Adoption of the Draft Law No. 3863 "On amendments to the Tax Codex of Ukraine on value added tax from some operations with grain and technical crops" of 11.01.2014 will be detrimental to agricultural producers because of the low purchasing prices, and once again would seriously damage investment attractiveness of Ukraine, given the inconsistency of the decision-making in the State.

This was emphasized by the Association "Ukrainian Agribusiness Club" in letters to the Head of Verkhovna Rada V. Rybak, Head of the VR Committee on Industrial and investment Policy Yu. Voropajev, Head of the VR Committee on Budget E. Geler, Head of the Parliamentary group of Party of Regions  in the VR O. Yefremov, Head of the VR Committee on Agrarian Policy and Land Relations G. Kaletnìk, Head of the Parliamentary group of Political Party "UDAR (Ukrainian Democratic Alliance for Reforms) of Vitaliy Klitschko" V. Klitschko, Head of the VR Committee on European Integration, G. Nemyria, Head of the Parliamentary Group of the Communist Party of Ukraine P. Simonenko, Member of the VR of Ukraine S. Tigipko, Head of the Parliamentary Group of "Svoboda" O. Tiagnybok, Head of the VR Committee on Tax and Customs Policy V. Homutynnyk, Head of the VR Committee on Fighting against Organized Crime and Corruption V. Chumak, Head of the Parliamentary Group of "Batkivshchyna” A. Yatsenyuk.

The letters note that the Draft Law No. 3863 does not take into account the profitability of production and realization of grains and oil crops in Ukraine, which is extremely low.

Thus, in 2013/14 marketing year the average arithmetic return of the main agricultural crops is at the level of 2% mainly due to comparatively high profitability of sunflower this year with the index at 20%. Instead, the profitability of cereals production is substantially lower, and in some cases even negative.

Among grains the largest fall in profitability (27 points up to-7%) had corn. Barley of this season has the profitability of 2%, that is 9 points lower than the past marketing year. The profitability of wheat harvest in 2013 is only 5%. In this case, having the high share of the corn harvest in 2013, we can conclude about the marginal profitability of crop production and the limited capacity of the farmers concerning the financing of grains production in 2014.

"Under such circumstances the adoption of Draft Law No. 3863 will put a cross on records in Ukrainian agroindustry, and the next year we can expect reducing  of cereals harvest up to 40 million tons. Since the majority of farmers work with losses, they will be forced to cut  square, put fewer fertilizers, buy less quality seeds during the next sowing, that certainly will affect the performance of the yield and quantity and quality of future harvest”, -  said Expert of UCAB Igor Ostapchuk.

"Instead, the provision on VAT refunding  when exporting the grain and technical crops, introduced since January 1, 2014 according to the Law of Ukraine" On amendments to the Tax Codex of Ukraine on Rates of Certain Taxes " of 19.12.2013 № 713-VII will have a positive impact on the financial position of agricultural producers, increasing due to VAT refund when exporting their revenues up to 9.3 billion UAH and reducing the number of intermediaries when exporting grain and technical crops", - added Director General of UCAB Volodymyr Lapa.

The Association urged parliamentarians not to support the Draft Law "On amendments to the Tax Codex of Ukraine on value added tax from some operations with grain and technical crops" registered under No. 3863 of 11.01.2014 to prevent decreasing in agricultural production, stagnation of agroindustry and threats to food security of Ukraine.