The agricultural sector is in for big changes. “2011 will be a Rubicon that will mark the beginning of radical changes in the domestic Agro-Industrial Complex (AIC),” Ukrainian Prime Minister Mykola Azarov declared. According to him, the AIC is three to five times less effective than its analogs in other European countries, and this must change.
That is why the prime minister charged the relevant committee with providing the farmers with everything they need for successful spring operations, and help them to buy fertilizers and plant protection supplies. The government is planning to credit the enterprises that are ready to invest into new plant varieties, genetically-improved cattle and the implementation of revolutionary agrarian technologies, etc.
The prime minister believes that agricultural science must also move forward, and produce the appropriate results, considering the government’s immense investments in the field. What is more, the ministry has to control that Ukrainian fields are sowed not only with the rape, but also with other cereals (e.g. buckwheat), in order to avoid the threat of the food deficit in the country.
How realistic are the goals set by the prime minister? Do they correspond to the real government policy towards the farmers? The Day has asked these questions to the experts.
COMMENTARIES
Mykola MYRKEVYCH, president of the Ukrainian Farmers and Landowners Association:
“No, the claims differ from what the government does in reality. Based on the agrarian budget, the quotas system for cereals and the Tax Code contents, we can come to only one conclusion — they say one thing and do another. This year the agrarian sector financing was reduced as compared to the previous year. However, even the money allocated to the AIC doesn’t come to those who produce 80 percent of milk or grow vegetables. This money is concentrated in regional centers and then it is given to the large agrarian companies on certain conditions. Who takes loans in the banks today? The farmers working on the land can’t afford it. The banks’ clients are large companies. They receive the payments on interest rates from the state.
“In my opinion, the AIC modernization should be started with a change of the agrarian policy in the country. We should start with basic things. For example, Ukraine is the WTO member. In other WTO member countries farmers are subsidized by the government and receive 100 dollars for a ton of wheat; later they sell their harvest for the highest possible prices. And what do the Ukrainian farmers have? They are not subsidized at all and they sell their wheat 100 dollars cheaper. How can they win the market competition? They can’t. That is why the government should introduce a transparent mechanism for subsidizing so that average farmers could aspire to those funds and eliminate ‘pocket’ subsidies. A preferential tax should be the next step. In 2010 the AIC transferred 25 billion hryvnias to the budget, but it received only 11 billion.”
Ivan TOMYCH, head of the Union of Members of Farming Cooperatives:
“What should the reform be based on if this year the AIC will have one of the smallest budgets in the last ten years. The whole sector is to receive about 25 percent less money than in 2010 — 10 billion hryvnias. If the budget had been composed based on the current legislation, they should have allocated no less than 40 billion hryvnias for the AIC. To implement radical reforms every year 50 billion hryvnias are needed! In 2011 we only have one fifth of the money needed for the fundamental changes in the AIC.”
