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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

IS THE UKRAINIAN BUDGET BEING TORPEDOED BY U.S. TRACTORS Or our own mismanagement?

13 November, 2012 - 00:00

650 John Deere tractors bought on US credit are still idle, reports Interfax-Ukraine, referring to the Agribusiness Ministry. Why? Because agricultural enterprises cannot provide the required guarantees to the state Ukrahrotekhservis (Ukrainian Agricultural Equipment Service) which bought them.

Each Deere tractor costs $169,000 and is to be made available to farming entities at about Hr 500,000 payable by installments spread over five years (the cost includes interest).

Ukrainian farmers refusing to use US equipment would not probably constitute so important a subject if it were not for one particular circumstance: the US credit was received under a Cabinet’s guarantee and the first payments are to be made this October. In other words, almost $100 million will have to be returned from the state budget, thus tangibly impeding government plans to reach the IMF-required budget balance.

The logical question is, of course: How could a government-run business entity have purchased so many tractors without first making sure that the goods would have customers (let alone use budget – read taxpayers’ – money as collateral)? Still no answer, although, apart from our innate mismanagement, there could be political and economic reasons, rumored to result from the competition between the Ukrahrotekhservis and a group of Agrarian legislators.

COMMENTARY



People’s Deputy Viktor Suslov: “We can see that most loans received under Cabinet guarantees are not repaid, meaning tens and hundreds of millions of dollars. In a word, over 90% of such loans are still to be repaid, giving one cause to suspect evil intent.”



People’s Deputy Bohdan Hubsky: “The problem is that equipment purchased against government guarantees is not always paid for by enterprises using it. After harvesting grain such an enterprises is informed by the Cabinet that it must first supply grain to the national reserve. After it does, nothing is left. How can one pay for a combine harvester under such conditions?”

 

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