The Ukrainian government is expanding support programs for the agricultural sector in frontline and war-affected regions, focusing on preserving production, stabilizing farmers’ incomes, and assisting businesses that have been forced to relocate.
This is reported by Finway
New Mechanisms for Risky Agricultural Zones
During an off-site meeting of the “Government and Business Dialogue” platform in Kramatorsk, representatives from the government, regional military administrations, banks, and agricultural enterprises discussed ways to expand support for the agricultural sector. Special attention was given to developing a mechanism for risky agricultural zones that will take into account both climatic conditions and the consequences of hostilities, including proximity to the front line and land contamination.
For such areas, state support will be introduced in the form of fixed payments per hectare, funded from a separate targeted fund. It is expected that the first payments to farmers will be made this summer after the necessary resources have been accumulated.
Financial Assistance and Business Development Incentives
The government plans to partially compensate farmers in the 20-50 kilometer zone from the line of combat for land rental costs and tax burdens to reduce the risk of production halting. A separate compensation mechanism is being developed for landowners whose land is used for defense infrastructure, which will involve systematic solutions at the legislative level.
For businesses that have relocated their production facilities, changes to the legal framework are being prepared — these will simplify interactions with tax authorities, dealings with counterparties, and ensure easier access to new land plots. The government acknowledges that the demand for land significantly exceeds its supply, so priority will be given to the most critical areas.
Additionally, tax incentives, deferral of payments, and a review of the minimum tax liability policy are planned for businesses in risky zones. Among the financial instruments are compensation of up to 40% of the cost of Ukrainian agricultural machinery, preferential loans under the “5-7-9%” program with rates from 1% to 3%, as well as grants for processing with compensation of up to 80% of expenses.
“The government strategy aims to sustain the agricultural sector in frontline regions and create a foundation for its recovery.”
Moreover, farmers can expect compensation of up to 80% of costs related to the construction and modernization of irrigation systems, which will contribute to the restoration of land reclamation in affected areas.
Overall, the new initiatives aim to increase the volume of compensations, direct payments, and stimulate the development of infrastructure for farmers in frontline and liberated regions to support the recovery of production under challenging wartime conditions.