What politicians need to do to ensure that agricultural production in Ukraine can develop

As early as April, the Verkhovna Rada abolished mandatory certification of grain and grain storage facilities. This was the first step toward removing obstacles to the development of Ukrainian agribusiness.

The cancellation of mandatory certification of grain quality and grain storage services will reduce the number of permits that farmers need to obtain in order to conduct their activities. In addition, the introduction of voluntary grain certification in Ukraine is in line with global agribusiness practices. The Ministry of Agrarian Policy also announced in mid-May the cancellation of mandatory technical inspections of agricultural machinery.

Technical inspections will be carried out only in the event of relevant requests or complaints, as well as during scheduled inspections.

What else do farmers need for the sector to develop successfully? First and foremost, further deregulation in all areas—the abolition of all kinds of certificates, permits, and similar authorization documents. It is necessary to move toward self-regulation, that is, the transfer of regulatory powers to public associations of farmers.

Farmers also complain about the lack of tax incentives. “Even if we take the tax benefits that agricultural producers currently have—such as the fixed tax and the accumulation of VAT in the accounts of our farmers—their capitalization amounts to approximately $1.5 billion. If we talk about the European Union, farmers there receive support totaling €50 billion,” says agricultural market expert Volodymyr Lapa.

Another obstacle to the development of agricultural enterprises is the lack of working capital, for example, to purchase new machinery, since most equipment, particularly grain harvesters, is already outdated, causing farmers to lose a significant share of the harvest. Farmers could attract funds from banks, but they often fear borrowing there, as interest rates reach up to 30% per year. At the same time, according to experts, mechanisms to reduce the cost of loans under these conditions do exist. In particular, according to the Executive Director of the Bleyzer International Foundation, Vadym Bodaiev, the National Bank could require banks that receive refinancing from it to provide farmers with loans up to a certain amount at the lowest possible interest rate.

In addition, farmers expect the state to simplify the rules for leasing agricultural land plots and to resolve issues related to the use of unclaimed land shares. And, of course, the majority of farmers oppose the sale of agricultural land, which one or another politician periodically raises. The illusory benefits of this step will never outweigh the threats posed by opening the land market under current conditions.

Mykola Peshkov