UAC Deputy Chairman Denys Marchuk analyzed for the publication "Comments" emplacement of a new Minister of Agrarian Policy and Food of Ukraine and the VAT rate reducing on certain types of agricultural products

"Yesterday's plenary day was really productive for the agricultural sector. After a break of a year and a half, we finally have a new Minister of Agrarian Policy and Food of Ukraine, the head of the State Geocadastre Roman Leshchenko.

This time showed that the reorganization of the Ministry of Agriculture and the reduction of its role only to a department, even in a large ministry - was the wrong way. I think at that time the authorities did not understand at what the entire agricultural sector was and how much it gave to the country. Agriculture sector give about 40% of foreign exchange earnings from agricultural exports. We are a world leader in the export of sunflower oil, barley, rapeseed and rye. Every fifth Ukrainian works in the agriculture sector. How could such a powerful industry be left without a relevant ministry?

At the same time, the revival of the Ministry of Agriculture and the appointment of a profile minister show that the authorities understood their mistake and heard the farmers. Now the ministry and the minister personally face many challenges and tasks.

The first, of course, is the successful land reform implementation. It is necessary to adopt a number of important bills that will regulate land relations in the country. This is, in particular, the accomplishment of land decentralization through the adoption of the bill №2194, which transfers agricultural lands of state ownership, which are outside the settlements to the communities’ ownership.

Legalization of all parts of agriculture sector is a challenge that the new minister will also have to accept. Everyone who cultivates the land and makes a profit from it must pay taxes. This problem is solved by the bill №3131-d, which introduces a tax per 1 hectare. We hope that the new Minister will support these legislative initiatives at his level and assist in their adoption.

In addition, the issue of climate change in Ukraine needs an immediate response, as the southern regions are suffering from drought. It is necessary to revive and develop the irrigation system, which is in a catastrophic condition. It is also important to develop agricultural insurance in this direction, especially - insurance of income of agricultural producers. And, of course, farmers expect from the Minister of Development new markets for agricultural products.

Also yesterday, the extremely important for the agricultural sector bill №3656 was adopted (it reduces the VAT rate on certain types of agricultural products from 20% to 14%). This bill is important primarily because it contributes to the legalization of all parts of agriculture sector. Today in Ukraine, from 12 to 15 million hectares of land are illegally cultivated (about 40%of the total amount). A significant part of the harvest is exported through so-called "twists" - manipulations, because of which VAT is returned to the exporter from the state budget, which was not actually paid. Reducing the VAT rate will dramatically reduce the efficiency and commercial attractiveness of such fraudulent schemes.

And this bill will help to reduce costs, increase working farmers’ capital, which is especially important during the sowing period, when farmers have to borrow money from banks for seeds, fuel and other things.

At the same time, the state does not lose anything, because VAT rate reduction applies to intermediate agricultural products - whole milk, cattle, pigs, sheep, wheat, rye, barley, oats, corn, soybeans, flax seeds, sagebrush and rapeseed, sunflower and other oilseeds, sugar beets. The rate for finished products that we buy in the store remains the same - 20%.