On Friday, March 3, press center of the Interfax-Ukraine hosted a press conference on the topic "Sowing campaign 2023 in danger of failure", in which agricultural producers and representatives of leading agricultural associations took part.
In Ukraine, on the eve of spring sowing, a situation has arisen that is more critical for the agricultural sector than at the beginning of the war. In 2022, when the war began, farmers used all their own resources, went out into the fields under mines and shelling to ensure the country's food security. Then the Affordable loan 5-7-9 program for producers saved the sowing season, which was used by about 44,000 agribusinesses.
Currently, farmers are faced with the fact that the program of preferential lending from the state has not been extended. Farmers do not have the funds to buy fuel, seeds, fertilizers, etc.
"If we look at the statistics, 53% of Ukraine’s total exports in 2022 were agricultural products, which made it possible to attract about 22 billion dollars and support the economy of the warring country. We managed to harvest more than 70 million tons, of which 50 million tons were grain. However, approaching the spring campaign, we can see that the cultivated areas will be reduced by at least 25% due to occupation and mining, and about 7 million hectares will not be used for growing agricultural crops. There is a risk that farmers, in the absence of funds for sowing, will not sow another 5 million hectares. These are catastrophic numbers. In conditions of undersowing, Ukraine will not supply the world with food and will not receive foreign currancy earnings. Even if there is affordable loan Ukraine will harvest no more than 35-36 million tons of grain. Without funds, this forecast should be further reduced."- said the Deputy Chairman of the Ukrainian Agri Council, Denys Marchuk.
If before the full-scale invasion, farmers managed to buy fertilizers, pesticides, fuel and seeds, after February 24, 2022, product supply chains were destroyed, ports were blocked, and exports were completely stopped. Currently, the situation has not significantly improved even after the "grain corridor" started working, the "solidarity routs" were established, and alternative routes for the export of Ukrainian grain were formed. This did not help the agricultural producer to fully realize their products and obtain enough financial resources.
"Agrarians have faced the fact that logistics "eats" 60-70% of the price of products, they had to sell products produced in the previous year at a loss. In the run-up to the 2022 sowing season, in 2.5 months, agrarians attracted UAH 38.5 billion in loans thanks to the Affordable loan 5-7-9% program. Today, those who used these loans have two big problems. The first is to carry out sowing, and the second is to repay these loans if the government does not extend the program. We understand that the state currently has no funds, that all financial resources are going to the army. But it is necessary to understand how important the agricultural sector is for the economy of Ukraine. Without exports, there will be no foreign exchange earnings, we will not be able to guarantee food security," said the director of the Ukrainian National Agrarian Forum Maria Didukh.
Without affordable loan for sowing, there is a risk that many producers of agricultural products will stop their economic activity.
The general director of the Rodyna 2007 farm Valery Martyshko explained:
"Without financial support, we will not grow crops and will simply die as producers. If last year the loan made it possible to keep the grain, it is more profitable to sell products and reach at least a "zero" profitability, now it is more difficult. This year, the loan funds will go entirely to ensure the sowing, because there are no other financial sources for its implementation. Next year will be even harder. For the past 12 years, my enterprise has been managed in such a way that it did not need to attract funds, but we will not survive the war without financial support."
Mykola Pyvovar, the head and founder of Andriivka farm, told about the situation in the de-occupied Kharkiv region :
"We have big problems with grain storage and logistics. Due to the limited operation of the grain agreement, Ukrainian farmers still have grain for the 2022 harvest, which could not be realized, and this is putting pressure on prices. In Kharkiv Oblast, many farmers have lost their businesses. The vast majority of farms were under occupation, then were de-occupied. Those who have the means to cultivate the land cannot work because all the fields are mined. We are grateful for the "5-7-9" program, which made it possible to work last year. This year, we ask that this program be extended, the financial threshold be raised, so that those enterprises that are unable to repay last year's loans can increase their funds and continue to work."
In 2022, the state made concessions and increased the possibilities of lending in the agricultural sector under the "5-7-9" program from UAH 60 million to UAH 90 million per legal entity. Today, due to inflation, this amount is not enough. In order to close the problematic issues of seeding, it is necessary to double the credit limit for a legal entity. These funds will not be used for enrichment, but for the preservation of the agricultural sector.
Agrarian associations appeal to the Prime Minister of Ukraine Denys Shmyhal and the Minister of Finance Serhiy Marchenko to save the agricultural sector, continue the program "Affordable loans 5-7-9" and rise the credit limits to 180 million UAH per farm.Friday, 3 March 2023