WHY IT MATTERS
In June 2022, Ukraine achieved EU candidate status. However, to gain full membership, the country must fulfill numerous requirements, including significant transformations in its agricultural sector. While most legal frameworks regulating quality standards and the distribution of various agricultural products have already been adopted, the European Commission’s report indicates that Ukraine is still in the early stages of preparing for membership. Seed World Europe dove in to find out what is the current state of the industry, and what lies ahead? Participants in Ukraine’s seed market share their perspectives.
Impact of Russian Invasion and Stories of Survival, 2022-2023
When the full-scale invasion began, Ukrainian companies faced numerous challenges, with safety and business continuity as top priorities. According to Serhiy Tymoshenko, CEO of MAS Seeds Ukraine, the company had developed an emergency action plan in advance, which helped them quickly adapt to wartime realities. In the early weeks, part of the workforce was relocated abroad, while others moved to western Ukraine. Warehouses were also shifted westward, as a considerable volume of seed had yet to be delivered to buyers.
Despite all obstacles, the company’s plant in the Dnipropetrovsk region, located just 200 km from the front line, resumed operations by March 2022. Meanwhile, production plans had to be adjusted — land under cultivation for certain crops was reduced due to occupation.
One of the most challenging issues was logistics. Relocating warehouses was complicated by numerous checkpoints in frontline areas, which deterred many transport companies from traveling through these regions. The blocked seaports made exports impossible, as about 95% of MAS Seeds’ international shipments were done by sea. Relatively stable logistics were restored in August 2023, when the Black Sea grain corridor from Odesa reopened.
In winter 2022, prolonged power outages significantly impacted production, increasing the risk of reduced product quality or complete loss of large volumes of seed. In 2023, the company acquired a powerful generator, minimizing dependence on electricity and allowing for future contract planning.
2024: A Year for Reevaluating Business Models
Tymoshenko notes that compared to 2022-2023, farmers are much more optimistic about the future, thanks to the ability to export grain at relatively favourable prices.
This statement is shared by Siuzana Grygorenko, Director of the Seed Association of Ukraine. In 2024, most agribusinesses have adapted and resumed operations. Grain and seed exports are gradually recovering, aided by the partial reopening of seaports and alternative logistical routes. However, challenges remain: high logistics costs, damaged infrastructure, and a labour shortage due to mobilization and migration.
The loss of 20% of agricultural land in occupied territories has prompted farmers to rethink their crop strategies. There is a clear trend toward diversification: agricultural enterprises, including large agribusinesses, are experimenting with growing non-traditional crops for Ukraine, such as flax, sorghum, coriander, and peanuts. This shift is driven partly by the search for more profitable alternatives to traditional crops like corn, whose profitability has declined.
The opening of a new sea corridor has been a major success, as Ukraine supplies a significant portion of grain not only to Europe but also to many African countries. Stable deliveries of Ukrainian grain are crucial to avoiding food crises in these regions. In this context, European integration is becoming a powerful tool for stabilizing the situation and helping the industry adapt to new realities.
Olga Trofimtseva, an independent expert in the agricultural sector and former Acting Minister of Agrarian Policy (2019), points out that climate change has also significantly impacted the Ukrainian agri-market. Its effects in recent years have been so pronounced that many Ukrainian agricultural producers have had to completely rethink their business models.
In addition to adapting to the Russian invasion, farmers have had to explore new activities and crops that promise greater profitability. For instance, they are increasingly moving towards processing raw materials into value-added products rather than exporting them in their raw form. They are also placing greater emphasis on thoroughly calculating the economic viability of their operations.
The sector has, in a sense, come together: market players are not only competing but also collaborating, seeking joint ways to access export opportunities or secure grants and loans.
A Review of Seed Industry Legislation
One of the major steps towards aligning Ukrainian legislation with EU standards was the adoption of a law on GMOs. This law aims to regulate genetically modified organisms, tighten control over their use, introduce new labelling requirements, and enhance transparency. It establishes state control over issuing permits for GMO use, along with stricter risk assessment procedures. The law also includes a provision to completely ban the cultivation of GM corn, as well as GM rapeseed and GM sugar beets, for five years starting in autumn 2026.
According to Tymoshenko, progress in this area is crucial, especially for corn, as its hybrids are sensitive to cross-pollination. If GM corn is grown nearby, hybrid seed fields could be cross-pollinated, failing to meet European quality standards. Since almost all of MAS Seeds’ production is exported to the EU, where GM corn is banned, the company risks losing its business.
Trofimtseva points out that with the adoption of the GMO law, the issue cannot be considered fully resolved. This area is dynamic and requires continuous monitoring of legislative and regulatory developments in the EU and other major agricultural producers worldwide.
She emphasizes that the seed quality and certification system needs to be adapted to modern realities and EU practices. Ukraine should view the seed industry as one of the technological sectors that create added value. This sector is quite complex, involving issues such as the use and protection of seed and plant material rights. It is precisely in this area that government attention is needed to ensure Ukraine’s full integration into the European and global seed markets.
Grygorenko highlights that for the mentioned law to benefit all market participants, a series of regulations must be developed to govern specific aspects of GMO use and other issues related to the seed sector. Upon joining the EU, all current permits will be revoked, and only GMOs approved by the EU will be allowed.
On the Possibility of Renewed Export Bans
In May 2023, representatives from Bulgaria, Hungary, Poland, Slovakia, and Romania successfully lobbied the European Commission to ban imports of wheat, corn, rapeseed, and sunflower from Ukraine. This embargo lasted until September 15, 2023, with Poland independently blocking Ukrainian grain imports within its borders, allowing only transit.
Members of the Seed Association of Ukraine have been closely monitoring the situation and note that, in 2024, exporting Ukrainian grain to the EU remains complex. Both the Ukrainian government and the European Commission are currently working to prevent a recurrence of such bans, but some Central European countries are still considering new restrictions. To address this, the Ukrainian government is developing an export licensing system, aimed at preventing sudden price spikes and ensuring transparency in export operations.
To avoid a repeat of these challenges, a coordinated effort is needed at all levels — governmental, industry associations, and civil society. Advocacy and awareness initiatives will help communicate to Europeans that integrating the Ukrainian agricultural market with the EU will ultimately strengthen Europe’s competitiveness against China, the United States, and South America.
The Impact of Economic Conditions on Agricultural Sector Productivity
According to the Ministry of Agrarian Policy, around 30% of the agricultural sector’s potential has been destroyed, and 20% of farmland is currently occupied due to the full-scale invasion. Approximately 2 million hectares of farmland remain uncleared of mines, with progress being very slow due to a shortage of demining personnel and specialized equipment.
Large areas in the southern regions, once used for agriculture, now require rehabilitation after being flooded due to the destruction of the Kakhovka hydroelectric power plant by Russian forces.
The Kyiv School of Economics estimates that the Russian invasion has caused $80 billion in losses to Ukraine’s agricultural sector, including destroyed equipment, lost production, and damaged infrastructure.
Logistics for agricultural producers have not only become more complicated but also more expensive. While transport routes for goods are now largely under control in 2024, forecasting logistics costs remains a problem.
The labour shortage is another pressing issue. According to AgroHub, 64% of the 121 surveyed agricultural enterprises are struggling with a lack of specialists, as many Ukrainians have either left the country or been mobilized. The shortage is particularly severe for technical workers, agronomists, and engineers.
Trofimtseva notes that the agricultural sector continues to operate in survival mode. While some producers may be faring better, those in frontline regions are struggling.
Overall, the longer the Russian invasiob continues, the more challenging the situation becomes for agriculture, with resources — human, economic, and environmental — increasingly depleted.
Forecasts on Export
Trofimtseva believes that Ukraine’s path to EU membership will progress slowly but steadily, with no chance of turning back. Fundamental changes are needed across the entire agricultural sector of a large country like Ukraine. At the same time, the EU’s Common Agricultural Policy is also undergoing reforms, which will shape how Ukraine integrates into the European community in the agri-food sector, including the seed industry.
She predicts that exports from Ukraine to EU countries are likely to remain relatively stable, with figures comparable to those of 2023 or 2024. This will largely depend on the overall harvest, which may be smaller due to adverse weather conditions, as well as other unpredictable factors.
According to Grygorenko, Ukraine’s agricultural sector — and the seed industry in particular — is at a point where challenges and opportunities converge. On one hand, the Russian invasion is damaging infrastructure, disrupting logistics, and hindering production processes.
On the other hand, European integration is opening new doors by providing access to a vast market characterized by high purchasing power, innovation, and modern agricultural practices.
However, this also means increased competition with European producers, which will require Ukrainian farmers to enhance product quality and meet stringent EU standards.
In this context, Ukrainian producers have an opportunity to carve out new niches in the EU market, particularly in the areas of protein crops and organic products. European demand for these products is rising, and Ukrainian farmers have the potential to expand the production of crops like soybeans and peas.
Tasks for the Future
One of the main tasks is to adapt to European standards, which have stricter requirements for product quality, environmentally friendly production, and the use of GMOs. Successful harmonization of legislation could make Ukraine’s agricultural sector even more competitive. Additionally, expanding domestic processing of agricultural products will help reduce reliance on raw material exports and increase the value-added component of Ukrainian goods.
The export of Ukrainian seeds, which are high value-added products, has been growing steadily. In 2020, the European Parliament recognized Ukraine’s seed certification system as compliant with EU standards, enabling Ukraine to export seeds of major cereal crops such as oats, barley, rice, rye, wheat, corn, and sorghum.
But this is only the beginning. Ukraine is working towards gaining equivalence recognition in Europe for oilseeds, beets, and soybeans. These efforts are being actively pursued by the Seed Association of Ukraine, with strong support from the European seed association, Euroseeds, which has been helping integrate Ukraine’s seed industry into the EU market for many years.
Among other goals, experts from both associations are working on developing the forage grass segment.
By the 2050s, Europe plans to allocate 30% of its agricultural land to these crops, aiming to provide both animal feed and contribute to soil restoration and broader ecosystem recovery. Therefore, the demand for such seeds will remain high, and it is crucial for Ukraine’s state institutions to actively engage in developing seed methodologies for perennial grasses.
What remains unchanged and crucial is the remarkable resilience and adaptability of Ukrainian farmers, despite everything. However, further reforms, investments in infrastructure, and new technologies are needed. Together, these factors will play a decisive role in forging effective partnerships with European countries and, ultimately, achieving a new economic breakthrough for Ukraine’s agricultural sector.
