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24 October 2017

News

03.10.2017

Agrarian associations expressed their proposals on state support for agro-industrial complex in 2018

On October 4, a round table on “How to make state support of agribusiness in 2018 as effective as possible” was held. At the meeting, the heads of agricultural profile associations, members of the Public Council under the Ministry of Agrarian Policy, people's deputies formed the position of the sector on the order of the target programs and the use of state support funds for 2018.

In September, the Cabinet of Ministers of Ukraine submitted to the Verkhovna Rada of Ukraine a draft Law of Ukraine “On the State Budget of Ukraine for 2018” (Reg. No. 7000), which provides UAH 6.3 billion for state support to the agro-industrial complex.

The concerns of agrarians are caused by the proposed reduction twice (compared with 2017) of the disbursements for the payment of budget subsidies for the development of agricultural producers and stimulation of agricultural production. 

According to representatives of agrarian associations, the reduction of budget subsidies from UAH 4 billion (in 2017) to UAH 2 billion (in 2018), is completely unjustified. The payment of the subsidy is aimed at the abolition of the special tax regime in the field of agriculture and forestry, as well as fisheries. This program is designed to support agricultural sectors that oriented towards the domestic market. Representatives of agrarian associations believe that, unlike other types of state support for agriculture, the payment of budget subsidies takes place in an automatic mode, rather than by the “manual” distribution of budgetary resource, thus minimizing corruption factors.

In their opinion, an increase from UAH 500 million to UAH 945 million for partial compensation of the costs of agricultural machinery and domestically produced equipment is inappropriate. After all, experts estimate that in the current year the use of these funds will not exceed UAH 250 million that is 50% of the total amount. At the same time, according to the resolution of the Cabinet of Ministers of Ukraine dated March 16, 2017, No. 147 for 2017, the indicators of agricultural machinery localization (which is a condition for partial compensation of its value) are set at 35%, and in 2018 this indicator will reach 45%, which somewhat reduces the capacity of the market of domestic agricultural machinery, and therefore it is extremely illogical to increase budget disbursements in the indicated direction. Today the sales indicator of agricultural machinery of domestic production is about UAH 1.5 billion. In such situation, for the payment amount of UAH 945 million for partial compensation of the agricultural machinery cost, which amounts to 20%, as well as on condition of its increase to 30%, the indicator of the total cost of the released and sold equipment should increase by 2.5 times, which is absolutely impossible.    

The amount of funds provided for the expenses under the budget program “State support of the livestock industry” for 2018 is considered unjustified and amount to UAH 1.6 billion - it provides the partial cost compensation of construction and reconstruction of livestock farms, complexes and milking parlors. At the same time, according to the Association of Milk Producers of Ukraine and the Association of Pig Breeders in Ukraine, the total amount of necessary financing for this purpose is up to UAH 400 million.

  Thus, agrarian associations are proposed to consolidate the volume of expenditures under the budget program “State support of the livestock industry” in the amount of 700 UAH million (UAH 300 million for compensation of tribal procurement and UAH 400 million for the construction and reconstruction of livestock farms), while increasing the charges of budget program “Financial support of agricultural producers” at least to the level of 2017 - 4 UAH billion.

Agrarian associations have also made proposals to clarify and concretize the program of farms development for the providing of financial support to agricultural cooperatives, the funding for the insurance of crops and perennial plantations of farms.

 




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