The Ukrainian agricultural sector may face significant financial losses during the process of European integration due to the need to abandon about 100 active substances in plant protection products in accordance with European Union standards. Experts estimate that this decision will lead to annual losses of approximately $500 million.
This is reported by Finway
Financial Risks for Farmers
According to the All-Ukrainian Agricultural Council, the annual losses for farmers from reduced yields are estimated at $202.7 million. Additional costs for acquiring new plant protection products will amount to $297.6 million, and their application will cost another $7.6 million. As a result, the profitability of agricultural production may decrease by up to 30% depending on the crop, and the breakeven point will shift, making many farms unprofitable in unfavorable years.
“The reduction in the profitability of agricultural production will be up to 30% depending on the crop. This may lead to a shift in the breakeven point, and in unfavorable years, many farms will operate at a loss.”
Potential Impact of Innovations on Exports
There is particular concern about the impact of European restrictions on Ukraine’s key export crops, such as rapeseed, winter wheat, and sunflower. Medium and small producers, who have fewer financial reserves to adapt to the new requirements, will be the most affected by the innovations.
Currently, bilateral screening meetings are ongoing between representatives of Ukraine and the European Commission within the negotiation section regarding the agricultural sector and rural development. Based on the screening results, a detailed plan for implementing European norms into national legislation is expected to be developed.