Agriculture within the Ukrainian Economy

The Ukraine is one of the largest countries in Europe in terms of territory and has a population of little over 40 million people. Furthermore, throughout the early 2000’s, the Ukraine experienced impressive economic growth. From the year 2000 up until 2008, the GDP grew by more than 50%. However, since the 2008 global financial crisis and through the ongoing east European political crisis of the last several years, the Ukrainian economy has been hit particularly hard.

Agriculture within the Ukrainian Economy

Agriculture represents more than 10% of all economic activity in the Ukraine and employs almost 10% of the population. Small and medium-sized family agricultural operations represent almost half of the national output; however, this percentage keeps decreasing as large agriculture enterprises continue to enter the country. This socio-economic transformation within the agriculture industry is significant because it correlates with the wider transformation that is taking place in the country. With the collapse of the Soviet Union, the Ukraine transitioned from collective farming to mostly small and medium-sized private household plots, which prevail throughout the country. In the 21st century, as the Ukraine continues to introduce free market policies, agriculture is pivoting towards large private firms.

In 2008, the Ukraine became a member of the World Trade Organization (WTO), which has led to the reduction of trade duties and the legislation of international phytosanitary standards. Similarly, in 2014, the EU-Ukraine Association Agreement was signed, which seeks to further harmonize regulations and standards between both jurisdictions in order to integrate their economies and maximize trade. Overall, the Ukraine is a net exporter of agricultural and metallurgical goods, mainly because its domestic demand for these products is limited. Likewise, the country depends on the import of value added consumer goods as well as energy commodities, such as natural gas and petroleum from Russia.

The sociopolitical pivot underway in the Ukraine has led to a battle between the large international influences that surround the country. In turn, this standoff has accelerated the Ukrainian economic need to make up for the market loss due to the Russian trade sanctions. Given that Russia has severely limited imports from the Ukraine because of the conflict, Ukrainian farmers have no option but to look to other markets, such as the EU, Turkey, Egypt, and China. Ultimately, these political tensions have negatively affected the Ukraine’s economy as well as its standards of living. Furthermore, in 2014, the national currency, the Hryvnia, underwent a profound devaluation. Similarly, inflation has affected consumer good prices because of the stronger correlation that it has to the elevated production costs than to labor market conditions.

During 2015, more than US$860 million worth of products such as fruits, nuts, and tobacco were imported into the Ukraine. Similarly, during 2015, the main providers of fish and consumer food products to Ukrainian markets were Germany at approximately US$310 million, Poland with some US$296 million, and Turkey at about US$223 million. These statistics for 2015 show a slight decrease on the dependence on foreign imports. Likewise, the projections for 2016, suggest that both domestic production and consumption are picking up once again in the Ukraine.

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