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18 August 2019

Oleh Nesterov

Subsidies and other types of government support for the sector lead to a reduction in competition with producers in other countries, weaken and have nothing to do with progress. This is the view point of the agrarian community part who believes that natural selection can lead the sector to success.

But then the country will be deprived of industries that require long-term investments. Can state support in Ukraine be effective? Can it lead the companies of the agricultural sector to progress? What can be the role of the state in the innovation and digitization of the agricultural sector?

State support. The annual epic with the distribution of the budget and the procedures for the implementation of state support continued this year. There was a turn of the course with «quasi-accumulations» in support of animal husbandry. The pledged 1% of GDP for 5 years for the agricultural sector in this year is UAH 6.3 bln, but this support would be more effective if the state consolidated the directions on which funding will be provided for the next five-year period.

Programs for restoring the industries that do not bring «fast» money, such as the dairy herd management, compensation for the cost of breeding animals and materials, support for horticulture and viticulture should be stable and financed for 5-7 years in combination with tax benefits.

A positive for agricultural producers would also be the possibility of exempting from VAT when importing equipment. It would be possible to channel at least part of the funds from the 945 mln allocated under the program of compensation for the value of domestic agricultural machinery to support innovation and digitalization: the introduction of innovative technologies, support engineering companies and precision farming to modernize and improve the high technology of key components of production.

Innovations. Blockchain, vertical farms, drone technology, automation of production and precision farming. All this can be combined into one block - innovation. Annual growth of precision farming technologies is 12.2%. Large agricultural holdings are setting up positions of innovations coordinators. They are looking for and selecting startups and introducing them into production in their companies. However, this occurs at the level of self-organization of the business without the participation of the state. The same Unit.City or AgroHUB evolves solely on the desire of the business to grow

What could the state do? The first and most important thing is to be interested in implementing the developed solutions at state enterprises, in ministries and departments (the same Blockchain). Secondly, to help start-ups related to production by creating tax holidays or compensating loan rates (at least for short-term ones), the exemption from import VAT on equipment for 2-3 years.

Index of doing business. Ukraine in the world ranking Doing Business of the World Bank in 2017 rose to 76th place in the ease of doing business, but there was a decrease in 6 out of 10 points. Despite the authorities' attempts to overcome the bureaucratization of the system, there are still gaps in the agro, including due to the «fruitful» work of the Verkhovna Rada, which last year adopted only one of dozens important bills for the industry.

Examples of inhibition by the state of access to innovation can be the bill № 6606, which is designed to restore the access of farmers to the market of innovative pesticides, or the type approval procedure for agricultural machinery, which completely duplicates the European procedure, but the old one. The procedure for approving the type on the territory of Ukraine of tractors of world brands that invest millions in R & D takes a long time. What to do here? Back to the main request of all agrarians, which we constantly hear from them in the process of communication: do not interfere with the work, and if the manufacturer already has the means to purchase valuable imported equipment of the best samples and wants to acquire an innovative hybrid and protect it qualitatively, do not create artificial obstacles and provide him with this opportunity.

 




  • Baker TILLY
  • Agroresurs
  • AMAKO
  • Lozova Machinery
  • Limagrain
  • Zeppelin
  • GrainAlliance
  • Quivogne
  • Amazone
  • Goodvalley
  • IMMER Group
  • kws
  • LNZ Group
  •  Agricom Group
  • Агроріск
  • Райффайзен Банк Аваль
  • horsch
  • uahk
  • Сygnet
  • Syngenta
  • Svarog
  • Agco
  • Lembke
  • Agroregion
  • ugt
  • Agroswit
  • Eridon
  • Monsanto
  • MHP
  • Maschionet
  • Maisadour
  • DuPont Pioneer
  • Alfabank
  • Agroscop
  • Agrimatco
  • Avgust
  • NCH Advisors
  • Crop Life International
  • Continental farmers Group
  • AgroGeneration
  • credit agricole
  • danone
  • claas
  • john deer