukraine’s economy, including agriculture, as part of the Soviet Union. The state administered prices and state enterprises controlled the production and marketing of agricultural inputs and outputs as well as the processing and distribution of food. The first reforms initiating a transition towards a market-based economy began at the end of the 1980s. A limited right to private production was established for land leased from collective farms or individuals, enabling the establishment of private family farms (von Cramon-Taubadel et al., 2008[4]).

However, Ukraine went through an economic crisis in the early 1990s, involving significant economic contraction and inflation that impacted the agricultural sector and resulted in substantial reductions in agricultural output and productivity. Consequently, several trade and price liberalisation policy reforms were reversed in the mid-1990s. Renewed reforms in agribusiness privatisation and collective farm restructuring intensified only after macroeconomic stabilisation in the 2000s (OECD/The World Bank, 2004[5]). While prior to the 1990s, the state owned all land,3 today about three-quarters of agricultural land is private property (StateGeoCadastre, 2017[6]).4

In 2005, the State Agrarian Fund was established as a state-owned public joint stock company (reorganised in 2013). Its initial mandate was to regulate grain prices through intervention purchases, to store grain in state-owned silos and sell it to bakeries to guarantee bread prices, and to provide loans to grain producers. The fund progressively became involved in other activities, such as state purchases and sales of a broad range of agricultural and food products; forward contracts; flour processing and wholesaling; and sales of fuel and mineral fertilisers to producers (OECD, 2015[7]). Starting in 2016, no state funds were allocated to the Agrarian Fund for the purchase of grain, and since 2020 the activities of the Agrarian Fund are excluded from the law that provides support to agriculture. In 2023, the Agrarian Fund was transferred from the Ministry of Agrarian Policy and Food of Ukraine to the State Property Fund.

Prior to the large-scale military aggression of Russia, two key events helped shape agricultural policies today in Ukraine. First, in 2008, Ukraine became a member of the WTO, setting its agricultural bound tariffs at an average of 10.8%, expanding its export opportunities, and contributing to changes in the system of state support for agriculture. Second, in 2014, the European Union and Ukraine signed the Deep and Comprehensive Free Trade Area (DCFTA) as part of their Association Agreement. The DCFTA formally entered into force in September 2017 and involves tariff reductions and duty-free import quotas to facilitate trade between Ukraine and the European Union, including in agricultural and food products.

Other free trade agreements (FTAs) in which Ukraine is engaged include the FTA with the European Free Trade Association (EFTA), in force since June 2012; the multilateral FTA with the Commonwealth of Independent States (CIS), in force since August 2012; bilateral agreements with all CIS members; and the Canada-Ukraine FTA, in force since August 2017.5 FTAs with Israel and the United Kingdom entered into force in January 2021. In February 2022, Ukraine and Türkiye signed a new FTA that is expected to enter into force in 2024. Since 2022, Ukraine has initiated the withdrawal from several CIS agreements, encompassing economic co-operation, trade, customs, among others.

From 1999 to 2016, the state provided significant support based on an agriculture-specific VAT regime. Agricultural producers accumulated in special bank accounts the VAT due on their primary and processed products. The accumulated funds could be used by farmers to cover VAT on purchased inputs, with the residual available for any other production purpose. From 2014 to 2016, this mechanism provided 90% of total state support. In 2017, the Development Subsidy partially replaced this source of support, before the support was phased out altogether in 2018. Other domestic policy measures notably comprised input subsidies, tax concessions, price controls, import tariffs, non-tariff trade regulation, minimum purchase prices, direct state purchases, and preferential loans (Table 27.2).

A moratorium banning the sale of agricultural land was put in place in 2002, although leasing for cultivation was permitted. The moratorium was extended annually until and including 2019. It was not formally extended into 2020. From July 2021, a new law came into force that lifts the ban on the sale of agricultural land and grants individual citizens the right to purchase up to 100 ha of land. Since January 2024, larger purchases of up to 10 000 ha are permitted for Ukrainian citizens and Ukrainian legal entities, including companies, banks and territorial communities. Foreigners do not have the right to buy or sell land in Ukraine.

Table 27.4. Ukraine: Agricultural policy trends

Period	Framework	Changes in agricultural policies
Prior to 1990s	Planned economy	Planned agricultural production, state administered prices State controlled value chain and agricultural trade, including marketing of agricultural inputs and outputs
1990-2000	Transition economy: gradual reforms towards market economy Interrupted by deep economic crisis in the early 1990s	Increased import tariffs for agricultural and processed food products Land reform to allow private ownership Gradual dismantling of centralised marketing schemes Reversal of reforms during economic crisis
2000-2022	Renewed reforms towards an open economy	Reduction of agricultural tariffs following WTO accession Export taxes and quotas for main exported products, successively eliminated or replaced by MoUs State Agrarian Fund (price controls, production controls, marketing, loans, etc.) with market interventions through minimum reference prices and state food purchases successively reduced Sugar production quotas until 2018 Various subsidies for inputs, interest support and tax concessions
2022-present	Period of martial law due to large-scale military aggression of the Russian Federation	Reallocation of agricultural support funds to security and defense Suspension of traditional support programmes Introduction of temporary measures applicable during period of martial law, including tax breaks, food security measures, and simplified regulatory requirements

Due to the negative MPS only partly offset by transfers to producers through tax concessions and other measures, support to agricultural producers was negative for most of the 1990s. While the level continued to fluctuate over the recent decade, it has been closer to zero (Figure 27.6). With little budgetary support to general services or consumers, total support to the sector remained small for most of the past 25 years.

References

[3] Frezal, C. and A. Deuss (2025), “Trade-related measures linked to the environmental sustainability of agriculture: A stocktake and typology”, OECD Food, Agriculture and Fisheries Papers, No. 216, OECD Publishing, Paris, https://doi.org/10.1787/ebfdca09-en.

[7] OECD (2015), Sector competitiveness strategy for Ukraine - Phase III. Review of Agricultural Investment Policies of Ukraine, OECD Eurasia Competitiveness Programme, https://www.oecd.org/eurasia/competitiveness-programme/eastern-partners/Agricultural_Investment_Policies_Ukraine_ENG.pdf (accessed on 20 March 2023).

[5] OECD/The World Bank (2004), Achieving Ukraine’s Agricultural Potential: Stimulating Agricultural Growth and Improving Rural Life, The World Bank, Washington, D.C., https://doi.org/10.1787/9789264055841-en.

[6] StateGeoCadastre (2017), Review of the State of Land Relations in Ukraine, https://land.gov.ua/wp-content/uploads/2017/03/Land-Review-Monthly_3_final-1.pdf (accessed on 20 March 2023).

[4] von Cramon-Taubadel, S. et al. (2008), “Ukraine”, in Anderson, K. and J. Swinnen (eds.), Distortions to agricultural incentives in Europe’s transition economies, World Bank, Washington, D.C.

[2] WTO (2024), Trade Policy Review of Ukraine, https://www.wto.org/english/tratop_e/tpr_e/s467_e.pdf.

[1] WTO (2024), World Tariff Profiles 2024, WTO ITC UNCTAD, https://www.wto.org/english/res_e/publications_e/world_tariff_profiles24_e.htm (accessed on 29 March 2023).

Notes

← 1.  The calculation of budgetary transfers related to agricultural tax benefits has been revised for the years since 2010 to reflect fluctuations in agricultural profits, which influence general tax revenues, as opposed to the more stable revenues from the single tax system. This updated approach more accurately captures the true economic cost to the public budget and has led, for most years, to higher estimates for income-based support and increased PSE values for the 2010–2024 period.

← 2.  Under the programme, the state compensates lenders for the difference between the market interest rate and a reduced rate for clients.

← 3.  Article 3 of the Land Code of the Ukrainian SSR, https://zakon.rada.gov.ua/laws/show/2874%D0%B0-07/ed19920101#Text.

← 4.  More recent estimates suggest that the share of private property in agricultural land is even higher, at 80%: Mykola Solsky (People’s Deputy, Chairman of the Verkhovna Rada Committee on Agrarian and Land Policy), “It’s all about the land”, 2 April 2020, https://www.epravda.com/ua/columns/2020/04/2/658911/.

← 5.  Other members and associate members of the CIS are Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, and Uzbekistan.