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27.05.2026
COMPENSATION FOR AGRICULTURAL LOSSES: A Matter of National Economic Security
Bohdan Yaskiv, Senior Partner at TOTUM LF, Attorney-at-Law, PhD in Law (Source https://biz.ligazakon.net/analitycs/243960_zbitki-agrarv-vd-vyni-mekhanzmi-kompensats)
The issue of compensating Ukrainian farmers for losses caused by Russia’s full-scale invasion has long gone beyond the scope of purely business interests. It is now a matter of national economic security.
The agricultural sector remains one of Ukraine’s key sources of foreign currency revenue and plays a critical role in ensuring the country’s food security. According to the Kyiv School of Economics, as of early 2024, the direct losses suffered by Ukraine’s agricultural sector due to Russian aggression had already reached approximately USD 80 billion. And this figure does not include indirect losses, lost profits, or long-term environmental consequences.
At present, however, there are still no fully effective mechanisms for compensating such losses. Therefore, it is important to understand what mechanisms already exist, which ones are currently being developed, and what actions should already be taken today in order to qualify for potential compensation in the future.
To discuss compensation, it is essential to clearly define what exactly is subject to reimbursement. Legal practice distinguishes between two categories of losses.
Direct and Indirect Losses
Direct losses are those that can be immediately identified and quantified: destroyed or damaged agricultural machinery, ruined grain elevators, warehouses, livestock complexes, as well as lost crops and harvests. These are assets that existed but were either destroyed or rendered unusable.
Indirect losses are more difficult to document, yet they are no less significant and often exceed direct losses in scale. These include lost profits caused by the inability to cultivate land, disruption of production cycles for months or even years, as well as expenses related to demining and soil restoration.
The latter represents a particularly painful category of damage: contamination of agricultural land by explosive remnants of war and toxic substances effectively removes such land from economic circulation for an indefinite period of time.
The scope of recoverable damages should include not only direct losses — destruction or damage to property and restoration expenses — but also lost profits, meaning income that could reasonably have been earned under normal circumstances had the violation not occurred.
Ultimately, the completeness and quality of the evidence base will determine the amount of compensation an agricultural producer may actually receive once compensation mechanisms become operational.
The Key Challenge: Proper Documentation of Losses
One of the most pressing practical issues is documenting losses under conditions of ongoing or recently ended hostilities.
Agricultural producers face several systemic obstacles:
- loss of primary documentation due to destruction of offices and storage facilities;
- inability to physically access damaged sites because of mine contamination or restricted access;
- shortage of qualified appraisers in affected regions.
At the same time, the burden of collecting and preserving evidence lies entirely with the injured party. The outcome of any future compensation process — regardless of the mechanism ultimately implemented — will largely depend on the quality and completeness of such documentation.
What Should Be Collected Now?
Agricultural producers should already be gathering:
- official reports from the State Emergency Service regarding shelling and destruction;
- satellite imagery available through open and partner platforms;
- photo and video evidence with geolocation and timestamps;
- independent expert assessments regarding property value and lost profits.
It is also critically important to separately document soil contamination and mine contamination, as these constitute independent categories of damage assessed under separate methodologies.
In addition, farmers should restore or collect:
- title documents confirming ownership or lawful use of property;
- supply contracts (to substantiate lost profits);
- all financial documents confirming the value of destroyed or damaged assets.
Future success in compensation claims will directly depend on the actions taken immediately after the loss occurs.
Existing Ukrainian Compensation Mechanisms
Current Ukrainian legislation provides several mechanisms that are either already functioning or in the process of implementation. However, it is important to understand that these mechanisms primarily serve as support tools rather than full compensation for wartime losses.
The key regulatory act remains Resolution No. 326 of the Cabinet of Ministers of Ukraine dated March 20, 2022, “On Approval of the Procedure for Determining Damage and Losses Caused to Ukraine as a Result of the Armed Aggression of the Russian Federation,” which has been repeatedly updated.
For the agricultural sector specifically, a separate methodology approved by the Ministry of Agrarian Policy on May 18, 2022 (Order No. 295) regulates the assessment of damage to the land fund.
Among practical support instruments already in operation is compensation of up to UAH 4,700 per hectare of damaged crops (with a cap of 2,000 hectares per farm) for agricultural producers operating in territories of active or potential hostilities.
As of January 1, 2026, a new state partial compensation program for businesses, including agricultural enterprises, entered into force. The program предусматривает:
- compensation of up to UAH 10 million for destroyed or damaged property;
- up to UAH 1 million annually for war-risk insurance premiums.
The program applies to the regions most affected by the war, including Dnipropetrovsk, Donetsk, Kherson, Zaporizhzhia, and Kharkiv regions.
Another important institutional step was the adoption in 2025 of legislation establishing the Payment Agency — a specialized public institution responsible for administering financial support programs for farmers according to European transparency standards. This is an essential element of Ukraine’s integration into the EU Common Agricultural Policy and a prerequisite for access to European agricultural support funds.
Nevertheless, these mechanisms should be assessed realistically. They do not fully cover existing needs and function more as stabilization tools than as instruments for full recovery of losses.
International Compensation Mechanism: RD4U
From the perspective of actual enforceability, the most promising mechanism is the international track — primarily the Register of Damage for Ukraine (RD4U), established under the auspices of the Council of Europe in May 2023 pursuant to a UN General Assembly Resolution.
The Register itself is not a compensation body. Rather, it serves as the first and necessary step toward a future international compensation mechanism by collecting, recording, and organizing claims submitted by individuals, businesses, and the State of Ukraine regarding losses caused by Russian aggression.
The substantive review of claims and determination of compensation amounts will be handled by a future International Compensation Commission, negotiations on which are currently ongoing. The first meeting of the Intergovernmental Negotiation Committee took place in The Hague in March 2025 with representatives from more than 50 states participating.
As of early 2025, several categories of claims have already been opened for submission. Particularly relevant for agricultural producers are claims related to damage or destruction of non-residential real estate.
Applications may be submitted exclusively through the Diia web portal.
Why is this mechanism considered the most promising?
Because it is linked to a real financial source — frozen assets of the aggressor state held abroad. The seizure and future use of these assets to compensate victims is precisely what distinguishes RD4U from purely declarative initiatives.
The G7 countries have already agreed in principle on mechanisms for using proceeds generated from frozen Russian assets to support Ukraine.
The process from documentation to actual payment will undoubtedly be lengthy, but unlike many alternative mechanisms, it remains realistic.
Judicial Protection and National Court Practice
Judicial remedies represent another actively used avenue, although one with significant limitations.
Following Russia’s expulsion from the Council of Europe in March 2022, enforcement of new individual judgments of the European Court of Human Rights against the aggressor state has effectively become impossible. Nevertheless, such decisions retain substantial value for future international tribunals and compensation processes, as they create legal precedents and strengthen evidentiary foundations.
Ukraine has already filed interstate applications against Russia, and the ECtHR has recognized Russia’s responsibility for numerous violations. However, enforcement remains unresolved.
Ukrainian national courts have taken a different approach. They increasingly disregard the sovereign immunity of the aggressor state due to its gross violations of Ukraine’s sovereignty and award compensation to agricultural enterprises for destroyed property and lost profits.
Such judgments already exist and their number continues to grow. The primary challenge, however, lies in enforcing these decisions abroad through the seizure of Russian state assets.
Although prospects for actual enforcement remain uncertain, these court decisions may become important supporting instruments within future international compensation mechanisms.
Practical Recommendations for Agricultural Producers
Agricultural producers should not expect rapid compensation payments from the aggressor state. However, they must already begin systematically documenting every loss suffered.
This includes:
- preserving all ownership and title documents;
- recording lost profits;
- collecting SES reports;
- preserving satellite imagery and photo/video evidence;
- involving independent appraisers.
For agricultural businesses, separate documentation of soil contamination and mine contamination is especially critical.
At the same time, claims should be submitted to the Register of Damage for Ukraine through the Diia platform as soon as relevant categories become available.
Currently, this remains the most realistic pathway toward future compensation backed by a concrete financial mechanism tied to frozen Russian assets.
Finally, agricultural producers should not ignore national court remedies or available state support programs despite their current limitations. These mechanisms create an important legal foundation and may strengthen future international compensation claims.
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