The state-introduced compensation of 50% of the cost of construction and restoration of livestock farms could be a powerful incentive for the recovery of agribusiness in frontline regions. However, without insurance and the fight against counterfeiting, its effectiveness will be limited.

This was stated on the air of “Yedyny Novyny” by the UAC Deputy Chairman Denys Marchuk:

"Frontline territories are particularly vulnerable: Russian shelling has destroyed many livestock farms. In the Kharkiv region, one of the members of the UAC suffered three strikes on one enterprise. Due to the high risks, farmers cannot attract investment, and lending in the “red zone” is almost non-existent. That is why state compensation has become a signal to producers that they can continue to work, retain their workforces, and bring income to their communities."

Despite the compensation, a number of factors continue to deter farmers from investing. First and foremost is the lack of state insurance guarantees.

“The state compensates 50%, but farmers are forced to cover the other half with loans because they do not have enough of their own funds. This 50% needs to be insured by the state — this would guarantee farmers protection and confidence in the development of their businesses,” said the Deputy Chairman of the UAC.

The problem of market access is no less acute. Part of the domestic demand is occupied by counterfeit dairy products, which are imported in circumvention of the law and without paying taxes.

"Counterfeiting narrows the opportunities for Ukrainian farmers to sell their own milk for processing. As a result, purchase prices continue to fall — they have already dropped by more than UAH 2.18. This is effectively the break-even point, and for smaller producers, it already means losses. Without cleansing the market of counterfeit products, the compensation program will not be able to fully realize its potential," explained Denys Marchuk.