Corteva Agriscience, an international agricultural company operating on the Ukrainian market, has started using crop receipts to ensure financing of Ukrainian farmers in the conditions of the volatile market.
According to a press release from the company, crop receipts are available for the purchase of seeds and crop protection products of Corteva Agriscience in Ukraine. “Using this tool, farmers get the opportunity of increasing the credit limit for the purchase of Corteva Agriscience products and defer payment if necessary, and also protect themselves from the impact of changes in product prices,” the company said.
Corteva Agriscience said that issuing a crop receipt will take up to three days and will cost an average of 0.3% of the amount of the financial obligation under the receipt paid for the notary endorsement service.
A prerequisite for issuing a crop receipt is that the farmer owns or leases a sufficient number of officially registered farmland. The sown area for a crop receipt is determined by a special formula that takes into account the expected yield of the client for two years, the price of agricultural products and the amount of the obligation.
“Obligations of a producer on the crop receipt are guaranteed by a pledge – the future harvest of crops such as corn, sunflower and wheat. The amount of the obligation is determined by the formula agreed upon by the farmer and Corteva Agriscience, taking into account prices for agricultural products in a certain quantity and quality, but cannot be less than UAH 1.5 million, which is the minimum amount for using the crop receipt,” the company said.
Corteva Agriscience, the agricultural division of DowDuPont (the United States), a large global seed producer, occupied 21% of the Ukrainian corn seed market and 16% of the sunflower seed market (the seeds of the two brands – Pioneer and Brevant).
“According to the calculations of the Kleffmann Group, which are based on a survey of farmers in 2018, our market share of the combined portfolio of Corteva Agriscience [the seeds of two brands: Pioneer and Brevant] for corn is 21%, and for sunflower is 16%. The crop protection agents market’s share is 7% However, based on these data, one should take into account the error in the calculations, which can reach almost 3 percentage points,” Head of business in Eastern Europe Corteva Agriscience Serhiy Kharin said.
According to him, in the plans for the next season is to get at least 1% growth in the seed market share for each of the crops.
Corteva Agriscience is an integrated company with the following segments: seeds, crop protection agents and digital technologies. It was created by combining DuPont Pioneer, DuPont Crop Protection, and Dow AgroScience.
Corteva Agriscience includes Pioneer Nasinnia Ukraine LLC, a commercial office located in Kyiv (it provides sales of Pioneer brand seeds) and Stasi Nasinnia LLC, a seed production plant that has been operating since 2013. Over five years, investments in the production complex amounted to more than $56 million. The plant reached its full capacity in 2017: for the production of corn seeds – 500,000 seeds per year, for the production of sunflower seeds – 250,000 seeds per year.
Corteva Agriscience plans to become an independent company which shares will be quoted on an exchange after the previously announced separation process is completed by June 2019.
