The transformation of agriculture in Ukraine: From collective farms to agroholdings. OSW Commentary No. 127, 06.02.2014

In recent years, Ukraine’s agriculture has been consistently improving and has been the only part of the country’s economy to buck the recession. According to preliminary estimates, in 2013 agricultural production increased by 13.7% - in contrast to a 4.7% decline in the industrial sector. According to official statistics, Ukraine’s industrial production was up 40% in the final months of 2013 when compared to the same period of 2012. This translated into an unexpected gain in fourth-quarter GDP growth (+3.7%) and prevented an annual drop in GDP. Crop production, and particularly the production of grain, hit a record high: in 2013, Ukraine produced 63 million tonnes of grain, outperforming its best ever harvest of 2011 (56.7 million tonnes). The value of Ukraine’s agricultural and food exports increased from US$4.3 billion in 2005 to US$17.9 billion in 2012, and currently accounts for a quarter of Ukraine’s total exports. Economic forecasts suggest that in the current marketing year (July 2013 - June 2014) Ukraine will sell more than 30 million tonnes of grain to foreign markets, making it the world’s second biggest grain exporter, after the United States.

The Impact of CAP Payments on the Exodus of Labour from Agriculture in Selected EU Member States. Factor Markets Working Document No. 66, August 2013

This paper examines the determinants of exit from agriculture under the implementation of CAP payments in four selected EU countries (France, Hungary, Italy and Poland) in the period 2005-08. The study employs micro-data from the European Union Labour Force Survey and regional data from the Farm Accountancy Data Network. We differentiate among the different measures of farm payments, looking at the individual impact of Pillar 1 instruments, i.e. coupled and decoupled payments, and at those in Pillar 2, targeted at rural development. The main results suggest that total subsidies at the regional level are negatively associated with the out-farm migration of agricultural workers in the two New member states, Hungary and Poland, so that the CAP would seem to hinder the exit of labour from agriculture. Conversely, the non-significant results for the ‘old’ member states may be interpreted as the result of opposing effects of coupled payments and rural development support. The diverse impact of CAP on the likelihood of leaving agriculture in the four countries reflects the heterogeneity across European member states, due to different market and production structures, which does not allow a common and simple generalisation of the effect of the CAP on labour allocation.