Agricultural Committee Meeting

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Agenda:

On May 16, the Chamber Agricultural Committee held its regular meeting devoted to presentation of strategy of reforms for agriculture and land governance by the new World Bank Project; discussion of possible Governmental stimulus package for developing of commodity exchange market for grains; discussion of the options for deregulation of mechanisms of state control in plant quarantine area; discussion of the possible issues resulting from envisaged removal of warehouse documents out of the strict accounting documents list; discussion of the recent Draft Law intending to introduce 3% export duty for sunflower oil.

At the beginning of the meeting, Dr. Denys Nizalov, Assistant Professor, Kyiv School of Economics, delivered a presentation on the new World Bank Project "Capacity Development for Evidence-Based Land and Agricultural Policy-Making in Ukraine" which is intended to serve as a platform for development and discussion of a reform strategy for agriculture and land governance as well as provide an analytical support for development of specific reform parameters. It will also enhance capacity to monitor the implementation of reforms in agricultural sector and land governance. The major point of interest for Committee Members was the opportunity to submit the strategic priorities that would be then used for Governmental policies intended to improve efficiency of the agricultural sector. Agreement has been reached to circulate the current list of the Project’s priorities for consideration of the Committee in order to get the wider feedback from representatives of different industries containing their vision on how to remove constraints for high value added production and value chain development.

As the second agenda item, Members discussed the statement by the Minister of Agricultural Policy and Food of Ukraine (Minister) in which he suggested to establish a functioning commodity exchange market for cereals that would help to establish efficient pricing mechanism for national agricultural produces. Participants mentioned the fact that establishing a full-scale commodity exchange requires certain level of financial discipline among market participants as well as administrative mechanisms supporting it, which is currently not the case while suppliers often default on their obligations. Decision has been made to submit the official letter aimed at clarifying whether the Minister intends to establish fully-functional exchange system or he simply plans another version of “market contract registration” with which we had negative experience in the past.

The third item has been devoted to consideration of ways for deregulation of mechanisms of state control in plant quarantine area. According to the analytical materials developed by the International Finance Corporation, the major issues in this field include: large number of quarantine zones that force cargo owners to obtain certificates; lengthy list of products of plant origin subject to phytosanitary controls; time-consuming procedures for issuing phytosanitary certificates. Decision has been made to send the formal inquiry in regards to the specific list of the quarantine zones existing in Ukraine accompanied by the list of the official documents that provided official ground for their establishment. The reply of the Governmental authorities would be used to undertake the further steps as well as provide specific suggestions for amending the current regulatory acts in order to improve the procedures for issuing phytosanitary certificates.

Participants considered the envisaged removal of warehouse documents out of the strict accounting documents list by the Ministry of Agricultural Policy and Food of Ukraine and concluded that this step would simply trigger search for alternative legal mechanisms intended for protection of the investments by individual companies. At the same time Members mentioned that existence of the current state standards for grain (GOSTs) creates a number of issues for grain industry and there is also an understanding that this issue needs resolving within the Government of Ukraine. Participants agreed to delegate experts to the Working Group tasked to develop the specific amendments to the state standards in force and channel them to the relevant decision-makers afterwards.

Finally, participants discussed Draft Law #4858 “On Introduction of Export Duty for Sunflower Oil (Not Refined)”, which intends to introduce 3% export duty, which is currently being considered by the relevant Parliamentary Committees, and suggested going forward to lawmakers with suggestions to decline further consideration of the abovementioned Draft Law.

For more detailed information, please click here to view the Minutes.