

Cheaper labor means lower costs of production. But honestly the largest reason is that Ukraine has these enormous mega farms that stem from Soviet era collectivisation. These farms own several hundreds sometimes thousands of hectares of continuous farmland and often own 0 debt. Being of that size and almost more importantly, being that size debt free, brings a lot of benefits. Just to put it into perspective the average farm in Ukraine today is 649 hectares while in neighbouring EU Romania the average farm size is 4,4 hectares. Ukrainian farming has more in common with the type of farming in the US and Canadian great plains than the rest of Europe, especially eastern Europe.
Also Ukraine is covered in a certain soil type called chernozem which is one of the most fertile on the planet. This leads to large yields. And contrary to a lot of other poor countries around the world all of their farms are fully mechanized and use the latest technology, which is possible because of the large farm sizes mentioned earlier. The 649 hectare Ukraine farm can afford a totally different equipment than the 4,4 hectare Romania farm.









When talking about efficiency gains you scale with your cultivated area. If that land is owned or leased does not matter.
I’m not talking about Soviet stuff. It’s the fact that the ability to invest in new technology is strongly correlated with farm size. For example a farm only needs one N sensor. A 4 hectare farm could never invest in one profitably but a 800 hectare farm can buy one and profit first year.
Farming must be one of the least mobile industries in the world. It’s very rare that farmers ever move and that’s because the most common entry into farming is inheriting a farm. Most would rather close down than move internationally. And if you just bankrupted your own farm you don’t really have the capital anyway to buy another farm.
Becoming as competitive as Ukraine requires one of three things. Lowering wages, increasing average farm size for efficiency gains or increasing subsidies. Lowering wages is not desirable and neither are increasing subsidies. Increasing average farm size could be an option but that one is very controversial to a lot of people, even non farmers who just happen to be fond of small scale farming. News headlines titled “small family farms that have been run for generations are forced to close en masse” would not look good.
However don’t get me wrong. I 100% would be very pro getting Ukraine to enter the EU. However the fact that the entry of Ukraine would be a challenge to existing agriculture in the EU is a real issue that has to be accounted for. It’s kind of like attaching the US Midwest cornbelt right at the EU land border and opening up free trade. Of course that would lead to a disruption in the market.