Business news from Ukraine

Development of agricultural sector by 2030: Ukraine’s key strategy for joining EU – Stefanyshyna

The agricultural sector is, without exaggeration, one of the key pillars on which the Ukrainian economy rests, with exports generating 62% of foreign exchange earnings in 2023 alone, said Olga Stefanishyna, Vice Prime Minister for European and Euro-Atlantic Integration of Ukraine.

“The Ukrainian agro-industrial complex has withstood difficult conditions and continues to operate, supporting the economy, ensuring food security not only in Ukraine, the world, but also in Africa, the Middle East, and Southeast Asia,” she said at the presentation of the Strategy for the Development of Agriculture and Rural Areas until 2030 in Kyiv on Friday.

She reminded that a significant part of Ukrainian agricultural products was exported to the European Union, with which Ukraine had a free trade area, in particular due to unprecedented measures taken by the EU, which introduced autonomous trade preferences at the beginning of the war and increased Ukraine’s logistics capabilities through the path of solidarity.

The Deputy Prime Minister emphasized that this decision of the EU was made possible thanks to the experience of implementing the Association Agreement, the development of the Ukrainian agricultural sector under the influence of the implementation of European legislation and the gradual adaptation to the norms of EU production standards since 2014.

“Today we are witnessing a new stage of integration of the Ukrainian agro-industrial complex (…) into the EU internal market. For the first time in its history, Ukraine is proposing not only a strategy for agricultural development, but also a strategy for Ukraine’s membership in the European Union, a strategy that envisages that Ukraine will become part of a large internal market – the most developed, dynamic and competitive one,” Stefanishyna emphasized.

The Deputy Prime Minister expressed confidence that the introduction and implementation of the approaches envisaged in the strategy for the development of the agro-industrial complex will not only lead to the achievement of European standards, but will also increase the productivity of the agricultural sector, promote export growth, create new jobs, stimulate the production of value-added goods, increase competitiveness, and ensure the sustainability and security of the increase in production in Ukraine.

Stefanyshyna added that the Strategy submitted for public consideration contains elements of the commitments under the Ukraine Facility program. The Strategy, in turn, provides for rather targeted but systematic measures to invest in and restore the Ukrainian agricultural sector and restore Ukraine’s economic well-being.

At the same time, the Deputy Prime Minister noted that Ukraine will have a lot of homework ahead of it, as agriculture is one of the most developed areas of regulation in the European Union.

“There are a lot of new obligations waiting for us here, which will lead us to the fact that our agricultural borders will not be limited to 40 million consumers, but will be 500 million consumers – on the one hand. On the other hand, during the negotiation process on membership, which will be led by Ukraine, there will also be an internal reform in the field of agricultural policy, agriculture in the European Union. It was actually launched against the backdrop of the consequences of Russian aggression and against the background of the EU being predictable, prudent and competitive in this area,” the Deputy Prime Minister for European Integration summarized.

She also thanked the Ministry of Agrarian Policy for its initiative to develop a strategy for the development of the agricultural sector until 2030, which will form the basis of Ukraine’s negotiating position.

Stefanyshyna also expressed confidence that Ukraine will already be a member of the EU by the end of the strategy.

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Total revenue of top 10 companies of Ukrainian agricultural sector in 2023 increased by 35%

The total revenue of the top 10 companies in the agricultural sector in 2023 increased by 35% compared to 2022, to UAH 86.57 billion, and almost 1.5 times compared to pre-war 2021, according to the Opendatabot website.

According to the Opendatabot index, the largest profits among all the businesses in the top ten were made by the enterprises of the MHP, Kernel, and Ukrprominvest agricultural holdings.

At the same time, four poultry companies accounted for 46% of the total income of the leaders.

Thus, the leader of the most profitable companies, Myronivska Poultry Farm, which is part of the MHP agricultural holding, earned UAH 21.23 billion, which accounted for 24.8% of the total income of the agricultural sector leaders. The result was 1.5 times higher than in 2022.

The Starynska Poultry Farm of the same agricultural group earned UAH 7.13 billion and took 8.2% of the total revenues of the top 10.

Dniprovsky Poultry Complex, owned by the same agricultural group (a new company in the index), increased its figure by one third to UAH 5.37 billion and became a newcomer to the Opendatabot index with a 6.2% share in the top ten. The holding is owned by Alexander and Yulia Ryazanov.

Zorya Podillya poultry complex of Ukrprominvest agricultural holding, whose beneficiary is the son of former President of Ukraine Oleksiy Poroshenko, accounted for UAH 5.3 billion (6.1%). The company returned to the ranking after a year-long break with a 1.5-fold increase in revenues.

At the same time, the total revenue of the three companies of the MHP agricultural holding, whose beneficiary is Yuriy Kosyuk, amounted to UAH 34.32 billion, which is 40% of the total revenue of the leaders in the agricultural sector.

After the top ten leader Myronivska Poultry Farm, Lebedynskyi Seed Plant, owned by Dmytro Kravchenko’s LNZ Group, ranks second. In 2023, the company increased its revenue by 17% to UAH 15.67 billion (18%).

Two companies of Kernel Agro Holding – Druzhba Nova LLC and Enselco Agro LLC – earned UAH 14.71 billion in 2023, up 27% year-on-year. Their share in the total income of the top 10 is 17%.

Ukrprominvest is also represented in the ranking by two companies – in addition to Zorya Podillya, it includes PK Podillya. In total, they earned UAH 11.35 billion, accounting for 13% of the total revenue of the top 10 agricultural companies.

Another newcomer to the Opendatabot 2024 index, having increased its earnings by a quarter, is Zakhidnyi Buh, whose beneficiaries are Oksana Drul, Valerii Ovcharuk, and Yurii Hladun.

World Bank allocates $550 mln to support Ukraine’s agricultural sector

The World Bank has announced the allocation of $550 million to help more than 90,000 farmers in Ukraine access concessional loans and grants for agricultural production.

The “Emergency Project of Inclusive Support for the Restoration of Agriculture in Ukraine (ARISE)” will facilitate access to concessional financing for agricultural producers in 2023 and 2024. The project will help farmers mobilize about $1.5 billion in working capital,” the WB said in a statement on Tuesday night.

It is specified that the financing of the ARISE project consists of a $230 million loan from the World Bank from the Trust Fund for Providing Ukraine with Necessary Credit Support (ADVANCE Ukraine), supported by the Government of Japan. The financing also includes a $320 million grant from the Ukraine Recovery, Rehabilitation and Transformation Trust Fund (URTF).

“The innovative design of the project envisages attracting additional financing of up to $150 million, when such funds are available from the World Bank and donors,” the release says.

“The ARISE project will help thousands of Ukrainian farmers, many of them small, continue to produce in what will undoubtedly be a very challenging environment in the coming months,” the statement quoted Antonella Bassani, World Bank Vice President for Europe and Central Asia, as saying.

The WB recalled that the total cost of damage to the Ukrainian agricultural sector from Russia’s invasion is estimated at $40.2 billion, and it has likely increased since the last Rapid Assessment of Damage and Recovery Needs was published in February 2023. This figure does not take into account the demining of farmland, damage to irrigation systems, losses to agro-logistics, and losses to food processing companies, the bank added.

The ARISE project will be implemented by the Entrepreneurship Development Fund and the Ministry of Agrarian Policy and Food of Ukraine. This is the fifth World Bank project approved for Ukraine this year under an innovative and flexible framework model. It provides for the rapid mobilization of partner resources to finance urgent needs, and such financing can be expanded as needed when additional funds become available.

Next year, the World Bank and the Government of Ukraine will focus on critical reforms and investments in priority sectors, including energy, health and social protection, education, housing rehabilitation, and agriculture, the release said.


Ukraine and Denmark sign memorandum of cooperation in agricultural sector

Minister of Agrarian Policy and Food Mykola Solsky and Minister of Agriculture and Fisheries of Denmark Jakob Jensen have signed a memorandum of understanding between the agriculture ministries of the two countries, the press service of the Ministry of Agrarian Policy reported.

“The signing of the memorandum is aimed at long-term strategic cooperation to improve the efficiency and sustainability of food production and agriculture,” the statement said.

According to the document, the parties will exchange information and experience in the field of green transition of agriculture and food systems, including joint policies and climate solutions; in the field of food safety and food security.

Ukraine and Denmark are also interested in the prospects of livestock development, including management, animal welfare, animal health, animal breeding, feed and organic farming.

Ukraine and Denmark will set up a joint working group to identify areas of cooperation.

Solsky thanked the Danish government for its support and assistance. According to him, Danish farmers have been successfully developing their business in Ukraine for the past 15 years. They are not deterred by the war in Ukraine.

“Denmark is one of the examples of agriculture in Europe and the world of how to be efficient and profitable. And an example of very high technology. We are interested in investments and in a greater presence of Danes in Ukrainian business. This is a good experience, an extremely high-quality approach, something we would like to learn from, something we want to follow,” the Ukrainian minister emphasized.

In turn, Jensen expressed confidence in the effectiveness of cooperation with Ukraine in the agricultural sector.

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Losses of Ukrainian agricultural sector from war reached $40.2 bln

During the war, direct and indirect losses of the agricultural sector reached $40.2 billion, but these are not the final figures, as Ukrainian territories are still under temporary occupation, so it is difficult to calculate the full extent of losses, said Oleksandr Haidu, chairman of the Verkhovna Rada Committee on Agrarian and Land Policy.

“Confirmed direct losses of the agricultural sector exceeded $8.7 billion. We are talking about the destruction of infrastructure, business facilities, logistics chains, destruction and theft of grain and agricultural machinery by the enemy. There are also indirect losses of at least $30.5 billion. Unfortunately, this is not the final figure. When we accurately calculate the damage caused by the enemy’s explosion of the Kakhovka hydroelectric power station, the amount will be much higher,” the MP said on Wednesday at the conference “18 Months of War. Damage to the agricultural sector and prospects for the industry’s recovery”.

According to him, it is difficult to assess the consequences of contamination of agricultural land with explosives, destruction of the upper layers of soil due to “arrivals” and explosions during demining.

“We see that a large area is mined. Potentially, 174 thousand square kilometers of Ukrainian land are contaminated with explosives. And this is without taking into account the temporarily occupied regions,” the MP noted and informed about the preparation of the draft law “On the Quality of Soils”.

Gaidu also emphasized that the state cannot cover the needs of the affected farmers on its own and promised to engage international partners to support the agricultural sector.

“I emphasized the expediency of differentiating programs for farmers. After all, the needs of farmers are very different. For example, those farms that operate in the de-occupied territories cannot attract investment because financial institutions are mostly unwilling to cooperate with them. Although they are the first to return to their places after the liberation of the region to resume their activities and fill local budgets,” he wrote on Facebook.

The chairman of the relevant parliamentary committee believes that one of the mechanisms for compensation for the damage could be “grain reparations,” a mechanism that would help farmers receive compensation for destroyed businesses.

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Map of destruction of agricultural sector of Ukraine has been created

On November 3, the All-Ukrainian Agrarian Rada (VAR) public organization, with the support of the US Agrarian and Rural Development Program (USAID), launched an interactive map of the destruction of the agricultural sector in Ukraine, created to demonstrate the real damage caused to the industry by Russian aggression.
As reported on the VAR website, the disclosure of such information can help Ukrainian agricultural producers record the war crimes of the Russians against the Ukrainian agro-industrial complex, which have inflicted over $6 billion in direct losses since the start of the full-scale aggression.
According to the organization, the interactive map posted on the resource will become a reliable source of data for the world community, potential investors and government authorities of Ukraine.
During the presentation, the head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Daniil Getmantsev, said that the resumption of Ukraine’s agricultural sector after its victory over the Russian Federation should bring it to a higher level, while it is important to record it in detail in order to compensate for the damage.
“We must understand how and how much to collect damages from the aggressor, have a clear legal mechanism that will be acceptable for conducting cases in international courts. So, we urgently need to record the destruction in order to collect the necessary evidence to recover funds from the aggressor after our victory” , – VAR quotes Getmantsev.
According to the organization, the interactive map is designed to document damage and crimes in the interests of the farmers themselves, since the information posted there will be seen by international organizations that make political decisions to support Ukraine. At the same time, it is important that private investment and charitable foundations have access to this information, which will be able to find potential enterprises on an interactive map for further targeted assistance in their restoration.
It is specified that the Vkurse Agro project became the technical developer of the map. The map is bilingual: information is presented in Ukrainian and English. The portal provides opportunities for searching and downloading data, photo materials of destruction for each farm, displays information about damaged land plots, land reclamation facilities, crops, etc. A simple algorithm has also been developed for adding new objects, it is possible to use feedback.