Agriculture in Ukraine

Agriculture in Ukraine

Due to its advantageous geographical location, favourable climate, adequate rainfall and rich soil, Ukraine holds a prominent position in the agricultural sector. A lot has been done in the past 25 years to enable Ukraine to live up to its status as the “breadbasket of Europe” and to help, at least to some extent in the global challenge of sustainable food supply and security.

As per the statistics of the previous years, Ukraine has been securing averagely 11-14% of the national GDP. Nearly 17% of the working population is employed in the agricultural business. The agricultural sector covers 70% of Ukraine’s total territory (42.7 million ha), while agricultural products accounted for 42.5% of Ukraine’s export in 2016, showing a 4.5% rise since 2015. The government has taken several steps in order to ease the operation and productivity of agribusinesses and farms. As part of its deregulation efforts, the government eliminated 14 permits and 6 licenses which where previously required for businesses in the agriculture sector. In 2017, the government continued their efforts by further introducing deregulation, privatization as well as aligning safety and food standards to meet with those of the European Union.

Ukraine’s agricultural land comprises 42 million hectares, which is 71% of the country’s total landmass. Among these hectares, 76% is arable land (32.5 million hectares), 13% - pastures (5.4 million hectares), 6% - grasslands (2.4 million hectares), 2% - perennial plants (0.9 million hectares). Agricultural land of Ukraine is made up of rich areas yielding grains, technical crops, fruit and vegetables, as well as, cultivated lands, gardens, orchards, vineyards, meadows and pastures.

Ukraine has one of the world’s richest black soils, also referred to as chernozem. Chernozem occupies 41% of Ukraine’s total area and specifically 54% of its agricultural and 58% of its plow land. Nearly 28 percent of the global black soil is located on the territory of Ukraine. Chernozem is well-known for its high rate of humus (up to 15% compared to 4% found in average soils), and high percentages of phosphoric acids, phosphorus and ammonia. These components make chernozem very fertile, producing good agricultural yields.

Currently the sale of agricultural land is not permitted as per the Moratorium on Sale of Agricultural Land of the Verkhovna Rada (the Parliament of Ukraine). Changes as per this issue are expected in the beginning of 2019.

There are two main branches of agriculture - сrop growing and animal husbandry. Agricultural production made up 11.6% of Ukraine’s GDP in 2016 (277 billion UAH). Crop production amounted to 72.8% of the total agricultural production, while animal production scored 27.2%. Crop growing is a vastly developed branch as Ukraine’s climate and soil allow for the growth of a wide array of crops. The main grain crops are: wheat, corn (maize), rice, rye, oat, barley, soyabean, rape, millet, sunflower and buckwheat. These crops occupy 68% of arable land in Ukraine.

The biggest profits are produced by corn, sunflower and rape. At the present moment Ukraine is among the world leaders regarding grain export and is one of the top exporters of barley and sunflower oil worldwide. As per the annual production of wheat, Ukraine yields 15 to 26 million of the crop. The entire cereal production reaches 90-100 million tons. Ukraine hence holds sixth place on the world grain export market.

The main specialization field of Ukrainian agriculture is plant production, particularly, the production of industrial and feed crops: Ukraine is 1st among CIS, cultivating 63% of sugar beets. Additionally, Ukraine is the largest region in CIS in essential oil plant production, such as roses, sages, lavenders etc. Various other agricultural fields, such as gardening, vegetable, melon and wine growing are also well developed in Ukraine.

Animal husbandry is the second major aspect of Ukrainian agriculture. Ukraine produces meat products such as lamb, pork, chicken, beef, horse and rabbit. Meat production has shown a steady rise despite the situation in the country. Ukrainian poultry products are exported to the EU, while meat is exported to Belarus, Moldova, Azerbaijan and other regions. Fish farming and beekeeping has also gained great popularity in the past years.

Dairy farming is another popular sector in Ukraine. In 2016 milk producing Ukrainian companies gained access to the European market. While Bulgaria was the first country to import Ukrainian dairy products, Russian was the main consumer. Since the Russian ban in 2014, the industry took a hit, resulting in shifting the trade towards countries as Armenia, Georgia and Kazakhstan. The export of dairy products from Ukraine in January-June 2017 in monetary terms amounted to 117.2 million USD, which is 76.6% more compared to the same period in 2016.
The agricultural sector in Ukraine is exploring new business development locations, markets and instruments. Introducing niches of fruit, vegetables and organic foods are most promising on the global food market. The European Union, Middle East, Asia and Oceania are markets to consider for trade development. Processed and dried products can also be a high margin niche in the aforementioned regions bringing impressive results through strategic investments and steady quality improvement.

Exports in the agricultural sector reached 14.7 billion USD in 2017, showing a rise of 22.7% as compared to 2016. Imports also increased by 8% and amounted to 3.6 billion USD. Meanwhile, Ukraine’s share of the agricultural export level as per the general export structure of the country has remained the same, at 41.8%. Products which had great popularity in terms of export were sunflower, safflower and cotton oil – 24.8% of agricultural export value, corn – 16.5%, wheat – 15.1%, rapeseeds – 5.1%. In addition, soybeans, sunflower meal, barley and poultry meat. Imports - tobacco raw materials, frozen fish, sunflower seeds and citrus.

Regarding the geographical analysis of exports, India (11.3% of total exports), Egypt (7.5%) and the Netherlands (6.9%) were the three leading importers of Ukrainian agricultural products in the period of January-October 2017. Meanwhile, no drastic changes have been evident in the the global regional trends: Ukraine has exported to Asia 42% of agricultural products (6.3 billion USD), to the EU countries – 32.2% (4.7 billion USD), to African countries – 15% (2.2 billion USD) and to CIS countries – 7.5% (1.1 billion USD).


Meat production in Ukraine amounted to 1.637 million tons in January-September 2017, reporting an increase of 0.2% compared to the annalogous period of 2016. By meat type, 0.1% increase in beef production, 1.4% in poultry production, and 1.6% in pork has been noted as compared to 2016. Cherkasy, Vinnytsia and Dnipropetrovsk regions have shown to be leaders in terms of animal production in Ukraine, accounting for 37% of breading of all animals in Ukraine in those regions.

The biggest profits in animal breeding are produced by poultry and pig breeding. Other branches of animal breeding, such as turkey, rabbit and duck breeding are also developing.
During January-September 2017, Ukraine's meat and meat products exports increased by 23% compared to 9 months 2016, reaching 268 thousand tons. meanwhile, meat imports rose by 22% in the same period, reaching 156 thousand tons.

The biggest growth in export sales was observed in the poultry segment. Poultry meat shipments from Ukraine accounted for 79% of the country's total meat exports, specifically 212 thousand tons were exported, indicating a rise of 19% as compared to January-September 2016. In 2017 Ukrainian poultry producers exported to 63 countries, including various states in the Middle East, Central and East Asia and Africa. The increased amount of poultry exports can be linked to the increasing demand in Egypt (buying 17.1% of total supplies), the Netherlands (14.3%), Iraq (8.8%), Belarus (8.4%) and Azerbaijan (7.6%).

High export rates of poultry signify a major success for the industry as prior to 2015 Ukraine had relied on Russia for most of its export sales. During the recent years almost all Ukrainian exports were redirected to different foreign markets.

Beef is also a key export focus. The largest volumes of pork are imported by Belarus, Azerbaijan, Kazakhstan, Georgia and Moldova.

Overall, the agricultural industry of Ukraine is one of the most attractive branches for investments, allowing for the interested party to invest in a wide variety of fields.