With the start of field work in Ukraine, farmers are facing a number of challenges that need to be solved at the state level. The key issues include reservation of workers, land demining and the tax burden due to increased excise taxes on fuel. Denys Marchuk, Deputy Chairman of the Ukrainian Agri Council (UAC), spoke about these problems and the steps to be taken.

The Ukrainian agricultural sector is experiencing an acute shortage of staff, in particular due to difficult conditions for reserving workers. It is difficult for small farms that cultivate up to 500 hectares to meet the established criteria.

“The number one issue is reserving of employees. The criteria are defined, but they are such that many particularly small farms are not able to fulfil them. There is a catastrophic shortage of people. The UAC is analyzing how many people are currently reserved and how many businesses need. This issue needs to be raised at the highest government level for a possible additional criterion for reservation that will help relieve this burden” said Denys Marchuk.

Another critical issue is the tax burden on farmers due to increased excise taxes on fuel. In September 2024, a law was adopted that provided for the development of a separate mechanism to reduce the excise duty for the agricultural sector. However, the relevant draft law has not yet been submitted.

“In 2025, the excise tax has increased from 139 to 215 EUR per 1,000 litres, which will entail additional costs for the agricultural business of more than 5.5 billion UAH. Given the further increase to 330 EUR by 2028, this will make Ukrainian products uncompetitive. It is important to work out solutions today that will reduce the excise tax burden on farmers after the war is over” said the Deputy Chairman of the UAC.

According to Denys Marchuk, the Parliamentary Committee on Taxation and Customs Policy has already set up a working group consisting of the Ukrainian Agri Council, other specialized associations and government representatives. Its task is to prepare a mechanism that will help reduce excise duties on fuel for agricultural producers.

Another serious problem is the demining of agricultural land. Due to the hostilities, large areas remain unusable, which threatens the country's food security and the economic viability of the agricultural sector.

“For 2025, additional funding of one billion hryvnias is provided to help farmers who have problems with mined fields. Those who apply will be provided with 100% coverage of demining costs. However, there is no massive process yet - only one 500-hectare site in Kyiv region has been cleared under the program so far. We hope that the scope of work will increase significantly in the coming years” said Denys Marchuk.

Thus, Ukrainian farmers continue to work in difficult conditions. Staffing problems, an increasing tax burden and the need for rapid mine clearance require government solutions. Specialized associations together with the government are already working to solve these issues, but for their effective implementation it is necessary to speed up the adoption of relevant legislative changes.

Monday, 3 February 2025

 

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