Agriculture
Considered for centuries as the “breadbasket of Europe”, Ukraine today possesses arable land which equals one third of all arable land of the European Union. Nonetheless, it is about quality, not quantity. Ukraine accounts for almost one third of the world’s most fertile black soil. With its abundance of fertile land and favourable climatic conditions, it is only natural that Ukraine is one of the world’s leading exporters. There is however, still a significant potential for growth. Government reforms, investments, technologies and integration with European standards are further improving yields and quality – making Ukrainian agriculture even more promising for the years to come.
Norway’s import of agricultural goods has more than tripled the last twenty years and today approximately half of all calories consumed are imported. Through liberalization of the land market, geographic proximity, increased efficiency, and tariff concessions we believe there are many opportunities for increased import of high-quality Ukrainian products. According to the Free Trade Agreement between Ukraine and the EFTA-states, Norway and Ukraine signed a bilateral agreement on agriculture in 2012. This provides for tariff concessions for processed goods, giving Ukrainian products equal or better market access than equivalent EU products. To find out more about the competitive advantages of Ukrainian products explore our leaflets above or calculate import tariffs on a specific commodity by browsing the Customs Tariff.
In addition to the untapped potential in trade of goods, there are considerable opportunities for Norwegian technology and solutions in a rapidly developing Ukrainian agriculture. The investment chapter in our trade agreement also gives Norwegian investors in Ukraine the same treatment as locals – in a country that made impressive leaps on the World Bank’s “Ease of doing business” index in recent years.
NUCC strives to be a useful and competent platform and partner when searching reliable partners in Ukraine. If you have any questions regarding products, exporters, tariffs, investments, or market access – please do not hesitate to contact us.
Update on Agriculture as of June 16th, 2022:
Agriculture is representing a backbone of Ukraine’s economy, accounting for more than 10% of the country’s GDP in 2021. Likewise, Ukrainian agriculture is of vast importance to the rest of the world. Ukraine is a key exporter of agricultural products such as various grains and oilseed, as well as a significant emergency food aid contributor to the United Nations’ World Food Program. Also, Ukraine is noted for its highly favorable natural conditions for agriculture and possesses almost a quarter of the world’s most fertile soil. These are some of the reasons why Ukraine is oftentimes referred to as the breadbasket of Europe.
Therefore, an attack on Ukraine, is also an attack on the breadbasket of Europe. In the previous season, Ukraine was the sixth largest wheat exporter the previous season, and it was expected to further increase production and set another export record for the current season. In May, the ministry of Agriculture Mykola Solsky said that “the sowing of spring wheat for the 2022 and the overall rate of this year’s spring crop sowing is 25% lower than at the same date in 2021.” Although Ukrainian farmers have proved exceptional bravery in their work, the war has brought along several fatal consequences for Ukrainian agriculture as well as the global commodity market.
Due to martial law, export quotas on some agricultural products are set to zero. This relates to oats, rye, buckwheat, and salt. The ban also links to some mineral fertilizers, coal, natural gas of Ukrainian origin and oil fuels. However, this is not the most serious concern. Damage to land, infrastructure, and agricultural machinery, poor to no market access in occupied territory, shortage of fertilizers and fuel are all major concerns.
Prior to the war, 89% of Ukraine’s grain exports were transported via Black Sea ports. As the 2022 harvest season approaches, Ukraine’s naval capabilities and transportation routes are being progressively destroyed or controlled by the Russian military blockade. Only two small ports in the Danube delta remain functional. The Izmail and Reni ports were not used for grain exports before the Russian invasion, but they took over an important share following the war. The Romanian Black Sea port in the city of Constanta is playing a major role in transiting grain, assisting Ukraine in its race against time to export the 20 million tonnes of grain stuck in its silos in time to accommodate the harvest of its new crops, which is set to start next month. 55% of the grain exports were transported via railway or road in May 2022.
Ukraine has suffered $4.292 billion in damage to farmland, machinery, and livestock as a result of Russia’s invasion, according to the Kyiv School of Economics. About half of the already immense destruction from the war comes from pollution caused by mines and unharvested crops, and almost a quarter of the total accounts for damage done to farm machinery due to military activity and occupation.
On a general basis, NUCC believes there is great potential for increased imports of Ukrainian agricultural products to Norway and seeks to inform Norwegian businesses about the opportunities for mutually beneficial cooperation with Ukrainian producers. As of now, the need for support is urgent, thus NUCC urges Norwegian businesses to consider how they might support. Maintaining collaboration and trade in any manner feasible is an extremely vital source of support. In addition, Ukrainian agriculture depends on the restoration of agricultural equipment, the replenishment of fuel and fertilizers, and the facilitation of easier access to European markets.
Read the full version of Agricultural War Damages Review Ukraine by Kyiv School of Economics here.
