Every 11th ton of grain in the world market comes from Ukraine

In the next two years, the government will support almost all branches of agriculture. Such a promising statement came from the Minister of Agricultural Policy and Food Mykola Prysiazhniuk. He said that such support would be a part of the National Economic Development Intensification Program for 2013-14.

Different levels of government are now paying meticulous attention to agriculture. President of Ukraine Viktor Yanukovych highlighted the sector as a priority for the country’s economic development policy recently, during the International Agroindustrial Exhibition AGRO-2013. Grounds for optimism abound, indeed. “We saw an unprecedented growth in agricultural exports in 2012, as they climbed by almost 40 percent, while the share of agriculture and allied industries in Ukraine’s GDP has reached 11 percent. International experts state that Ukraine is one of just five countries that currently have the capacity for a decisive breakthrough in the sector’s development,” Prysiazhniuk says. Moreover, Ukraine has firmly consolidated its leading position in the world’s cereal production. Thus, in 2012, every 11th ton of grain sold on the world market came from our fields, with the share of Ukrainian grain in world grain trade reaching 9.2 percent. The minister thinks that the current rising global demand for food makes maintaining and strengthening this trend especially important.

According to the official, the National Economic Development Intensification Program for 2013-14 aims to build on all these positive developments. Thus, the document provides for a set of measures aimed at improving leasing programs, introducing innovative technologies in crop production, creating raw materials sourcing areas for the production of baby food, constructing and rehabilitating livestock farms, increasing exports, producing ethanol fuel and implementing financial and commodity interventions by the Agrarian Fund. But most importantly, the government promises to stimulate the development of farmers’ cooperatives and household production. “We project that these measures will bring about the gross agricultural output’s increase to 260 billion hryvnias, with agricultural exports reaching 22 billion dollars a year. This will increase the consolidated budget revenues by 48 billion hryvnias,” Prysiazhniuk states.

Well, the ministry’s plans look interesting. However, their implementation depends on who will sell the Ukrainian agricultural products as well as how it will be done and where they will go. In this context, the reformed Agrarian Fund’s role both in the domestic market and, possibly, in the external markets, too, is of interest (the fund has been turned into a public limited company). The Day asked the minister of agriculture about it. “The Agrarian Fund is still tasked with intervening on the domestic market to minimize volatility or maintain stable prices for agricultural products,” he answers. Moreover, he says, the fund’s responsibilities will expand. “With world grain prices growing, there is volatility in flour and groats markets. We are almost done with transferring to the Agrarian Fund silos with flour mill capacity, so it will be responsible for intervention on these markets, too,” the minister says. To our remark that such a reform could end with the fund’s assets’ privatization, Prysiazhniuk responds with a conclusion: “The current policy of the president and prime minister (and I am in complete agreement with them) is that the government shall do its job regarding food security, while the market will adjust the prices and volumes needed for it on its own. Therefore, the Agrarian Fund will not be privatized.” He adds that the Agrarian Fund will not receive the export license. “Today, fortunately, we have no problems with the international grain markets, as the supply is lacking, while consumer demand is overwhelming,” he explains the reason for it.

Who will be the buyer of the Ukrainian produce? According to the minister, the Asian vector, including China, Japan, and South Korea, is of particular interest for Ukraine. Cooperation with China is especially active. Prysiazhniuk reports that two million tons of corn will be sold to that country by the end of 2013. “We plan to complete negotiations with China on obtaining the phytosanitary permit for wheat exports in three months, and get various kinds of meat certified by January 1, 2014,” he says about Ukraine’s export plans to The Day.