KYIV -- Government incentives are growing for Ukraine’s vital agricultural sector.
This year, 365 agri-producers bought grains and oilseeds at subsidized prices directly from the State Food and Grain Corporation of Ukraine. This was double last year’s number, according to the Corporation’s procurement director Viktor Kravchenko.
This means that the share of the country's producers buying grains directly increased to 78 percent, vs 22 percent buying through intermediaries. Kravchenko said his agency "is moving towards direct relationships with farmers in grain procurement.”
Farm analysts say the fastest way to boost Ukraine’s agro yields is not through high tech, but through injections of capital. During the Soviet era, seeds and fertilizers were heavily subsidized.
Buy Ukrainian Farm Machinery
Separately, the Ministry of Agrarian Policy and Food said it will provide subsidies totaling $18.5 million as rebates to farmers who buy agricultural machinery that is at least 30 percent made in Ukraine.
These subsidies will reach farmers through a special refund program, Minister Taras Kutoviy said Saturday at the 2016 Doing Agribusiness in Ukraine conference.
He said that the major Ukrainian farm machinery manufacturers already have reached localization rates over 50 percent. This means that half of components in machines are manufactured in Ukraine.
"We want the localization to grow,” he said. “We tell manufacturers in public that along with the economic potential they should boost the localization level.”
For Ukraine, agriculture carries an economic weight comparable to oil and natural gas are to Russia, according to Alexander Okunev, chairman of the Corporate Governance Professional Association.
Ukraine is one of the top three grain producers in the world. Hit with deindustrialization and economic recession, the nation’s economic growth strategy includes focusing on farm production and pursuing new export markets for major grains, such as wheat and corn.
According to the Agrarian Ministry, Ukraine's total grain harvest from the beginning of the year through November 15 totaled 59 million tons of grain, up about 1.5 percent over last year’s level. By year’s end, about 63 million tons is to be collected. Of this, about 23 million will be consumed by Ukrainians, leaving 40 million tons for export.
For comments and news tips, please write UBJ Kyiv Correspondent Igor Kossov at firstname.lastname@example.org
Photo: If Ukraine government has its way, farmers will buy Ukrainian tractors, not this Czech-built one.
Credit: UNIAN: Sinitsa Aleksandr)