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The policy paper published by Jean-Jacques Hervé in the Schuman Foundation Journal, titled “European agriculture and Ukrainian agriculture complement each other,”asserts that EU and Ukrainian agriculture are complementary and that the related agri-food and economic synergies must be managed. However, a careful assessment of the implications, coupled with recent European agri-food developments, suggests that this thesis is unconvincing for two reasons:

• The policy paper seems  influenced by logical biases and lacks a factual foundation.
• Without a clear framework the gains would be offset by greater challenges for the EU.

ANALYSIS 

Looking at the recent EU agri-food context, it can be aptly described as a “perfect storm” caused by the simultaneous negative impact of post-COVID dynamics, the Ukrainian crisis, the implementation of the Farm to Fork strategy, and rampant inflation across supply chains (from raw materials to retail prices). These devastating consequences have led to the financial collapse of farmers and agri-food SMEs, culminating in the so-called “Tractor Protests.”

This situation has been further exacerbated by the EU’s excessive openness to Ukrainian imports through “solidarity lanes” and the removal of import tariffs.

Good intentions inadvertently triggered a massive dumping operation, causing an oversupply of agricultural raw materials (particularly cereals) with prices up to 40% lower than those in EU target markets. The impact has been predictably negative for EU Member States, with particularly devastating effects in Eastern EU regions (Poland, Romania, Slovakia, Moldova, and Hungary), where farmer protests and local government opposition reached peak intensity.

This experience—though amplified by other factors—demonstrates that policy decisions driven by “ideological narratives” and a lack of governance can have a profoundly negative impact on the EU economy, particularly in the agricultural and food systems.

Let’s now delve into the details of the analysis, structured around the following axes:   

1. ASSESSING AGRI-FOOD ECOSYSTEMS   

Ukrainian agriculture benefits from three unique positive characteristics that provide significant competitive advantages in terms of ecosystem and soil productivity:

• Fertile black soil (“Chernozem”), covering 60% of the country, ideal for cereal cultivation;
• Vast plains that enhance farming and harvesting efficiency;
• A climate highly favorable for agricultural practices.

Unlike the EU, Ukraine’s geographical structure is ideal for intensive farming, a legacy of its role as the “breadbasket” of the USSR during Soviet industrialization and its current role as a supplier for developing countries in cooperation plans (e.g., Maghreb, Egypt, Ethiopia, Nigeria, Afghanistan, and Sudan).

This focus on “quantity” and “economies of scale” means Ukrainian agri-food offerings are of relative lower quality and cost compared to the EU’s.

Let’s now understand potential implications with an example: considering one of the most famous Italian food excellence like “Neapolitan Pizza”  -protected in Europe as TGS (Traditional Guaranteed Specialty)-  and imagine the same product prepared with Ukrainian wheat instead of selected Italian wheat. It is clear that the latter option offers a compelling consumer advantage in terms of “organoleptic experience” driven by superior taste and texture. Worth mentioning also the health benefits in terms of “high  digestibility” and “nutritional properties’.

Moreover,  from a strategic marketing perspective the case of Pizza Napoletana made from Ukrainian wheat would be positioned as more “affordable”, with a value proposition primarily leveraging price.

Now, the economic dynamics in the food business show that a vast and continuous supply of affordable products in the market will tend to “commoditize” the offer in consumers’ eyes, leading to value decrease across the supply chain, declining quality, and the proliferation of discount-based competition (e.g., Offer differentiation based on price rather than value proposition).

Therefore, a broad and sustained access to more affordable raw materials -with relative lower quality-  could negatively affect EU and/or Member State agri-food business (in this case, Italy’s Pizza value chain, currently positioned as premium-artisanal).  

2. BUSINESS MODEL AND FINANCIAL IMPACT 

EU agri-food is globally recognized as cutting-edge. Its business model revolves around product quality achieved through soil, raw material, and process control throughout cultivation, production, and consumer distribution.

EU agri-food supply chains are subject to stringent health and environmental legislation, ensuring high-standard, consumer-compliant final products. Additionally, EU farms are typically medium- or small-scale, averaging about 18 hectares, with a predominance of family labor (especially in Southern Europe).

This business model supports a strategy of “uniqueness and value,” respecting product quality, providing consumers with relevant value propositions, and ensuring relative profitability for supply chain operators.

On the other side, Ukraine’s model emphasizes “intensity and scale,” with farms averaging over 100 hectares (6x the EU average), no compliance with EU health and environmental standards, and the dominance of large multinational agricultural trading companies (the so-called “ABCDs”: Archer, Bunge, Cargill, and Dreyfus). Additionally, Ukraine’s agricultural oligarchy, not always aligned to EU regulations, wields significant export power.

Thus, Ukraine’s business model is characterized by “scale exploitation + cost reduction,” impacting supply in terms of both quality and adherence to ESG (Environmental, Social, and Governance) policies, especially sustainability.

3. ROUTE 2 MARKET AND ‘SOLIDARITY LINES’

In business management, Route-2-Market (R2M) refers to the physical and digital infrastructure enabling product delivery in the markets and sales in the stores. Given this context, Ukraine’s agri-food R2M infrastructure will include Crimean ports, the navigation lines across the Black Sea, the integrated “ship+rail+truck” framework system, Mediterranean naval corridors, and recently established EU “solidarity lanes” to support Ukrainian exports under war economy challenge.

Market evidences suggest that before the 2022 invasion, Russia exploited Ukraine’s R2M to supply EU markets. Leveraging a tested “elite capture” strategy—perfected in Georgia, Chechnya, and the Caucasus—Russia likely exerted significant control over Ukraine’s R2M.

Considering the ongoing war, Russia’s need to circumvent the embargo, and the expansion of corridors through “Solidarity Lanes,” there is a risk that these routes could be influenced or controlled by external actors, including Russia. Even assuming (and hoping) a favorable resolution of hostilities for Kyiv, the risk of unofficial control over Ukraine-EU R2M remains significant.

This scenario poses geopolitical and food security risks for the EU, exposing Member States to unconventional warfare tactics executed through disruptive “commercial operations” (e.g., overstocking or understocking, price destabilization, inflationary shocks, financial pressure on SMEs via dumping, or food security crises caused by supply chain blockages).

4. GEOPOLITICAL IMPACT AND FOOD SECURITY 

The risk of Russian influence over Ukraine’s R2M infrastructure for key food supplies (mainly wheat and cereals) compounds the threat of relative lower quality and prices (up to -40%) compared to EU products. This defines a critical food security risk for the EU and its Member States.

Food security policies have been designed to shield the EU from speculative price and supply dynamics linked to the Ukrainian market under Russian influence or other non-friendly states.

The prospect of increased EU-Ukraine agri-food to a level of full integration—a strategic “business lock-in”—might not only bring some risks but also seems simplistic if not regulated and managed.

Entrusting a key dossier like EU food security to the vulnerabilities of the Ukrainian state system (structural corruption, weak rule of law, agricultural oligarchic interests, and possible anti-EU influences) represents an potential risk that urges for a clear governance and “use cases” approach.

5. PRODUCT QUALITY AND CONSUMER IMPACT

At the end of the day…Consumer is the King! 

After years of virtuous health, agricultural, and environmental legislation, the EU’s 450 million consumers enjoy the best-treated agri-food offerings worldwide, considering the end-to-end supply chains, from cultivation to supermarket shelves.

Biodiversity, geographical excellence, production protocol protections, and the enhancement of taste and cultural differences are key assets of the EU agri-food system. This virtuous approach unfortunately does not find an immediate mirroring with the models, logics, and economic actors operating in the Ukrainian system.

For European consumers, increased integration of EU and Ukrainian agri-food systems could offer some substantial benefits under a clear strategic framework aiming at maximizing the advantages while eliminating the potential risks.

A VIABLE AND SUSTAINABLE PROPOSAL

After demonstrating that an uncontrolled integration of the EU and Ukrainian agri-food systems would entail a high level of risk for the EU and European consumers, it makes sense to propose an alternative approach delivering value to the EU while eliminating or minimizing associated risks.

To contextualize this alternative, we can use a corporate metaphor where the EU is seen as a cross-national company and Ukraine as a commercial supplier. In this scenario, the strategic ‘trade-off’ for the EU Company stems from the need to build a trustworthy and long term relationship while avoiding risks of exclusivity or an overpowered partner. These risks could lead to a ‘captive situation’ in sourcing and, in the future, the threat of downstream integration or even direct market acquisition by the commercial supplier.

Thus, excessive integration of the EU Company with the Ukrainian supplier exposes the EU to the risk that the latter—leveraging economies of scale and price advantages—could capture significant market shares from the EU Company, potentially leading to the extreme scenario of a market takeover.

Given that, we know that Ukraine has a powerful capability of sourcing with a compelling value-for-money proposition with competitive prices and mainstream quality, it seems interesting to adopt a sourcing model we define as ‘Smart-Sourcing,’ where the purpose, channels, and methods of supply are designed to be structured, actionable, flexible, and controllable.

To further visualize this proposal, this model would include the following “Use Cases”:

• Planned leverage of Ukrainian supplies as “conjunctural buffers” (e.g.; demand surges case);
• EU social programs (e.g., migrant centers, low income) or international cooperation;
• Anti-Inflationary or Consumer Value Initiatives (e.g., price-controlled ranges listed in EU key retail customers);
• Top level B2B Supply Agreements with Distributive platforms or Top wholesalers (priority focus on Cereals);

It is absolutely key that for all possible use cases the products supplied by Ukraine will be strictly following the same health, agricultural, environmental and consumer legislation which are applied across UE Member States. This will ensure a fair competitive standard to all involved business actors  as well as same consistent consumer features to European citizens.

The alternative proposal has just been outlined in principle and requires further strategic refinement from governance model to specific  ‘use cases’ development. However, even in a draft definition it appears more balanced and beneficial for involved stakeholders, being also capable of minimizing risks while maximizing advantages for EU consumers.

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*Sossio Chierego is C-Level Executive & Global Advisor