Agricultural Committee Meeting

Agenda:

On March 6, the Chamber Agricultural Committee held its regular meeting devoted to the grain market update, discussion of the priority Draft Laws suggested for swift consideration by the Verkhovna Rada, consideration of draft list of regulatory acts of the Government of Ukraine that could be abolished/amended in order to improve the business climate, discussion of situation with the issues that might need additional attention, i.e. practices of State Agricultural Inspection, Guarantee Fund, etc.

At the beginning of the meeting, Mr. Sergey Feofilov, UkrAgroConsult, briefed attendees about the situation on the grain market. He stated that grain market prices are gradually increasing and wheat has reached its price of 280-283 USD/t and remains stable while there is strong competition of Ukrainian corn versus corn produced in the European Union and United States. Sunflower oil prices are up to the rate of 900 USD/t, but at the same time its stocks remain on the high levels. He also mentioned that Chinese market provides excellent export opportunities, however no large quantities have been exported there to date.

Committee Members have noted that situation with exports to China remains unclear mostly because of the non-transparent regulatory framework imposed on the trade relations with this country and the Ministry of Agricultural Policy and Food of Ukraine (Ministry) should promote competition as well as export contracts to this country should be open for all market participants.

Participants also discussed the current issues that need to be resolved by the Government of Ukraine (GoU). They expressed concerns that the current biosafety legislation poses serious risks for agricultural exports and it needs to be streamlined preferably in accordance with the norms currently used within the European Union, but at the same time this issue could be resolved only on political level. The second global problem is the lack of cheap financing for farmers on one hand, and timely and fair VAT refunds for exporters on the other. That would require subsequently addressing the Ministry of Finance with the request either to allocate the sufficient funds in the State Budget for these purposes or re-introduce VAT-exempt exports removing the need for allocation of additional financial resources by the GoU.  

Finally, participants agreed to consider the list of land tenure related legislation offered by the farming community and initiate a dialog with the NGOs representing interests of the farming community with the purpose of jointly advocating for liberalization of the regulatory framework by the Ministry.

For more detailed information, please click here to view the Minutes.