A key driver for growth and development is in the agricultural industry. Ukraine has an immense amount of arable land with highly coveted “black soil” that can produce a wide variety of crops that are in high demand as the global population grows and agricultural commodity prices remain high. Unfortunately, we continue to talk about the gap between reality and the unrealized potential. Our organization, the American Chamber of Commerce of Ukraine, thinks it is a priority to develop a competitive and efficient agricultural industry in line with free-market principles.

So where are we today?

Ukraine plays an important role on global food markets and has a unique opportunity to become a leader in production and processing of agricultural commodities. Since Ukraine gained independence, much has been achieved in developing a market-oriented agricultural industry, which in turn attracted billions of dollars of strategic investment. The industry players that we represent have a goal to convert Ukrainian agriculture into a structured and competitive system that is appealing to potential European partners and traditional trading partners as well as for local producers and farmers. This market-based system will be a reliable platform for investment which will bring new technologies, growing crop and food production, increased budget revenues and jobs. Everyone wins.

But the existing challenges facing domestic and foreign investors, including a lack of clear policy, create confusion. We have witnessed conflicting declarations as well as regulations, legislation, tariff and non-tariff barriers that directly interfered in the activities of investors and ushered in non-market mechanisms that skewed the playing field and added uncertainty. These actions halted legitimate investment into more than doubling production over the next 10 years, in line with the stated goals by the president of Ukraine.

What has been done to address some of these issues?

The industry has come together to develop and communicate strategies and has strengthened our dialogue with key decision-makers. The productive dialogue has revolved addressing issues of: quotas, tariffs and non-tariff barriers to trade; untimely value added tax reimbursement; financing for farmers; the absence of laws and mechanisms that would enable farmers to offer collateral to forward contracting and refinancing brought to the table by investors; plans on how to implement a support system to protect the most vulnerable citizens from rising food prices; aligning agricultural policy with requirements for the upcoming free trade agreement with the European Union and other issues. If properly addressed, solutions in these areas will help the sector to grow and develop.

Recent decisions by President Viktor Yanukovych, the government and parliament have helped create a more cautiously optimistic outlook. We are proponents of free markets, level playing fields, predictable rules, transparency and equity in application of those rules. We will continue to work with the leading industry players, both domestic and foreign, as well as key policymakers, to do our part in ushering Ukraine down the road to stability through reforms in this important sector.
In these tough economic times and looming elections, we see that the prevalence of old habits of market intervention and a desire by some to enrich themselves through their positions will require the chamber and our members to engage actively to protect our investments. If we are successful, we can create an environment that will attract more investments and jobs. Therefore, we strongly urge policymakers to make the right decisions that are good for Ukraine, the business community and the world.


Jorge Zukoski is president of the American Chamber of Commerce in Ukraine which unites leading companies from more than 50 nations across the globe.

Kyiv Post