Ukraine risks losing agriculture without changes of the state policy — L.Kozachenko

Source

APK-Inform

2036

 

 

 

 

 

 

 

It has been a year since the political and economical crises have been in Ukraine. Agriculture is the only industry faced the positive dynamics of growth in 2014. About the possibilities of the same tendency in 2015 will tell the President of the Agrarian Confederation Leonid Kozachenko

 

- Please tell what was the previous year for agriculture of Ukraine.

On the one hand the year was rather complicated, and on the other – rather successful owing the agricultural crops record yield. Despite the Crimea annexation, and without considering the conflict zone territory (nearly 12% of agricultural land) we harvested the large crop of grain. Besides the agriculture is the only industry of Ukraine kept growth and had the positive dynamics of development though there were rather difficult conditions in 2014. Besides, food commodities exports to the EU increased by 30%, and there was the Russian market loss, and the new markets opening.

 

- In 2014 there was the national currency devaluation which caused problems for agrarians due to the costs increase for import material and technical resources etc, though the national currency income also increase. What factors influence the agricultural commodities production in general?

Of course the costs increase for import material and technical resources for agricultural commodities production caused the situation which was faced in 2014, but on the other hand the export effect also improve. Thus owing exports increase and currency exchange devaluation the agrarian industry was able to save the profitability, otherwise the agrarians would face the significant losses. Note, the high temps of devaluation being kept since 2014 cause the positive influence on the agriculture. On the other hand it caused the food products prices increase, and also the costs increase for the material and technical resources which are necessary for successful preparation and realization of the spring field works.

 

- Will the material-technical resources appreciation cause the change of the major agricultural crops production volumes or the planted areas structure?

According to my opinion the planted areas structure to face changes. In spring we will plant the larger areas of the spring crops and corn. Probably the agrarians will be willing to increase the sunflower planted area owing the high prices. The ones who preferred to hold sales of sun seed in September-October, 2014 to date has the high income and will certainly try to repeat it in the current year. Probably the soybean planted areas will also increase, the same as of barley and spring rapeseed.

 

- How can the agrarians change the current situation caused by the finance shortage?

According to the experts estimation the working capital requirement for spring-field works had doubled. Thus, in the recent five years the working capital requirement for spring- planting campaign realization has been at the level of 30 bln UAH, meanwhile in the current season the stated rate is at the level of 70 bln UAH. The only difference is that under the previous conditions the banks were able to provide the working capital requirement, meanwhile under the current conditions they are not be able to do that even if it would be at the level of 30 bln UAH. The stated fact causes the serious problems during the spring-field works realization. Besides the bad forecasts on the results of the winter plants wintering will also negatively impact. Thus the average annual loss of winter crops is at the level of 12-15%, meanwhile in 2015 the stated rate to be higher due to the drought in autumn, snow absence on the most of the territory of Ukraine. It is not a problem if the agrarian has the working capital for replanting and for spring crops areas increase.

Besides another problem is the non-perfect legislative base and the recent changed have being faced in it providing the VAT refund for exports. It will cause the loss of 16 bln UAH which the farmers would not get from traders so the situation to worsen again. Besides the changes bring the land tax significant increase which will also influence the agricultural enterprises costs rise.

So it is necessary to consider all the current complications in order to be ready to act in spring. Thus it is to find the investor. The foreign investors attraction would help to solve the problem. Besides, the Government should use the Agrarian Fund tools while accepting the agricultural sector decision. It is necessary to revive the collateral grain purchase program under which the National bank would be able to make the focuses emission. It would not cause the problems on the financial market but would be pegged against production and would not stimulate the inflation.

 

- Due to the current situation in Ukraine the Government decreased the number of the state program for agriculture support in 2015. What is your relation to the regime of economy and what will be the impact on agriculture development in Ukraine?

Of course it is not the news that the Government does not support the industry. In the recent three years there has been the state support significant decrease. To date the Government decided to refuse from other forms of support except of the donation. The example is VAT refund. It is the discriminating measure being spread on agriculture only. Besides there is the prices manual control for social products causing the significant losses for producers, and also there is the corruption. As a result the farmers receive less than 25 bln UAH. Note if there is no efforts for the agricultural state policy change we may lose the industry, rather prospective, defining Ukraine as the serious global player.

 

Interviewed by Alina Stezhka

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