The Cabinet helps peasants with... advice
Prime Minister Yulia Tymoshenko of Ukraine is calling on peasants not to hasten to sell grain because its prices may increase one and a half times in the fall of this year. The head of government gave this advice at the Cabinet’s away session in the village of Maiske, Dnipropetrovsk oblast, which was held there as part of the All-Ukrainian Field Day celebrations.
This year this farmer feast, traditionally organized by Agrosoiuz, one of Ukraine’s most successful corporations, passed almost “with tears in the eyes.” Although last year this country reaped a bumper crop and became the world’s third largest exporter of grain, this did not enrich the farmers themselves. The grain was, as usual, bought out by traders at low prices.
This year the situation is going to be the same with the only exception that the crop will be poorer and harvested in the conditions of a financial and economic crisis, when the banking system, as the premier admitted, works ineffectively. Food grain prices have dropped almost to the level of fodder grain. As a result, peasants are more and more increasingly worried that they will be unable to offset their expenses and carry out the fall sowing.
Following an hours-long conference with the farmers, the Cabinet passed about two dozen resolutions that are supposed to improve the situation in agriculture. First of all, the premier hopes that the state will purchase grain via the Agrarian Fund, which is expected to stabilize market prices. Tymoshenko promised to earmark three billion hryvnias for these purposes.
However, when she heard doubts from the farmers, she confessed that the stare treasury has just about one billion now on certain bank accounts. On the other hand, the premier firmly promised to “essentially simplify” the very procedure of getting all kinds of permissions and permits so that the Agrarian Fund can buy grain from peasants without any special problems.
In addition, the government is going to allow making these purchases from uncertified warehouses, which is especially important for grain producers. Tymoshenko also promised to use the Antimonopoly Committee to curb the appetites of the owners of privatized grain elevators, where grain storage prices are 30 to 40 percent higher than those set by the state.
She threatened to refund the VAT only to those exporters who will produce the proof of purchasing grain at the prices that are “at least as high as the minimal ones.” The farmers who were present at the Cabinet session were given many promises, such as, for example, putting 100,000 tons of diesel fuel on the market at a low price, cheaper credits by means of governmental compensations, and special subsidies from the Stabilization Fund to cattle raisers in order to increase the demand for feed grain.
In her turn, Tymoshenko asked peasants to hold back the grain. “The state will not be able to buy out all the country’s grain, nor are we not setting this goal. What we actually need to do is to maintain the price for two months. And then, with due account of the harvest expected in other countries, the grain price will be at least one and a half times higher than today,” the premier said.
Most of the farmers only shrugged shoulders in response, saying they have to repay credits and prepare for the fall sowing right now. It is very risky to wait until November, taking into account that the grain elevators are filled to the full with the last year’s grain. At the same time, almost none of the present farmers have ever dealt with the Agrarian Fund. Many are taking a dim view of this institution, considering that state purchases, especially on the eve of the presidential elections, will be made in the interests of the “right people.”
