The Ukrainian Agricultural Council (UAC) has developed proposals for improving the mechanism of state support for the agrarian sector for 2019 proposed by the Government, in order to avoid mistakes made in the current year. All the largest agrarian associations that are part of the All-Ukrainian Agrarian Forum, a number of people’s deputies and presented at a press conference on October 16 in Kyiv supported these proposals.

"We are extremely dissatisfied with what is happening in the field of state support this year and with what the government proposed to do in the next year... In 2018, UAH 6.311 billion were directed for the state support of the agrarian sector. Only UAH 777 million of this amount were used as of August 20, which is 12% of the total. This means that the programs do not work. And despite this, the government does not heed the advice of experts, and leaves everything as it is and even worsens the situation", - said the deputy chairman of the UAC, Mikhail Sokolov, during a press conference.

According to him, in order to address the most acute problems facing the Ukrainian agrarian sector, it is necessary to approve amendments to the draft State Budget of Ukraine for 2019.

The first offer of UAC concerns the program of cheaper loans. Thus, it is proposed to increase the amount of allocated funds from UAH 127 million, at least, to UAH 727 million, and limit the amount of compensation for the interest rate on loans of UAH 10 million in one hands, including related persons.

"We propose to significantly increase financing of the program of cheapening loans. Leave only one limitation according to which the amount of compensation for one company should not exceed UAH 10 million. All other restrictions that make this program ineffective must be canceled. In this case, assistance will be provided to small and medium-sized farms. Of course, large farms will also be able to get this amount, but for them it will not be of interest, because it will not be enough", - commented on this proposal Sokolov.

Secondly, farmers are proposing to return the program of so-called "quasi-accumulation of VAT", which was introduced in 2017, and completely canceled this year. Its advantage was the automatic and transparent distribution of funds among agricultural producers, without the intervention of officials. However, guided by political motives, the profile ministry, instead of fixing the flaws in the work of this program, which were discovered in 2017, completely stopped its financing. That's why farmers demand in 2019 to increase it to UAH 2 billion and to pay these funds in proportion to the proceeds.

Thirdly, the UAC proposes to amend the existing program of partial compensation of the cost of agricultural machinery of domestic production, which by the end of August was selected by only 21% (from the allocated UAH 945 billion farmers received a total of UAH 196 million). At the same time, despite the fact that this program has been ineffective for two years, the government plans in 2019 to increase its financing to UAH 1.382 billion.

Thus, in order to increase the efficiency of the program of compensation of the cost of purchased Ukrainian machinery, the proposals of the UAC are as follows:

• to expand the list of domestic equipment and equipment, which purchases are compensated by the state, including for equipment for reclamation and grain carriages;

• compensation for purchasing grain carriages should be received by all legal entities, including cooperatives that bring together agricultural producers, but are not themselves agricultural producers;

• reduce the degree of localization of tractors and other self-propelled agricultural energy sources of agricultural purpose of domestic production to 20%.

And fourthly, in order for the program of support of the farms, to which UAH 1 billion has been allocated in 2018, has become effective, it is necessary to pay the subsidies in proportion to the legal proceeds from the sale of agricultural products, as well as to support all small agricultural producers in which in the processing there are less than 500 hectares of land, regardless of the form of ownership.

"Let's make financial support for small agricultural producers fair. That all small farms processing less than 500 hectares, and not just those registered as "farms", participated in it, said Sokolov, adding that the current version of this norm is discriminatory.

In order to increase spending on the above programs, it was proposed to reduce program expenditures, which were either not performed at all, or by which funds are used mainly by large holdings.

In particular, we are talking about directions:

• сompensation of loans rates for the development of sheep breeding, goat breeding, beekeeping, animal husbandry, rabbit meat, silkworm and aquaculture (UAH 200 million were allocated, as of the end of August, UAH 199.7 million remained unused);

• a subsidy for the keeping of young animals of cattle to individuals (UAH 700 million were allocated, the balance is UAH 693.2 million);

• reimbursement of expenses for construction and reconstruction of livestock complexes, financed by loans (UAH 1,100 million was allocated, the balance is UAH - 1 098 million);

• reimbursement of expenses for the construction of livestock complexes (UAH 1,200 million was allocated, the balance is UAH 980 million).

The figures given are from the official report of the profile ministry as of August 20, 2018. Unfortunately, Minagroprod does not give even more fresh figures even to the requests of people's deputies. Similarly, the Office does not disclose who has already received the indicated funds, or plans to receive them in the current year. And instead of listening to market participants and working on mistakes, the ministry is proposing to even increase financing of programs that have proved completely ineffective in 2018.

The presented suggestions for improving the proposed mechanism of state support to the agrarian sector were formulated and sent to the heads of parliamentary factions, agrarian and budget committees. However, the working group at the budget committee decided that the relevant work should be rejected, leaving everything as it is.

At the same time, according to OECD comparative analysis of the share of state support in the volume of sales of agrarian products in the EU and Ukraine, if in Europe this indicator at the end of 2017 was 18.3%, then in Ukraine it was negative.

"The OECD takes into account both what the state is giving and what takes away, for example, through logistics. In Ukraine, this figure is negative and represents a minus of 7.1%. That is, the state gives us less than takes away. If the government implements the mechanism of state support to the agrarian sector in 2019, taking into account our amendments, this figure will be reduced even more and will be more than 10% below zero", - summed up Sokolov.

Recall that the Ukrainian Agricultural Council challenges the ineffective mechanism for distributing state support to the agrarian sector in court. The District Administrative Court of Kyiv has accepted the suit for consideration and appointed the date of the previous meeting on November 6, 2018.