09/2017
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16 U K R A I N E Agriculture Bulletin Additional UAH 224.3 million allocated for gardeners New State Land Cadaster uses blockchain technology 11.3 million tons of grain exported so far this year Ukraine reports record grain yield this year
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4)
Additional UAH 224.3 million allocated for gardeners .................................................................... 2 New State Land Cadaster uses blockchain technology ................................................................... 2 Latvia to support Ukrainian agricultural reform efforts .................................................................. 2 State Farming Development Program concept approved ............................................................... 2
Private Sector.............................................................................................................. 3 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16)
11.3 million tons of grain exported so far this year ........................................................................ 3 Investments in agricultural sector increased .................................................................................. 3 AgroTalks Day conference to be held in Kiev .................................................................................. 3 New EU trade preferences for Ukraine enter into force ................................................................. 4 Ukraine posts second-best harvest of early grain crops ................................................................. 4 Agriculture accounts for 16-17% of domestic production .............................................................. 4 Turkish company to construct milling facility in Ukraine ................................................................ 5 Singaporean company to build grain terminal in Ukraine .............................................................. 5 African Swine Flu outbreaks in Vinnytsia, Donetsk, Odesa ............................................................. 5 Ukraine may lose Egyptian grain market ......................................................................................... 5 Ukrainian-Austrian honey factory opens in Cherkasy ..................................................................... 6 Turkey cuts import taxes on agricultural goods .............................................................................. 6
Note: The Agriculture Bulletin presents a monthly roundup of headlines and news stories related to Ukraine’s agricultural sector. This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Eastern Europe, Central, South and South East Asia and North Africa. Read more »
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BFC Agriculture Bulletin
State Initiatives 1)
Additional UAH 224.3 million allocated for gardeners
October 5th, 2017, https://www.rbc.ua/rus/news/pravitelstvo-vydelilo-dopolnitelno-224-3-1507113810.html
The Cabinet of Ministers has allocated an additional UAH 224.3 million in state support for the development of hop-growing and the creation of young gardens, vineyards and berry fields. The state program for supporting these efforts previously was budgeted with UAH 75 million. The increase will allow the state to fully pay all accounts payable (UAH 231.8 million in total) under the ‘State Support for the Development of Hop Production and the Creation of Young Gardens, Vineyards and Berry Fields’ program. All remaining funds will be directed to the creation of new plantations and the development of industrial infrastructure.
2)
New State Land Cadaster uses blockchain technology
October 3rd, 2017, http://propozitsiya.com/derzhavnyy-zemelnyy-kadastr-pracyuvatyme-za-dopomogoyu-tehnologiyiblockchain
It has been announced that the updated State Land Cadaster will operate using blockchain technology. This will allow anyone to be able to track information related to more than 18.78 million Ukrainian land plots in real time. It will also protect the information in the cadaster and minimize opportunities for corruption. This is especially important for 7 million Ukrainian citizens and land owners. By the end of 2017, the Ministry of Agriculture will correct all mistakes within the registry. The move to a blockchain-based cadaster has also inspired the Ministry of Agriculture to further improve other registries in an effort to increase the efficiency and accuracy of the monitoring of all online operations.
3)
Latvia to support Ukrainian agricultural reform efforts
September 29th, 2017, https://www.rbc.ua/rus/news/latviya-podderzhit-reformirovanie-ukrainy-1506704944.html
Latvian Foreign Affairs Minister Edgar Rinkevics has met with his Ukrainian counterpart, Pavel Klimkin, to discuss Latvian assistance in Ukrainian reform efforts. Minister Rinkevics stated that Latvia is ready to assist Ukraine in the reform process, particularly in the field of agriculture. To this end, Latvia will help Ukraine implement the ‘Strengthening the Rural Sector Consultations System’ project. The Latvian side also reiterated its support of Ukraine’s territorial integrity and right to protect its sovereignty. In his turn, Minister Klimkin gave a positive assessment of cooperation between the countries and noted positive trends in economic development, including the growth of trade turnover for the first half of 2017.The two sides also came to agreements on positions prior to the next summit of the Eastern Partnership, which will be held in Brussels in November 2017.
4)
State Farming Development Program concept approved
September 13th, 2017, http://www.kmu.gov.ua/control/en/publish/article?art_id=250265479&cat_id=244314975
Ukraine’s Cabinet of Ministers has approved a concept for the ‘State Farming Development Program’ submitted by the Ministry of Agriculture. The program is aimed at promoting the activity of small- and medium-sized businesses rural areas as well as the creation of new jobs and the development of rural Page 2
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areas. The state believes that, if the efficiency of Ukrainian farms are raised, an additional 1.5 million tons of crops could be harvested per year. The program also holds that, following a three-year period, there will be a five-fold increase in the number of workplaces in rural areas, a 10% renewal of agricultural machinery annually and an increase in the area of lands used for organic crops as well as for livestock. Support tools within the program include cheaper loans, agricultural insurance and new farming subsidies.
Private Sector 5)
11.3 million tons of grain exported so far this year
October 4th, 2017, https://www.ukrinform.net/rubric-economy/2317740-ukraine-has-already-exported-113-mln-tons-of-grainsthis-year.html
Ukraine has exported 11.3 million tons of grain crops since the beginning of 2017-2018 marketing year. In particular, more than 6.48 million tons of wheat (including over 3.6 million tons of milling wheat and over 2.9 million tons of fodder wheat), almost 3.2 million tons of barley and more than 1.22 million tons of corn have been exported. Over 11.3 million tons of grains were exported during the same period last marketing year, including 7.2 million tons of wheat (over 3.7 million tons of milling wheat and 3.4 million tons of fodder wheat), more than 3.2 million tons of barley and almost 0.67 million tons of corn. Also, as of October 3, 2017, about 1.6 million tons of oilseeds had been exported, including over 1.45 million tons of rapeseed and more than 0.13 million tons of soybeans. More than 0.83 million tons of oilseeds were exported during the same period last year, including 0.62 million tons of rapeseed and more than 0.2 million tons of soybeans.
6)
Investments in agricultural sector increased
October 2nd, 2017, http://24tv.ua/ru/investicii_v_agroprodovolstvennoj_sektor_ukrainy_uvelichilis__institut_agrarnoj_jekonomiki_n871597
Investments made into the agricultural sector of Ukraine grew in the first half of 2017. According to the State Statistics Service of Ukraine, the total volume of capital investments in the agro-food sector of the economy in January-June 2017 was UAH 32.6 billion, 1.4 times higher than the same period in 2016. The overwhelming majority of these investments (75.7%) went to agriculture, hunting and the provision of related services. Capital investments in these sectors grew 1.5 times compared to the first half of last year and amounted to UAH 24.7 billion. Capital investments into the long-term biological assets of plant growing and livestock increased to UAH 1.66 billion, 1.2 times higher than last year. Capital investments in the production of food products increased by 12.2% to UAH 7.641 billion.
7)
AgroTalks Day conference to be held in Kiev
October 2nd, 2017, http://agroportal.ua/news/tekhnologii/agrariyam-rasskazhut-o-tekhnologicheskikh-startapakh-iinnovatsiyakh/
AgroTalks Day, a conference dedicated to technological innovations in the agricultural sector, will be held at UNIT.City in Kiev on October 10, 2017. The goal of the conference is the formation of a startup ecosystem and a professional community. This conference will be divided into three thematic sections:
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• • •
Start-ups and innovations — new developments and innovative solutions for agribusinesses, featuring two innovations: technology for producing water from the air and electrophysical and cryogenic technologies in agricultural products Farm management and forecasting technologies — maximizing profits from each hectare of land, soil conservation technology (agrochemical analyses and audits) and practical cases of using telemetry systems in agricultural production Drones — how drones solve specific tasks for agribusinesses
Organizers will also present the ‘Everything about Creating Web Projects: What Start-ups and Businesses Need to Know’ workshop.
8)
New EU trade preferences for Ukraine enter into force
September 29th, 2017, http://www.dw.com/uk/%D0%
Beginning on October 1, 2017 and lasting a period of three years, Ukraine will have duty-free exports of some additional agricultural and industrial goods to the European Union (EU). The new rules are expected to increase the volume of agricultural products Ukraine exports to the EU without paying customs duties; it will also accelerate the elimination of EU import tariffs for several industrial products. A joint statement, issued by European Commissioner for Trade Cecilia Malmstrom and Ukrainian Deputy Minister of Economic Development and Trade Natalia Mykolska, stated that the measure is an important sign of continued tangible economic and political support for the Ukrainian people, the state and its reforms.
9)
Ukraine posts second-best harvest of early grain crops
September 20th, 2017, https://en.lb.ua/news/2017/09/20/4536_ukraine_posts_second_best_harvest.html
This year’s harvest of early grain crops is the second-best in the history of independent Ukraine, trailing only behind last year’s harvest. This year, weather conditions were difficult and uneven across the country, meaning that some regions posted lower harvests than last year and other regions had recordhigh harvests. As of September 15, 2017, Ukraine has harvested 38.2 million tons of grain and leguminous crops from an area of 9.9 million hectares. In total, Ukraine is expected to harvest between 61 million and 63 million tons of grain this year.
10) Agriculture accounts for 16-17% of domestic production September 20th, 2017, https://www.ukrinform.net/rubric-economy/2308838-pm-groysman-agricultural-sector-provides-1617of-all-goods-produced-in-ukraine.html
At a recent Cabinet meeting, Prime Minister Volodymyr Groysman noted that the agricultural sector accounts for 16-17% of all domestically produced goods. The Prime Minister also reiterated the government’s support for the sector, stating that the draft state budget for 2018 contains “large-scale support" for farmers. He added that Ukraine's strategic stocks and food balance are at proper levels.
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11) Turkish company to construct milling facility in Ukraine September 13th, 2017, https://www.unian.info/economics/2132109-turkish-company-to-construct-a-modern-milling-facility-inukraine-media.html
Turkey’s Alapala Makina, an industrial unit of Alapala Group, is now in talks about supplying EUR 4.5 million for the construction of a large milling facility in Ukraine. The location of the future plant is still under discussion, although preliminary ideas seem to be giving heavy consideration to somewhere in the Kiev region. The new mill, once operational, would have a capacity of processing 150 metric tons per day. The project is being considered in partnership with PJSC Agrarian Fund. The Fund currently has no production facilities of its own; however, it has gained control of 12% of the domestic flour market and is now actively developing exports. About 900 mills operate in Ukraine, but only around 20 have the capacity of milling more than 100 metric tons of grain per day.
12) Singaporean company to build grain terminal in Ukraine September 13th, 2017, http://agroportal.ua/news/ukraina/singapurskaya-agrokorporatsiya-postroit-zernovoi-terminal-vukraine/
Transnational corporation Olam International Ltd. (Singapore) is planning to invest in the construction of a grain terminal at one of the ports of Ukraine. The exact details of the proposed investment project have yet to be disclosed; however, the company’s leadership plans on releasing more information soon. Founded in 1995, Olam International Ltd. conducts production and export-import activities and has offices in 65 countries. Olam Ukraine was founded in 2005 and is a supplier of cocoa beans and cocoa products for Ukrainian confectioners.
13) African Swine Flu outbreaks in Vinnytsia, Donetsk, Odesa September 12th, 2017, http://en.interfax.com.ua/news/economic/447934.html
Ukraine's Service for Food Safety and Consumer Protection has received data confirming outbreaks of African Swine Flu in the Vinnytsia, Donetsk and Odesa regions. The disease was found in biological samples taken from pigs found dead in a private household in Zaliznychne (Vinnytsia region), a private household in Hannivka (Donetsk region) and a private enterprise in Uspikh (Odesa region). Measures have been taken to localize the disease and prevent the spread of African Swine Flu pathogens.
14) Ukraine may lose Egyptian grain market September 12th, 2017, http://finchannel.com/world/ukraine/67741-ukraine-may-lose-the-egyptian-grain-market
Ukraine may lose its second largest export market for wheat. In the spring of 2017, Egypt established new rules for imports and increased the required protein content from 11.5% to 12.5% for grain imported from Ukraine and Russia. It is expected that this will result in Egypt purchasing lower volumes of wheat from Ukraine this year and could even result in Ukrainian wheat being completely excluded
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from the Egyptian market as there are currently no such large-scale batches of wheat with those new specifications. Some believe that the Egyptian decision was taken in order to increase the supply of Russian wheat in the country and that Ukrainian traders are unlikely to find a way to overcome this. Deputy Minister Maksym Martynyuk has stated that Ukraine will increase wheat exports to Asian countries in order to compensate for the possible decline of supplies sent to Egypt. It is worth noting that Ukraine has already established markets in many Asian countries. In fact, in the 2016-2017 agricultural season, Ukraine exported nearly 6.6 million tons of wheat to Bangladesh, Indonesia, the Philippines, South Korea and Thailand.
15) Ukrainian-Austrian honey factory opens in Cherkasy September 12th, 2017, https://www.ukrinform.net/rubric-economy/2303442-ukrainianaustrian-honey-factory-opened-incherkasy-region.html
The Ukrainian-Austrian Beehive honey factory has been opened in the village of Cherniavka (Cherkasy region). The factory is a joint Ukrainian-Austrian project that included an initial investment of EUR 10 million. A total of 115 staff will work at the high-tech production factory, which is capable of an annual output of 16,000 tons of finished products. It should be noted that Ukrainian honey exports have been growing steadily each year.
16) Turkey cuts import taxes on agricultural goods September 11th, 2017, http://zik.ua/en/news/2017/09/11/turkey_raises_quotas_cuts_import_taxes_on_ukrainian_agricultural_goods_1165669
Turkey has lowered the import tax on cattle by 26% and on the import of cattle hides by 40%. Turkey also reduced the import tax on some grades of grain and barley by 35-45%. Additionally, Turkey has cut the import tax on corn to 25% (down from 130%).
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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com Articles are taken directly from local sources without any fact-checking; they are provided as a convenience and for informational purposes only. Business & Finance Consulting (BFC)’s editing is limited to providing a short summary in English of the texts, highlighting the main points of the original articles. All rights reserved by the authors. BFC takes no responsibility and does not make any representation or warranty, express or implied, or assume any responsibility whatsoever for the content, accuracy, and reliability, or completeness of any of the articles.