The portfolio of agricultural equipment provided by lessors to Ukrainian farmers increased by 22.2% in 2021, to 5,870 units, in particular, 2,050 tractors (35% of the total number of equipment), 645 combines (11%), 587 tillage machines (10%) and 530 seeders and harvesters (10%) were leased, according to the website of the Ukrainian Union of Lessors (UUL).
“The total number of agricultural machinery financed by organized market leasing companies amounted to 5,870 units as of the end of 2021. With this result, the lessors’ portfolio of agricultural machinery increased by 22.2% over the year, which indicates the industry’s ability to meet the growing demand of a domestic agricultural producer for the renewal and modernization of agricultural machinery,” the union said in a statement.
At the same time, UUL member companies in 2021 accounted for 2,410 units of agricultural machinery leased (41% of the total portfolio), which is 10.5% more than in 2020.
Among the union’s members, OTP Leasing concluded the most transactions for leasing agricultural machinery last year – 1,250 units (52% of the total), Kredobank – 360 units (15%), Alfa-Leasing – 260 units (11%), and ULF Finance – 168 units (7%).
The most intensive deals on leasing agricultural machinery were carried out in the second and third quarters of 2021 – 684 units and 679 units, respectively, due to the seasonality of the agricultural business.
The Cabinet of Ministers of Ukraine has proposed in 2020 to refuse of target subventions to the agricultural enterprises and to transfer all budget funds in an amount of UAH 4.4. billion for compensation of interest rate under the credits, which the framers and small agrarian entities will take for land purchase, Deputy Economy, Trade and Agriculture Minister Taras Vysotsky said. “There would be no subventions [in state budget 2020],” he told the journalists in Kyiv on Tuesday.
Vysotsky said that partial compensation for the interest rate would be on the level of the NBU discount rate, which now stands at 16.5%.
The deputy minister explained that when calculating the total amount of compensation, it was assumed that the land market was planned to be launched in the second half of the year, the average price of one hectare of land will be about UAH 40,000 with an average normative monetary value of UAH 27,000 per ha, and about 5% of unit owners are ready to become buyers, which corresponds to approximately 1.35 million hectares.
Vysotsky also said that the bill on land turnover, which should be submitted to the Verkhovna Rada by October 1, implies restrictions on the purchase of 15% of the agricultural land of the region and 0.5% of the country in the absence of such restrictions for tenants, as well as a minimum selling price on the level of normative monetary value. Among other conditions, the tenant’s priority right to buy out and the possibility of purchase by non-residents (excluding representatives of the aggressor country) only through the registration of a resident company in Ukraine.
Ukrainian farmers in April-June 2019 signed first international crop receipts, the press service of IFC Ukrainian Crop Receipt Project has reported.
According to the press service, at the end of April 2019, Zori Obmacheva LLC (Chernihiv region) issued commodity crop receipt for the supply of corn to the Estonian company Letofin. The receipt was issued in support of the forward contract for the supply of the future corn crop. The agricultural enterprise received pre-financing in the amount of about 40% of the total value of production.
Early June, the Salix agricultural enterprise (Lviv region) raised UAH 1.2 million from the Estonian grain trader Everwelle, which has been operating in Ukraine for over 10 years. An international receipt was issued under a forward contract, the manufacturer received financing at the rate of 12% per annum with settlement in foreign currency.
“Crop receipts allow even small farms to move to a new stage, start working with foreign creditors and attract cheaper financing on a par with agricultural holdings,” the press service said.
