Cooperation with the EU is advanced and profitable — L.Kozachenko
The European Union has provided Ukraine with the unique opportunity to export domestic commodities at the reduced or zeroed duties till November 1, 2014. The trade preferences regime will be faced by the Ukrainian agro-industrial complex. The Chairman of the Business Council under the Cabinet of Ministers of Ukraine, the Chairman of Community Council under the Ministry of Agrarian Policy and Food of Ukraine, the President of Ukrainian Agrarian Confederation, Leonid Kozachenko tells about the influence of the trade preferences, the Free Trade Zone and the European Union on the Ukrainian agro-industrial complex.
- How do you estimate the prospects of the cooperation between Ukraine and the EU within the agro-industrial complex?
The European market is the most liquidity market in the World, which first of all guarantees the supplied commodities payment receive, and the simplicity of the execution of necessary documentation with the buyers. For example, there is the “telephone justice” in the European Union, when it is possible to conclude the contract by telephone call. Thus, the EU is the huge market, with the population of nearly half a billion. So it is the advanced and profitable cooperation for Ukraine.
-How do you estimate the influence of the independent trade preferences on the development of the domestic agro-industrial complex?
It is very nice of the EU to provide that, because Ukraine has to take the corresponding measures. Thus, it is necessary to sign some documents in order to introduce the Free Trade Regime with the EU. At the same time, the EU had already introduced the trade preferences for Ukraine. It will give the opportunity to get 500 mln EUR from the commodities realization by November 1, 2014. Meanwhile the agro-industrial complex of Ukraine will get additional 300 mln EUR.
- What segments of the Ukrainian agrarian sector are more fragile of there is the FTZ creation? What domestic agricultural commodities will be competitive on the European market?
As for the Free Trade Zone with the European Union, there is a problem of allocation of quotas for certain commodities. At the same time, it will be possible to import any quantities of the stated commodities from the EU duties free. The stated issue creates the tension. But there is the positive moment as well. The European Union agreed not to subsidize the exported commodities. There had been such subsidies till to date. Thus, the import of subsidize pork complicated the work of the domestic enterprises, which were not able to compete or incurred losses. But, there are certain branches of the Ukrainian agro-industrial complex (for example, fat and oil industry) which will not face the duties and barriers. Thus, the share of the Ukrainian products on the EU market used to be at the level of nearly 30% of the general exports on it. Under the current conditions, it is possible to increase the stated rate by 10%. There are new capabilities on the supplies of the gourds, vegetables, fruit, especially berries and mushrooms.
- How will the association between Ukraine and the EU influence on the value of the European imported agricultural commodities, crop protecting agents, seed material and agricultural machineries?
The food supplies from the EU will not significantly influence on the prices decrease, and they will remain stable. Besides, there will be the eventual rise of assortment and supplies. Though the stated growth will be slight, due to the low financial responsibility of the Ukrainian population. At the same time, if the country orients on the European market, it is necessary to introduce the new regulations, new quality requirements and also to certify the enterprises. Ukraine needs nearly 11 bln USD in order to certificate all the enterprises upon the requirements of the EU. Only after the stated procedure they will be able to supply commodities on the European market. Meanwhile, the stated issue will positively influence on the food products' safety and quality improvement.
- How do you estimate the investment attractiveness of the Ukrainian agro-industrial complex. What industries could be interesting for the European investors?
The investment attractiveness of the Ukrainian agro-industrial complex is high. The reserves are rather large, but the potential is realized by 35% only. Thus, Ukraine is able to triple the agricultural commodities' general production.
What industries could be interesting for the investors? For example, plant industry, meat and dairy production. According to the data of FAO, Ukraine completed the ten-years period of global meat production development. To date the country starts the five-years development program for dairy products. Note, it is the capital-intensive sector and it will attract a lot of investment funds. At the same time, the European investors will repurchase and found the new capacities on the sun and soybean oil production.
Interviewed by Alina Styozhka
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