Adoption of the Law "On Amendments to Article 3 of the Law of Ukraine" On State Support of Agriculture of Ukraine " (concerning the regulation of purchasing prices for milk) may result in procurement of milk and lower prices for its producers. This was stated in the Association "Ukrainian Agribusiness Club" (UABC), commenting on the adoption by Parliament in second reading the draft law with registration number 10456.

Estimated UCAB, making milk to the list of objects that are subject to government price regulation will lead to losses for farmers who constitute half a billion UAH annually.

According to the experts UCAB, the second reading of the bill have been made corrections to the binding contract between the purchaser of milk and its supplier. Given the presence of more than 1.5 million owners of dairy cattle and frequent price changes that need to execute documents, in practice to implement the law without increasing the number of intermediaries is impossible.

 "Such a decision will cause emergence of a significant number of agents that will sell milk to dairy companies for contract, and independently regulate the relationship with small producers of milk. Given that last year milk was bought at farms for 5 billion UAH, every year farmers will lose at least 500 million UAH by paying a single tax agents (5%) and to pay for their services (in addition at least 5%). This amount will actually be payment of services of intermediaries to ensure the contractual relationship, - informs the CEO UCAB Volodymyr Lapa. - Now only some part of milk is bought indirectly, in case of entry into force of this law it will become a mass phenomenon".

"We recognize the efforts of MPs on the need for regulation of relations between suppliers and buyers of milk, - says expert, - but the way in which this is done, can have much more negative impact than positive."

In turn, President UCAB Alex Lissitsa states that such pseudo assistance substitutes a systematic work aimed at ensuring greater economic independence farms.

"From the beginning of discussion of the Tax Code we say that Ukraine has created a unique environment where selling milk (and other products) on unorganized market is much favorably than the contractual relationship, even in the framework of cooperative, because in the latter case, VAT and tax on personal income make implementation unprofitable "- highlights the president UABC. He adds that the laws of development cooperation, developed by Ministry of Agriculture and Food, registered by deputies, but not considered by the Parliament.

In UCAB hope that the law "On state support of agriculture of Ukraine" (concerning the regulation of purchasing prices for milk), particularly binding of the contractual relationships in the procurement of milk, will take effect only after the legislative changes to support development cooperation and the work on the actual creation sufficient number of cooperatives. In this regard, the Association "Ukrainian Agribusiness Club" decided to address a letter to President Viktor Yanukovych with a request to veto this law and to consider proposals to prevent loss of millions of milk suppliers.

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Tetiana Kotyk