Ukraine in the EU – the end of the Common Agricultural Policy? 

To build support for Ukraine’s EU accession across Europe, the key policy implications of Ukrainian membership need to be discussed in a clear and inclusive manner.

One step in this direction is to dispel some of the myths that generate worries in some member states about the social and economic implications of Ukraine joining the European Union, not least in the sphere of agriculture. 

As one of the world’s largest grain exporters, and with agricultural land the size of Italy, Ukraine is perceived as a threat by many farmers in the EU.

The Common Agricultural Policy (CAP) accounts for around one-third of the EU’s budget and makes a significant contribution to farm incomes across the EU.

There are fears that Ukrainian farmers would receive large agricultural subsidies immediately on accession, thereby diverting funds from existing member states. There are also fears that Ukraine might not adhere to as high standards of food safety and environmental protection as other EU member states, leading to unfair competition and pushing prices down on the internal market. 

While Ukraine’s membership would impact the EU’s agricultural sector, five points indicate how the effects might be alleviated and managed.

Rebutting five myths

First, implementing transition periods to limit Ukrainian farmers’ access to full CAP subsidies, as when Spain joined the EU in 1986, could balance out the costs of integrating Ukraine into the common agricultural market over time. For a certain period after its EU accession, Ukraine would be granted a smaller CAP share compared to existing member states. This could allow Ukraine to gradually adjust to EU standards while at the same time reducing immediate strains on the EU budget. 

Second, the EU could introduce capped payments that limit the share of CAP funds that a member state or individual farm would receive. Mandatory capping has been discussed by the European Commission as a means of coping with Ukraine’s accession. 

Third, large Ukrainian agro-holdings might not even qualify to receive CAP funds. The current CAP features a redistributive payment scheme that caps direct payments to large farms. Moreover, many companies in Ukraine’s agricultural sector are competitive and do not need subsidies to continue their businesses, reducing the likelihood that CAP payments will be diverted away from existing member states. 

Fourth, in order to meet EU standards to join the single market, Ukraine would need to implement reforms on food safety, water quality, nature protection, animal welfare and pesticide use. These reforms are likely to increase production costs in Ukraine, which reduces the risk of unfair competition. 

Fifth and last, internal competitive pressure within the EU could be eased by channelling Ukrainian agricultural products to third markets, where Ukraine is already well established. These food exports would also make the EU a stronger player in the global food market. 

And some opportunities

In addition to the above points, it should be noted that Ukraine’s EU accession offers opportunities for the EU.

Over 71 percent of Ukraine is agricultural land and 56 percent is arable land, making the country the world’s largest exporter of sunflower oil, the third largest exporter of barley, the fourth largest exporter of maize and the fifth largest exporter of wheat.

Ukraine’s agricultural industry could reduce Europe’s dependence on imports of agricultural products and strengthen the EU’s food security. 

Furthermore, regardless of the outcome of Ukraine’s EU accession process, it will be necessary to reform the CAP to increase productivity.

Previous EU enlargements involving countries with large agricultural sectors have led to reforms of the CAP; for example, a second pillar of the CAP dedicated to rural development was created in anticipation of the 2004 enlargement.

This time, Ukraine’s EU integration could generate the necessary impetus to move ahead with reforms, which could benefit the EU as a whole.

This year, we turn 25 and are looking for 2500 new supporting members to take their stake in EU democracy. A functioning EU relies on a well-informed public – you.