Ukraine’s EU membership will trigger a rewriting of CAP, says Kyiv official

Evaluating the impact of Ukraine’s accession on the EU’s farming subsidies under the current criteria is not a relevant exercise as Kyiv’s EU membership will likely lead to the end of the Common Agricultural Policy (CAP) as we know it today, according to Ukraine’s Deputy Economy Minister Taras Kachka.

The comments by Kachka, who is Ukraine’s main negotiator in Brussels on trade and economy, came after the Financial Times leaked a paper drafted by the general secretariat of the EU Council with some calculations on the impact of Ukraine’s possible accession on the EU budget.

The paper assessed that Ukraine would be eligible for €96.5 billion of CAP funds, leading to cuts of about 20% in farm subsidies to current EU member states.

“Figures presented in the media about the eventual cost of EU subsidies for Ukraine just indicate that the enlargement process will require a complex reassessment of the Common Agricultural Policy as such,” Kachka told reporters on Thursday (5 October).

According to him, however, both the EU and Ukraine are not yet at the stage of negotiating these aspects as they still have to wait for the political decisions to start accession talks, which may well be granted at an EU summit in December.

The CAP envelope for the current seven-year program (2021-27) is €378.5 billion, accounting for 31% of the total EU budget.

The main problem over Ukraine’s accession is related to the fact that roughly 75% of the current farming subsidies are made up of direct payments to farmers per hectare.

According to Eurostat, the average size of arable land of Ukrainian farm enterprises amounts to 485 hectares, which is considerably larger than the average of 30 hectares in France, or eight hectares in Poland.

The current CAP already features a redistributive payment scheme capping direct payments to large farms, in order to favour additional payments to smaller ones, but it is considered not enough to cushion the impact of having a global agricultural powerhouse such as Ukraine as a recipient of CAP subsidies.

Another tool is the so-called external convergence, which created de facto artificial disparities among the CAP beneficiaries on the basis of the country they live in – for instance, the income support received by Eastern European farmers is below the EU average.

“My assumption is that we will then talk about a new system of Common Agricultural Policy, where the question of certain kinds of discounts will not be so important,” said Kachka, minimising the risks of Kyiv getting fewer funds.

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Food security is Ukraine’s leverage

According to Kachka, the main goals of the CAP should be discussed before assessing figures and, in this sense, Ukraine’s leverage is its role as a major exporter of grains in the world, contributing to world food security.

A similar remark was made by Ukraine’s Deputy Prime Minister Olga Stefanishyna, who intervened remotely in a conference held in Brussels on Thursday (5 October) for the establishment of a permanent presence in the EU capital of the Ukrainian Agribusiness Club (Ucab).

She said that talks on integrating Ukraine’s agriculture sector into the EU should be held “on a permanent basis so as to shape not only the future of Ukraine as a member state but also the future of the EU as a global player”.

As food security is a concept carved into Treaties, taking centre stage, together with farmers’ support, in the EU’s main farming subsidies programme, Kyiv’s officials are now trying to shift the narrative around Ukraine’s EU membership from a risk to EU coffers to a contributor to EU targets.

“If you combine together the Ukrainian food system and the Ukrainian supply of the products, it might be easier to achieve climate goals, food security system and profitability of EU farmers and food producers,” said Kachka.

He also stressed that “differences between the EU’s and Ukraine’s agricultural policy are not so big as might be presented,” referring to the central role of Ukraine in providing Europe with animal feed and seeding materials, or in processing crop protection products.

“Someone tried to diminish the role of Ukrainian agriculture by saying that they do not comply with EU requirements. It’s otherwise,” he continued, adding that the country’s farming is developing on the same principle as the EU’s.

Some EU countries have filed a number of food safety notifications concerning shipments of agricultural products from Ukraine since the start of the year, which have been played down by the European Commission as part of a “normal process” and by Ukrainian authorities.

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[Editing by Zoran Radosavljevic]

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