European funding for Ukraine chicken magnate angers farmers

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Europe’s development bank has pumped nearly $1bn into chicken farms and other large Ukrainian food businesses since Russia’s full-scale invasion, funding cheap exports that have recently helped swell farmer protests across the EU. 

Since 2022, the European Bank for Reconstruction and Development has lent $890mn to Ukraine’s producers of eggs, poultry and sugar, which will soon face quotas to protect EU jobs, the bank told the Financial Times. 

In Poland, the largest EU chicken producer, farmers have spearheaded months-long protests against the EU’s decision to drop restrictions on Ukrainian imports. Polish agribusinesses are particularly concerned about European financing for MHP, Ukraine’s biggest poultry company, which received more than one-fifth of all the EBRD’s lending in the past two years.

Janusz Kowalski, an opposition lawmaker who was secretary of state for agriculture in the previous Polish government, told the FT that “the poultry industry in Poland is collapsing and one company, MHP, is getting rich. Duty-free imports of chicken from Ukraine and other agricultural products should be halted immediately.” 

MHP executive chair John Rich denied that his business alone was undercutting Poland’s production. He said he had sympathy for disgruntled farmers, but because of other more serious problems they are facing, such as cuts in fuel subsidies and climate-related regulations.

“If I was a farmer, I would be demonstrating as well,” Rich said. But restricting Ukraine’s exports “doesn’t make sense policy-wise”, he said, noting that Ukrainian agribusiness was “caught up” between upcoming EU-wide elections, changes in the common agriculture policy and a political move to the right.

After farmers recently blockaded roads and ports in Poland, France, Germany and a dozen other countries, Brussels agreed to set caps on Ukrainian imports of poultry, meat and sugar from June.

Rich however said his exports had no significant impact on EU prices because his company in effect took market share from fellow exporters Brazil and the UK. Brussels reintroducing curbs on Ukrainian exports would simply be “changing the deck chairs” and helping Brazil regain export leadership, Rich argued. He also forecast that MHP would export more to Saudi Arabia and other markets where demand is growing. 

Annual EU poultry imports from Ukraine have more than doubled since Russia’s all-out attack two years ago, according to Eurostat, the bloc’s statistics office.

Andrzej Danielak, president of the Polish association of poultry breeders and producers, said the EU was undermining its own farming agenda by helping finance giant Ukrainian producers like MHP that did not have to adhere to the same animal welfare standards or EU rules on labour and production.

Rich said his poultry farms were set up according to EU norms.

MHP employs 28,000 people and controls about 360,000 hectares of land in Ukraine — an area bigger than EU member Luxembourg. It had $2.64bn in revenues in 2022. 

The company’s founder and CEO, Yuriy Kosiuk, is a former commodities broker and one-time adviser to Petro Poroshenko, the former Ukrainian president. He retains 60 per cent of the shares, which are also listed on the London stock exchange. Prior to the war, his company paid out $600mn in dividends.

MHP is registered in Cyprus but Rich said the company pays taxes in Ukraine — and has contributed $160mn to the state coffers last year.

In October the EBRD provided $100mn out of a $480mn international funding package for MHP, saying the company was “of vital importance to Ukraine’s and global food security” as well as playing “a crucial social and economic role in Ukraine, which becomes especially important while the country is at war”.

Siegfried Mureşan, vice-president of the centre-right EPP bloc in the European parliament, told the FT that the lending was essential to support Kyiv’s agricultural exports. “The economic security of Ukraine is in Europe’s interest. Ukrainian food is needed in Africa and the Middle East.”