No Bankruptcies for Collective Farms to 2004

No bankruptcy proceedings against agricultural commodity- producing enterprises are to be instituted from August 31, 1999 until January 1, 2004 according to the final clause of the law On Making Amendments to the Law of Ukraine On Bankruptcy which took effect on Tuesday, Interfax- Ukraine reports. The proposal to declare a moratorium on the bankruptcy of agricultural producers was mooted by People's Deputy Oleksandr Moroz during the second reading of the law. The law was passed by Verkhovna Rada on June 30, only to be signed by the President in mid-August. Informed sources report there was rather a high probability of the law being rejected inter alia due to the provision declaring a moratorium on the bankruptcy of agricultural producers.

According to deputy chief of the Ukrainian President's administration Pavlo Haidutsky, the President agreed to this exception, proceeding from how farming is carried on in real life. «If the law On Bankruptcy imposed the classic pattern of bankruptcy on farming enterprises, it would not in fact work,» the deputy presidential administration chief thinks, «90% of agricultural producers are statistically loss-making, but no one wants to declare them bankrupt.» Mr. Haidutsky is convinced that «Forcing the bankruptcy (of farming enterprises) today a very objectionable thing, as far as the social sphere is concerned... From an economic standpoint, bankruptcy can help revive the economy only when bankrupts account for 3%, but not 90%.» In his words, «this quota will be of no fundamental importance to the agricultural producer over three to five years.» Mr. Haidutsky believes that the farmer, the real private owner in the countryside, is responsible for his debts to specific suppliers of seed, fuel, lubricants, and fertilizers «according to the laws of the market.»