The Cabinet of Ministers changed the rules of state support for farmers: new conditions for compensation for agricultural machinery

The Cabinet of Ministers of Ukraine has updated the mechanism of state support for the agricultural sector by amending the Procedure for the use of funds provided in the state budget for partial compensation of the cost of domestically produced agricultural machinery and equipment, approved by the CMU resolution dated March 1, 2017 No. 130. The relevant changes were approved by the Government resolution dated July 1, 2026.

"Judicial-Legal Newspaper" has thoroughly analyzed who the innovations concern and how the compensation conditions will change.

Who will be able to receive 40% compensation

First of all, according to the Procedure, the innovations primarily concern farmers working in communities affected by the war. The document simplifies the conditions for obtaining increased compensation, details the list of supporting documents, and at the same time establishes additional mechanisms for verifying the right to state support.

One of the key changes was the update of paragraph 13 of the Procedure. From now on, the right to partial compensation of 40% of the cost of purchased machinery or equipment (excluding VAT) will be granted to agricultural producers who simultaneously meet several criteria. Primarily, this concerns business entities that, on the day of application submission, own or use land plots, at least 80% of the area of which is located in territories of possible or active hostilities. Only those territories included in the List of territories where hostilities are (were) conducted or temporarily occupied by the Russian Federation, approved by the order of the Ministry of Development of Communities and Territories of Ukraine, in the version effective as of April 7, 2026, will be taken into account.

An important condition is also that for the relevant territories at the time of application, no date for the end of hostilities or cessation of the possibility of their conduct should be determined. In addition, the producer must be registered in such a territory. Separately, the Cabinet of Ministers clarified that land plots located in temporarily occupied territories are not included in the calculation of the 80-percent indicator.

Thus, the changes effectively expand the opportunity to use the program specifically for farmers who continue to work under constant security risks.

Which documents will confirm the right to compensation

Along with the expansion of the program, the government detailed the mechanism for verifying the right to receive increased compensation. To confirm compliance with the established criteria, the agricultural producer must add to the application:

• an extract from the State Agricultural Register regarding the total area of land plots owned or used by them;
• a certificate from the territorial body of the State Geocadastre containing information about the area of land within the relevant regions with a breakdown depending on their location in combat zones.

At the same time, the territorial bodies of the State Geocadastre must issue such a certificate within five working days after receiving the request. Grounds for refusal to issue the certificate are also established. In particular, such a decision may be made if the agricultural producer did not submit an extract from the State Agricultural Register or if the information about the total land area indicated in the extract does not correspond to the data of the State Land Cadastre.

Effectively, the Cabinet of Ministers introduced a mechanism of double verification of data through two state information resources. This should minimize the risks of unlawful receipt of budget funds and prevent the use of unreliable information about the farm's land bank.

Producers were allowed to deviate from the estimated cost of equipment

Another significant innovation concerns the determination of the cost of equipment subject to state compensation. Paragraph 11 of the Procedure was supplemented with a provision according to which the price of machinery or equipment, determined by the contract between the manufacturer and the agricultural producer, may differ from the estimated cost indicated in the Ministry of Economy's list of equipment by up to 15%. Such deviation is allowed in case of changes in the enterprise's production costs. This concerns, in particular, the increase or decrease in the cost of components, units, assemblies, raw materials, materials, energy carriers, labor costs, equipment maintenance, administrative expenses, or sales costs.

It is noted that previously the difference between the estimated price in the list and the actual cost of equipment could create difficulties for both manufacturers and buyers, especially in conditions of an unstable economic situation and constant fluctuations in production costs. The introduction of an allowable 15-percent corridor is intended to make the program more flexible and take into account real economic conditions.

What farmers should pay attention to

Despite the expansion of opportunities to receive state support, the changes simultaneously strengthen the requirements for confirming the right to compensation. Before submitting an application, agricultural producers should ensure that information about land plots is up-to-date both in the State Agricultural Register and in the State Land Cadastre.

Any discrepancies between these registers may be grounds for refusal to issue a certificate by the State Geocadastre, without which receiving 40% compensation will be impossible. In addition, applicants should consider that the right to increased compensation will be determined using the List of territories in the version effective as of April 7, 2026, even if the status of certain territories changes later.

Thus, the changes adopted by the Cabinet of Ministers combine two approaches: on the one hand, they expand state support for farmers who continue to work under war conditions, and on the other hand, they introduce clearer mechanisms for document verification and budget fund usage. It is expected that the updated procedure will simplify access to compensation for conscientious producers while ensuring transparency in its provision.

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