In order to establish a full-fledged export of grain, we need not only the unblocking of sea ports, but also the comprehensive support of the state for the activities of the agricultural sector. On August 12, the deputy head of the UAC, Denys Marchuk, said this during the forum "AgroBuild: how to start grain export".

One of the factors that slows down the activity of agricultural enterprises nowadays is the imperfection of tax legislation.

"In order to develop exports, the state needs to provide an incentive for business operation. Instead, we see the bureaucratic problems that arise in wartime. The tax invoices blocking became a burden for farmers. Nowadays, when it is necessary to develop exports, working capital in the accounts of farmers is frozen under the slogan of fighting against illegal business. In fact, agricultural producers who work legally suffer more from such state’s actions,” said Denys Marchuk.

Discrimination of grain cargoes by Ukrzaliznytsia, provision of better conditions for the metallurgical industry, makes it impractical to export grain by railways.

"We are constantly talking about the development of alternative logistic export routes. In June, 2.2 million tons were exported, in July the amount increased to 3 million tons of grain and oil products due to river ports, but the growth of railway transportation was only 7%. Why? Because for the state, grains take a back seat when it comes to ore exports. The metallurgical industry nowadays accounts for 65% of cargo transportation. Moreover, the export of grain by railways has additional financial burdens. Let me remind you that since June 29, the cost of railway transportation has increased by 70%. The increase in tariffs was predicted a long time ago, but rates raising is discriminatory in relation to cargoes with agricultural products: we have a difference of 15-17% between grain and cargoes of other industries. Tariffs need to be equalized. Farmers pay more nowadays and logistics costs are included in the cost price. As a result, if a ton of grain costs UAH3,000, and it costs UAH3,000 to transport it, then there is no point in transporting it, because it is not a business," emphasizes the UAC Deputy Chairman.

Preferential lending is needed for harvesting and autumn sowing campaign, since farmers do not have working capital due to problems with the sale of products.

"Farmers were helped with the financing of spring sowing, however, when the state’s preferential lending stopped on May 31, it became clear that no one had thought about harvesting campaign. Since there were almost no exports as of May 31, Ukraine shipped only 1 million tons of agricultural products then, some farmers had working capital. It is necessary to prolong preferential lending until November in order to support harvesting campaign and autumn sowing one, and to increase its volume from UAH60 million to UAH120 million per enterprise, taking into account the situation on the currency markets," added Denys Marchuk.

According to him, nowadays farmers do not set the goal of making profits, but the preservation of business, and there is a risk that 30-50% of agribusinesses may not survive to victory.

Friday, 12 August 2022

 

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