The Cabinet of Ministers of Ukraine violated the norm of the Budget Code to pay agricultural producers 1% of agricultural GDP, reducing the amount of state support to the agrarian sector in 2019 to UAH 5.714 billion. For comparison, in 2018, the amount of state support to the agroindustrial complex was UAH 6.316 billion, and in 2017 – UAH 5.379 billion.

"From the outset, the Cabinet of Ministers approved ineffective state support programs for the agrarian sector that did not work, and the money used for them was almost non-existent. And now, on the pretext that the money remained unused in the budget, farmers reduced the total amount of state support. With the fact that when they abolished VAT special regimes, the Budget Code set the norm for payment to agricultural producers 1% of agricultural GDP ", - said Deputy Chairman of the UAC Mikhail Sokolov.

At the same time, in accordance with the approved State Budget for 2019, state support programs for the agrarian sector practically repeat these years of funding that have proved its inefficiency. Thus, according to the data of the Single Web Portal on the use of public funds, as of December 1, 2018, the provided programs were implemented only by 31%. From the formally allocated to farmers UAH 6.379 billion for 11 months, agricultural producers received only 1.951 billion UAH.

A detailed analysis of the implementation of budget programs is provided in the presentation at the link: https://app.box.com/s/r6r6c7hk14ebvy44bfxkqtpbq78kd2fm.

So, in the 2019 State Budget, financing of the following programs is foreseen:

• Financial support for measures in the agro-industrial complex by reducing the cost of loans - UAH 127 million (in 2018 - UAH 66 million, in 2017 - UAH 300 million);
• Financial support for measures in the agro-industrial complex - UAH 5 million (in 2018 - UAH 5 million, in 2017 - UAH 60 million);
• Financial support for farms - UAH 800 million (in 2018 - UAH 1 billion, in 2017 absent);
• State support for the development of hops, the laying of young gardens, vineyards and berries, and the supervision of them – UAH 400 million (in 2018 – UAH 300 million, in 2017 – UAH 75 million);
• State support for livestock industry - UAH 3.5 bln (in 2018 - UAH 4 bln, in 2017 - UAH 170 mln);

Also, in 2019, the government allocated UAH 881.8 million to compensate for the cost of purchased agricultural machinery of domestic production (in 2018 - UAH 945 million). Also next year, this program will include compensation for the cost of purchasing grain carriages, which will make sense only for large agricultural holdings, as small and medium-sized agricultural producers will not be able to afford the railway stock of 54 grain carriages.

At the same time, in 2019, as in 2018, the government did not envisage financing of the "quasi-accumulation of VAT" program, for which were allocated UAH 4.2 billion in 2017, and the return of which insisted small and medium-sized agricultural producers.

On November 5, UAC and other members of the Ukrainian Agri Forum appealed to the President of Ukraine Petro Poroshenko to encourage the abolition of inefficient state support to the agrarian sector, in which payments are made either in favor of large companies or remain unused in the budget. Despite the catastrophic results of the implementation of the state aid programs of the AIC in 2018, the government insists on the continuation of this negative practice in 2019 - next year the planned distribution of funds is similar to that which was in force this year. This testifies to the institutional incapacity of the Cabinet of Ministers and the Verkhovna Rada to distribute fairly and efficiently the budget funds. Therefore, farmers decided to give up such "assistance". Instead they proposed to send saved money to compensate for losses of budget revenues from the adoption of bills to reduce the VAT rate for some types of agricultural products to 10% (will help reduce retail prices for food) and the introduction of a capital tax (will lead to economic development, employment growth and wage levels).