On June 17, 2025, the Verkhovna Rada of Ukraine adopted as a basis the draft law “On Amendments to Certain Laws of Ukraine on the Organizational Principles of Support in the Agricultural Sector” No. 13202-1 of 07.05.2025. The document is aimed at creating modern organizational mechanisms to support farmers and rural development in line with the standards of the European Union.
Why is this draft law necessary?
The draft law was developed to fulfill Ukraine's international obligations under the Association Agreement with the European Union. The document is in line with European standards on agricultural policy, in particular, it implements the provisions of EU Regulations 2021/2115 and 2021/2116, which set out the framework for the implementation of the EU's Common Agricultural Policy. The goal of the reform is to create an effective, transparent and accountable system of support for the agricultural sector that will allow Ukrainian agricultural producers to be competitive in the European market.
Key innovations of the draft law
The draft law provides for a number of fundamental changes:
1. Establishment of the Payments Agency
·The draft law provides for the establishment of an independent state institution that will administer state support to the agricultural sector. The Payments Agency will be responsible for:
·Informing farmers about the terms of support.
·Accepting and verifying applications from agricultural producers.
·Calculation and disbursement of support funds.
·Monitoring of the targeted use of payments and compliance of recipients with the principle of integrity.
·Organization of interaction with banks and other financial institutions.
The agency's activities will be financed from the state budget. Its creation should ensure transparency of the use of funds and significantly reduce corruption risks.
2. Implementation of the Integrated System of Administration and Control (ISAC)
·ISAC will be a single digital platform that will automate the management of support to the agricultural sector. The system will include:
·Land plot identification subsystem.
·A subsystem for monitoring land areas and the condition of agricultural land using satellite technologies.
·A system for automated verification of support recipients.
·Monitoring the compliance of payments and prosecution for violations.
The full launch of ISAK is scheduled for January 1, 2027.
3. Establishment of the Agricultural Data System (ADS)
This system will be a digital tool that will collect and analyze data on economic, social and environmental aspects of farms on an annual basis. Its objectives:
·Information support of the state agricultural policy.
·Economic assessment of the agricultural sector of Ukraine.
·Providing open access to agricultural statistics and its analysis for government agencies, businesses and academic institutions.
4. New Principles of Agricultural and Rural Development Policy
The draft law introduces a holistic approach to state agricultural policy, in particular through:
·Supporting investments in infrastructure and production capacity of farmers.
·Development of agricultural cooperation.
·Implementation of measures to protect the environment and support organic production.
·Diversification of economic activities in rural areas.
·Expanding access to credit and innovative technologies.
5. Monitoring, Control and Accountability
The draft law introduces a multi-level control over the use of funds:
·Automated verification through the Red Flag system.
·Documentary verification of compliance of applications and documents.
·Physical inspection with an on-site visit to inspect the actual implementation of support.
Penalties for violation of the terms of support are provided:
·The obligation to return the funds received.
·A ban on receiving support for violators and their related parties for the next three budget periods.
·Administrative liability for officials for violations in the field of support.
·Criminal liability for collusion between the insured and the insurer.
6. Development of strategic documents
The draft law establishes the development and approval of the “Strategy for the Development of Agriculture and Rural Areas”, which will cover a period of seven years and will be approved by the Cabinet of Ministers of Ukraine.
7. New terminology and clarification of legislation
The draft law provides for amendments to the laws of Ukraine, in particular, changing the name of the current Law “On State Support of Agriculture of Ukraine” to “On the Principles of State Agrarian Policy and Rural Development Policy”. It also clarifies terms and definitions in the field of agricultural policy and support.
Stages of entry into force:
The Law will enter into force on the day following the day of its publication and will be put into effect six months after its entry into force. However, there are transitional provisions:
·The Payments Agency will start functioning after its establishment by the Cabinet of Ministers.
·The Integrated System of Administration and Control (ISAC) will become operational on January 1, 2027.
In general, the adoption of this draft law should ensure systemic changes in the management of support for Ukraine's agricultural sector, bring the country closer to EU standards, and create conditions for the sustainable development of Ukrainian agriculture and rural areas.
Why is this draft law necessary?
The draft law was developed to fulfill Ukraine's international obligations under the Association Agreement with the European Union. The document is in line with European standards on agricultural policy, in particular, it implements the provisions of EU Regulations 2021/2115 and 2021/2116, which set out the framework for the implementation of the EU's Common Agricultural Policy. The goal of the reform is to create an effective, transparent and accountable system of support for the agricultural sector that will allow Ukrainian agricultural producers to be competitive in the European market.
Key innovations of the draft law
The draft law provides for a number of fundamental changes:
1. Establishment of the Payments Agency
·The draft law provides for the establishment of an independent state institution that will administer state support to the agricultural sector. The Payments Agency will be responsible for:
·Informing farmers about the terms of support.
·Accepting and verifying applications from agricultural producers.
·Calculation and disbursement of support funds.
·Monitoring of the targeted use of payments and compliance of recipients with the principle of integrity.
·Organization of interaction with banks and other financial institutions.
The agency's activities will be financed from the state budget. Its creation should ensure transparency of the use of funds and significantly reduce corruption risks.
2. Implementation of the Integrated System of Administration and Control (ISAC)
·ISAC will be a single digital platform that will automate the management of support to the agricultural sector. The system will include:
·Land plot identification subsystem.
·A subsystem for monitoring land areas and the condition of agricultural land using satellite technologies.
·A system for automated verification of support recipients.
·Monitoring the compliance of payments and prosecution for violations.
The full launch of ISAK is scheduled for January 1, 2027.
3. Establishment of the Agricultural Data System (ADS)
This system will be a digital tool that will collect and analyze data on economic, social and environmental aspects of farms on an annual basis. Its objectives:
·Information support of the state agricultural policy.
·Economic assessment of the agricultural sector of Ukraine.
·Providing open access to agricultural statistics and its analysis for government agencies, businesses and academic institutions.
4. New Principles of Agricultural and Rural Development Policy
The draft law introduces a holistic approach to state agricultural policy, in particular through:
·Supporting investments in infrastructure and production capacity of farmers.
·Development of agricultural cooperation.
·Implementation of measures to protect the environment and support organic production.
·Diversification of economic activities in rural areas.
·Expanding access to credit and innovative technologies.
5. Monitoring, Control and Accountability
The draft law introduces a multi-level control over the use of funds:
·Automated verification through the Red Flag system.
·Documentary verification of compliance of applications and documents.
·Physical inspection with an on-site visit to inspect the actual implementation of support.
Penalties for violation of the terms of support are provided:
·The obligation to return the funds received.
·A ban on receiving support for violators and their related parties for the next three budget periods.
·Administrative liability for officials for violations in the field of support.
·Criminal liability for collusion between the insured and the insurer.
6. Development of strategic documents
The draft law establishes the development and approval of the “Strategy for the Development of Agriculture and Rural Areas”, which will cover a period of seven years and will be approved by the Cabinet of Ministers of Ukraine.
7. New terminology and clarification of legislation
The draft law provides for amendments to the laws of Ukraine, in particular, changing the name of the current Law “On State Support of Agriculture of Ukraine” to “On the Principles of State Agrarian Policy and Rural Development Policy”. It also clarifies terms and definitions in the field of agricultural policy and support.
Stages of entry into force:
The Law will enter into force on the day following the day of its publication and will be put into effect six months after its entry into force. However, there are transitional provisions:
·The Payments Agency will start functioning after its establishment by the Cabinet of Ministers.
·The Integrated System of Administration and Control (ISAC) will become operational on January 1, 2027.
In general, the adoption of this draft law should ensure systemic changes in the management of support for Ukraine's agricultural sector, bring the country closer to EU standards, and create conditions for the sustainable development of Ukrainian agriculture and rural areas.
