Ukraine’s EU accession would increase the bloc’s agricultural value added by only 4% — Rabobank

Ukraine’s accession to the European Union would have significant implications for the bloc’s food and agricultural sector.

This forecast was made by analysts at Rabobank.

According to the bank, despite the damage caused by the war, Ukraine will provide a large production base for grains, oilseeds, and poultry, while remaining less competitive in higher value-added agricultural products.

“When Ukraine joins the EU, it will become the largest member state in terms of agricultural land area. Ukraine’s accession would add 41 million hectares of farmland, increasing the EU’s agricultural land base by 25%.

“However, agricultural value added would rise by only 4%, as Ukraine primarily produces low-value commodity crops rather than high-value food products and beverages,” the analysts said.

At the same time, following Ukraine’s accession, European agricultural businesses could face increased price pressure on grain and sugar markets, as well as tighter competition for funding. The livestock sector could benefit from lower feed costs, while grain and oilseed traders and processors could gain from higher volumes and lower raw material prices. The impact on the EU poultry sector will depend on the extent to which lower product prices are offset by reduced feed costs.

“Investments in the reconstruction and development of Ukraine’s food industry and agriculture could create opportunities for European suppliers of technology, agricultural inputs, and expertise.

“From a strategic perspective, accession could also strengthen the EU’s food autonomy, although reducing dependence on imported soy products will remain challenging,” Rabobank analysts forecast.

They also noted that the EU population would increase to 490 million people following Ukraine’s accession, an increase of 8%. Meanwhile, the bloc’s GDP would grow by only 1%, while EU GDP per capita would effectively decline by 7%.

According to the analysts, Ukraine’s accession does not fit well within the current framework of the EU’s Common Agricultural Policy, making it likely that transitional arrangements will be proposed for Ukraine.

Tags: EU, Ukraine