In 2022, Ukrainian agricultural producers attracted 26,620 loans totaling UAH 47.74 million under the Affordable Loans 5–7–9 program, the website of the Ministry of Agrarian Policy and Food reported on Thursday.
The report clarifies that from mid-March to May 31, 2022, a special program was in place for preferential lending for sowing crops, under which farmers could raise up to UAH 60 million at 0% per annum, and 80% was guaranteed by the state. In total, during the period of its work, agricultural entrepreneurs received UAH 38.51 billion in loans. Since June 1, applications for lending to the agricultural sector have been accepted within the framework of the usual 5-7-9 program.
With its help, small and medium-sized agricultural entrepreneurs receive loans for the purchase of fixed assets and reimbursement of any expenses associated with the implementation of agricultural activities. The program is also aimed at creating jobs in enterprises.
In total, for the period June 1-July 21, Ukrainian banks allocated UAH 9.19 billion to 8.53 thousand agrarians and farmers, including UAH 443.8 thousand under the portfolio guarantee program.
The leaders in terms of lending for this period were Kyiv – UAH 1.540 billion, Khmelnytsky – UAH 1 billion, Kirovohrad – UAH 0.66 billion, Vinnitsa and Poltava – UAH 0.61 billion each.
The largest lending volumes for the specified period came from: Raiffeisen Bank – UAH 3.29 billion, Oschadbank – UAH 1.71 billion, PrivatBank – UAH 1.18 billion, Ukrgasbank – UAH 0.91 billion, Ukreximbank – UAH 0.61 billion.
“The government and the Ministry of Agrarian Policy are well aware of how important it is for farmers to receive preferential loans during the war. Therefore, we are working on launching new credit lines for farmers, and we also expect that in the near future the conditions for paying the body of the loan on preferential lending will be extended from 6 to 12 months,” the ministry quotes its first deputy minister, Taras Vysotsky.
Ukrainian banking institutions from the middle of March to May 25, under the government program to support the sowing season 2022, provided loans to farmers for a total of UAH 31.5 billion, including loans and portfolio guarantees for UAH 3.4 billion.
According to the data published on the website of the Ministry of Agrarian Policy and Food of Ukraine, 80% (UAH 20.3 billion) of loans provided were portfolio guarantees, while a total of 13,060 agricultural producers received access to financing (last week it was 1,740).
Most loans for the sowing season were attracted by farmers of Kirovohrad (UAH 4.91 billion), Kyiv (UAH 3.37 billion), Vinnytsia (UAH 2.92 billion), Dnipropetrovsk (UAH 2.52 billion) and Odesa regions (UAH 2.48 billion).
According to the Ministry of Agrarian Policy, loans up to UAH 60 million as part of the support for the 2022 sowing season are issued at 0% per annum (under the government financial support program Affordable Loans 5-7-9%). The term of such lending is up to six months, and after its completion, the interest rate for borrowers will be 5% per annum. Such financing can be used by farmers who fall under the definition of an agricultural producer.
Prime Minister Denys Shmygal asks Denmark to consider the possibility of supplying Ukraine with raw materials needed for farmers and oil products.
“I thanked for the decision to take part in the restoration of the city of Nikolaev together with other international partners. Also, in the coming days, as Prime Minister Matte Frederiksen promised, Ukraine will receive equipment and machinery that will help in the restoration of the liberated cities,” Shmyhal wrote on the Telegram channel following a meeting with Danish Foreign Minister Jeppe Kofodom.
According to him, the parties discussed the supply of military equipment, the tightening of sanctions against Russia and the rejection of Russian energy resources.
“I touched upon the issue of diversifying gas supply sources. I made a proposal to consider the possibility of supplying Ukraine with raw materials needed for farmers and oil products, since the enemy is purposefully trying to disrupt the sowing season and cause a shortage of fuel,” the prime minister wrote.
Among other things, Shmygal thanked Denmark for its strong political and financial support.
“We also count on Ukraine’s support in acquiring the status of a candidate for EU membership and on the approval decision of the European Commission to suspend import duties on all Ukrainian exports for a year,” he added.
For the period from mid-March to April 13, Ukrainian banking institutions provided loans to farmers under the state program to support the sowing campaign-2022 for a total of UAH 5.43 billion, including loans and portfolio guarantees for the week of March 6-13. UAH 3.64 billion
The relevant data on the financing of the sowing campaign in the context of the Russian military invasion of Ukraine was published on the website of the Ministry of Agrarian Policy and Food of Ukraine on Thursday.
“In fact, over a week, loans were issued for more than UAH 3.6 billion for more than a thousand farmers. Banks took a rather fast pace to cover the needs of our agricultural producers, who are now undergoing a sowing campaign. Today, agricultural loans can be issued by 22 Bank, and the goal of the state is to increase lending to the agricultural sector up to UAH 40 billion, that is, almost eight times more,” the department quotes its head, Mykola Solsky.
It is specified that 80% (UAH 4.41 billion) of the provided borrowed funds were portfolio guarantees, while 2.08 thousand agricultural producers received access to financing in total (1.18 thousand in the last week).
Most of the loans for the sowing campaign were attracted by the agrarians of Kirovohrad region – UAH 1.81 billion (+UAH 1.4 billion for the week), Vinnitsa region – UAH 944 million (+UAH 579 million), Dnepropetrovsk region – UAH 738 million (+UAH 471 million), Odesa – UAH 549 million (+UAH 388 million) and Lviv – UAH 348 million (+UAH 189 million) regions.
According to the Ministry of Agrarian Policy, loans up to UAH 60 million under this program are issued at 0% per annum (under the state financial support program “Affordable loans 5-7-9%”). The term of such lending is up to six months, and after its completion, the interest rate for borrowers will be 5% per annum. Agrarians falling under the definition of an agricultural producer can use the loan.
“Ukraine understands its defining role as a guarantor of the food security of the world, so we must harvest to feed ourselves, and also prevent food shortages and hunger in the world,” Solsky summed up in the message of the Ministry of Agrarian Policy.
The agency recalled that the government program to support the sowing campaign is being implemented by the Cabinet of Ministers, the Ministry of Agrarian Policy, the Ministry of Finance, the Ministry of Economy, the National Bank and the banking sector.
As reported, at the end of March, the Cabinet of Ministers of Ukraine expanded the procedure for issuing guarantees for agricultural producers on loans on a portfolio basis for the purchase of the resources they need for the sowing campaign in 2022, since due to the Russian military invasion of Ukraine, part of the farmers lost working capital for carrying out spring work.
Thus, within the framework of portfolio lending to agricultural producers, they will be able to obtain loans for the purchase of fertilizers, plant protection products, pesticides and agrochemicals, fuel, spare parts for agricultural equipment, as well as for replenishment of fixed assets and intangible assets, wages, rent of real estate and movable property, works and services for its operations.
The total budget of this program to support the 2022 sowing season is UAH 50 billion.
Ukrainian banking institutions for the period from mid-March to April 5 issued loans to farmers as part of the state program to support the sowing campaign in the context of the Russian military invasion of Ukraine for a total of UAH 1.79 billion, according to the website of the Ministry of Agrarian Policy and Food of Ukraine on Wednesday.
At the same time, it is specified that currently 80% (UAH 1.5 billion) of the provided borrowed funds were portfolio guarantees, and 900 agricultural producers from different regions of the country received access to financing.
Most of all loans for the specified period were attracted by farmers of Kirovohrad region – UAH 405 million (22% of the total), Vinnitsa region – UAH 365 million (20.4%), Dnepropetrovsk region – UAH 267 million (14.9%), Odessa region – UAH 161 million (9%) and Lviv – UAH 159 million (8%) regions.
According to the Ministry of Agrarian Policy, loans up to UAH 60 million under this program are issued at 0% per annum (under the state financial support program “Affordable loans 5-7-9%”). The term of such lending is up to 6 months, and after its completion, the interest rate for borrowers will be 5% per annum. Agrarians falling under the definition of an agricultural producer can use the loan.
“Lending to farmers is one of the main priorities of banks. The conditions for granting loans are simplified as much as possible. Moreover, banks lend to our farmers even in those regions where there are battles, because they need to sow, and (…) people go out to their fields,” the ministry quotes its head of Nikolai Solsky.
The agency clarified that the government program to support the sowing campaign is being implemented by the Cabinet of Ministers, the Ministry of Agrarian Policy, the Ministry of Finance, the Ministry of Economy, the National Bank and the banking sector.
As reported, at the end of March, the Cabinet of Ministers of Ukraine expanded the procedure for issuing guarantees for agricultural producers on loans on a portfolio basis for the purchase of the resources they need for the sowing campaign in 2022, since due to the Russian military invasion of Ukraine, part of the farmers lost working capital for carrying out spring work.
Thus, within the framework of portfolio lending to agricultural producers, they will be able to obtain loans for the purchase of fertilizers, plant protection products, pesticides and agrochemicals, fuel, spare parts for agricultural equipment, as well as for replenishment of fixed assets and intangible assets, wages, rent of real estate and movable property, works and services for its operations.
The total budget of this program to support the 2022 sowing season is UAH 50 billion.
American farmers plan to significantly increase sunflower crops this year due to supply disruptions amid Russia’s military invasion of Ukraine, Bloomberg writes.
At the same time, a jump in agricultural prices to record levels for many years could increase motivation among farmers to plant more, said John Sandbakken, executive director of the National Sunflower Association. The USDA tentatively forecasts a 10% increase in sunflower acreage this year.
“I’m sure the increase will be more, almost 20%,” Sandbakken said in a telephone interview with Bloomberg.
Sunflower is used in a very wide range of products, from potato chips and sunflower oil for frying to bird food and shampoos. However, this year this commodity may be in short supply, as Ukrainian farmers are forced to reduce acreage and exports due to hostilities in the country. Ukraine is considered one of the world’s largest sunflower exporters.
Meanwhile, last year’s devastating drought in the northern Great Plains of the United States plays into the hands of American farmers this year, as it left excess nitrogen in the ground, which reduces fertilizer costs, Bloomberg notes.
The price of new crop sunflower in the US is about $34 per 100 pounds (about 45 kg), higher than the previous record price of $30.5 reached in 2008. Old crop sunflower prices are also nearing their highest since 2011, Sandbakken notes.
