Monday, 17 October 2016

Latest Ukraine agri-business news

Ukraine's President Petro Poroshenko has signed a financing agreement with the European Investment Bank (EIB) on issuing EUR400 million of loans for agriculture projects, specifically grains and oilseeds, fisheries and aquaculture.

The EIB loans can account for up to 50% with the other part coming from banks participating in the lending program which might be a problem as Ukraine banks are not all that keen on lending money particularly to smallholders.

USAID has agreed a new technical assistance project worth more than USD20 million to support small-scale farming in Ukraine.  The new four-year project is aimed at increasing the competitiveness of Ukraine's small and medium-sized farms by supporting reforms in the agricultural sector aimed at improving the business environment and attracting investment.

Not entirely sure what that all means but they do go on to say that, as a part of the initiative, Ukrainian vegetable, fruit, milk and meat producers will receive technical assistance on international standards of quality and safety and entering export markets.

The European Commission has adopted a proposal to give Ukrainian producers access to the EU market for a range of agricultural products by temporarily raising tariff quotas for three years.  This is on top of the preferential tariff-rate quotas already in place.

Ukraine’s Ministry of Agricultural estimate an additional EUR200 million of agricultural products could be shipped to the EU markets as a result and I see no reason why preferential treatment by the EU towards Ukraine will not continue as the EU looks to support Ukraine economically and politically.

Given that the EU account for 80% of UK wheat exports and 63% of barley exports this potentially leaves UK farmers in a very tenuous position depending on how hard Brexit negotiations turn.