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.
The state recommends that farmers sow crops with the maximum unit value, so that in the face of problems in the country with the export of agricultural products due to the military invasion of the terrorist country of the Russian Federation, they receive maximum revenue from the sale of relatively small batches of agricultural raw materials, according to the website of the department with reference to its head Nikolai Solsky.
At the same time, the Minister of Agrarian Policy and Food on the air of the “UA-marathon” on Monday advised agricultural producers to grow high-margin and relatively easy-to-logistics sunflower, rapeseed and soybeans. According to the agency, the biggest challenge for the Ukrainian agro-industrial complex remains the issue of exporting agricultural crops from the country.
“A significant limitation of export logistics opportunities directly affects how much grain farmers and agrarians can sell – respectively, how much money they need to get for wages, sowing, payments to tenants, and the like. This is the most difficult thing,” the minister said. According to Solsky, due to Russia’s military aggression in Ukraine, the Ministry of Agrarian Policy expects in 2022 a reduction in the sown area of spring crops by 20.5%, or 3.5 million hectares – to 13.44 million hectares from 16.92 million hectares in 2021 year.
The Minister also pointed to the presence of a certain forecasted shortage of fuel, but at the moment Ukrainian farmers have access to fuel for sowing. “It is clear that the sowing season is just beginning, and the amount of fuel needs to be increased, but in a market economy with such an enterprising conscious people as ours, especially with farmers, a solution will be found,” he stressed.
At the same time, it is clarified that the priorities of the Ministry of Agrarian Policy at present are the establishment of logistics, enabling farmers to continue working and earning income, keeping businesses from closing, providing shareholder the opportunity to receive rent, as well as employment of workers in the agro-industrial complex. Solsky emphasized in the message that today all states need to adequately and deeply understand the complexity of the situation and make every effort to stop the armed aggression of the Russian Federation. “After all, any continuation of the war is a rise in the cost of products for all countries, including even those who had not thought about it before,” the minister summed up.
As reported, as of April 1, Ukraine sowed 0.60 million hectares with basic agricultural crops, which is 4.4% of the 13.44 million hectares planned for the current season.
Sowing of spring crops has already started in 21 regions of Ukraine, whereas last year 15 regions started sowing on the same date. The total area sown with spring barley as of April 1 amounted to 327.3 thousand hectares, spring wheat – 81.0 thousand hectares, peas – 62.3 thousand hectares, oats – 50.1 thousand hectares, sunflower – 33.7 thousand hectares ha, sugar beet – 30.6 thousand ha, soybean – 10.4 thousand ha, spring rapeseed – 7.6 thousand ha. Due to the military aggression of the Russian Federation in Ukraine, a decrease in the sown areas of high-margin crops (sunflower and corn) is expected this season, while increasing the sown areas of crops that are easier to produce, but important in terms of food security – peas, barley and oats.
The sowing campaign amid quarantine started quite well in all regions of Ukraine, the pace is approximately the same as in 2019, with a slight advance due to early spring, Director General of UkrAgroConsult consulting agency Serhiy Feofilov has said.
“The import component in sowing resource is still very high. Nevertheless, the main material and technical resources were imported into Ukraine and purchased by farms before the quarantine and the devaluation. The negative impact on cost of production is still minimal,” the agency said on UkrAgroConsult’s website, citing Feofilov.
Feofilov said that it is a positive point in the fact that corn seeds are mainly produced at Ukrainian seed plants, only parental forms are imported. The expansion of spring grain will be precisely due to corn. The situation with plant protection is almost the same, namely all needed is imported, except that the line of products will decrease against expectations, the top manager said.
“The situation is contradictory in terms of fuel. Fuel supply is sufficient and the main intrigue is the price level. On the one hand, we can expect it to decline after the oil falls. On the other hand, fuel sellers tend to price stabilization, given hryvnia devaluation and a possible reduction in supplies,” the director general of UkrAgroConsult said.
IMC agricultural holding has completed the spring sowing campaign on 104,100 ha compared with 105,200 ha in 2018.
According to a company press release, the sowing area under sunflower this year amounted to 22,800 hectares, under soybean – 10,800 hectares, under corn – 69,500 hectares. Also about 1,000 hectares were planted with fodder crops to meet the needs of the company’s dairy farming.
“In the current season, we managed to sow crops in almost optimal time period, despite the fact that sowing took place with certain pauses caused by weather conditions,” Chief Operating Officer of the IMC Oleksandr Verzhykhovskyi said.
IMC’s core business is cultivation of grains, oilseeds and milk production in Ukraine. The agricultural holding cultivates about 130,000 hectares of land in Poltava, Chernihiv, and Sumy regions. It owns storage facilities with a capacity of 554,000 tonnes of grains and oilseeds.
Ukraine has started sowing soybeans, planting 31,000 hectares (2% of the forecast) with this crop, the press service of the Ministry of Agrarian Policy and Food has reported.
According to the ministry, as of April 17 some 1.5 million hectares are sown with barley (94%), 150,000 hectares with wheat (90%), 165,000 hectares with oats (84%), and 283,000 hectares with peas (83%).
Ukraine has also sowed 264,000 hectares with corn (6%), 194,000 hectares with sugar beets (79%), and one million hectares with sunflower (18%).
In addition, according to the ministry, agrarians fertilized winter crops on 7.5 million hectares (99% of the forecast).
As of March 7, 2019, Ukraine has started sowing early grain and leguminous crops in seven regions. The crops had been sowed on 58,000 ha or 3% of the target.
According to a report of the Agricultural Policy and Food Ministry of Ukraine, spring barley was sowed on 34,000 ha (2%), wheat on 1,000 ha (1%), peas on 23,000 ha (7%) and millet on 500 ha.
In addition, fertilizer input on areas with winter crops in grain was finished on 4.6 million ha (60% of the target).
Fertilizers were input on 3.8 million ha with winter wheat (59%), on 43,000 ha with winter rye (38%) and 718,000 ha with winter barley (71%).
In addition, areas with winter rapeseeds were filled with fertilizers on 1.1 million ha (83%).
The ministry said that the logistics of agricultural products remains a bottleneck of Ukrainian exports.
“Therefore, there is a proposal and a common desire of the response team members [the interdepartmental response team in agricultural logistics] to transfer its work to the systemic track. In parallel with the current and urgent issues, we will work on a long-term development strategy and logistics efficiency in agriculture, and jointly worked out decisions and proposals will be submitted to the meetings of the Cabinet of Ministers of Ukraine,” Acting Minister of Agricultural Policy and Food Olha Trofimtseva said.
According to her, among the key issues requiring strategic discussion are three issues: the predictability of operation or closure of low-efficiency stations and the possibility of alternative solutions; fair and transparent pricing; systematic vision of the formation of routes of transportation of agricultural products in 2019.
