Government prepares new instruments to support farmers in frontline regions

The Government is steadily increasing its support for agricultural producers in frontline regions. It is developing new compensation mechanisms, a tailored approach for high-risk farming areas, and additional tools for businesses operating in or relocating from combat zones.

These issues were discussed during an off-site meeting of the national platform “Dialogue Between Government and Businesses” in Kramatorsk, Donetsk region. The event featured Taras Vysotskyi, Deputy Minister of Economy, Environment, and Agriculture of Ukraine (via video link); Vadym Filashkin, Head of the Regional Military Administration; and representatives of banks, tax authorities, communities, and agricultural companies.

“Despite the war, the agricultural sector in Donetsk region continues to operate. The Government's role is to sustain it and create conditions for recovery. We need to focus resources where they are most needed and, together with the business community, develop solutions that will actually work,” noted Taras Vysotskyi.

Meeting participants discussed the most pressing issues and ways to address them. In particular:

Introduction of a High-Risk Farming Zone

This is a new large-scale program. A plot’s status is determined by two key criteria.

Climatic: the main indicator is the level of available moisture in the soil.

Consequences of hostilities: the location near the border with the aggressor state or the line of contact is taken into account, as well as contamination with explosive objects.

A fixed payment per hectare is planned for such plots. Funds will be drawn from a separate financing fund, which is replenished in part by export duties on soybeans and rapeseed. Therefore, the first payments are expected in the summer—once sufficient resources have accumulated in the fund.

Compensation for Producers in Frontline Areas

The Government is developing a separate support mechanism for land located 20–50 km from the combat zone—where farming is often impossible or economically unfeasible.

The main objective is to cover farmers’ minimum expenses: a portion of rent and the tax burden. This will help preserve production and, equally important, maintain stable relationships between landowners and tenants.

Simultaneously, the Government is drafting a decision regarding compensation for land occupied by fortifications. This involves a systematic approach that will allow for the reimbursement of losses to both landowners and land users.

Draft Law No. 14117 is intended to establish the legal framework for this. The document provides a framework for future compensation mechanisms.

Support for Relocated Businesses

The meeting participants paid particular attention to the challenges faced by relocated businesses. The Government is preparing amendments to help regulate the legal status of such enterprises. This will help remove barriers in working with counterparties, unblock tax procedures, and eliminate uncertainty for companies that retain a legal connection to the affected regions.

The participants also raised the most pressing issue—access to land. The Ministry of Economy, Environment and Agriculture together with line agencies, is developing mechanisms to enable relocated businesses to obtain land plots more quickly so they can resume operations. Among the proposed solutions are the possibility of allocating land without auctions in certain cases and more flexible lease terms.

At the same time, there is a need to understand that land is a limited resource, and demand from relocated businesses significantly exceeds the available plots.

“We need to create a fair and balanced distribution model. We must develop this solution together with all regions affected by the war—to determine priorities, volumes, and the order of receiving agricultural land,” noted Taras Vysotskyi.

Tax Incentives

Current regulations often fail to account for the actual conditions under which these businesses operate—loss of assets, risks to harvests, and limited solvency. The Government is already working on changes. This involves a package of measures providing tax incentives for businesses in combat zones and affected territories, as well as additional relief. These include revising approaches to the minimum tax liability, deferring certain payments, and establishing more flexible terms for fulfilling tax obligations.

In particular, the Verkhovna Rada is considering two draft laws, No. 15123 and No. 15123-1, which change the approach to calculating the minimum tax liability for agricultural producers in combat zones and in de-occupied territories.

Funding

Compensation for the cost of Ukrainian agricultural machinery and equipment for frontline areas has been increased to 40%.

The program includes over 14,000 items from 166 manufacturers. In 2026, UAH 1.8 billion is allocated for it—by 50% more than last year.

Separately, the possibility of supporting the purchase of security equipment, in particular electronic warfare systems, which are becoming essential for field operations, is being considered.

State Program Affordable Loans at 5-7-9%

Special lending terms are also in effect—for businesses in frontline territories, the interest rate has been reduced to 3%, and for investment purposes, to 1% for the first 5 years.

Grants for Processing

For businesses in frontline territories, compensation covers up to 80% of the project cost. This allows enterprises to launch value-added production more quickly, even under conditions of heightened risk.

Land Reclamation and Development

Agricultural producers in frontline territories can receive up to 80% compensation for the cost of work—for the reconstruction and construction of new systems, individual facilities, and pumping stations. This is critical for stabilizing crop yields amid climate change and infrastructure loss.