Ukrainian farmers during the period of the Affordable Loans 5-7-9% program and portfolio guarantees opened for them until May 31 had attracted UAH 38.507 billion in total, the Ministry of Agrarian Policy and Food reported.
“Credit funds were attracted by 18,078 farmers. Most of the loans under the portfolio guarantee program 80% were provided by state-owned banks,” the release says.
According to it, PrivatBank issued such agricultural loans for UAH 8.243 billion, Ukrgasbank – for UAH 4.355 billion, Oschadbank – for UAH 2.814 billion, Ukreximbank – for UAH 2.285 billion.
The top 5 regions in terms of attracted financial resources included Kirovohrad (UAH 4.712 billion), Kyiv (UAH 4.942 billion), Vinnytsia (UAH 3.289 billion), Odesa (UAH 2.940 billion) and Dnipropetrovsk (UAH 2.937 billion) regions.
They are followed by Poltava (UAH 2.407 billion), Volyn (UAH 2.117 billion), Lviv (UAH 2.094 billion), Khmelnytsky (UAH 1.758 billion) and Ternopil (UAH 1.527 billion) regions.
The ministry reminded that according to the terms of the program, farmers could attract up to UAH 60 million at 0% per annum for up to 6 months. Purpose of lending is an investment loan for the purchase of agricultural machinery, a loan for replenishment of working capital for the purchase of seeds, fertilizers, fuels and lubricants.
The size of the loan guarantee from the state reached 80% of the loan amount. A pledge of 20% of the amount could be A loan object, movable, immovable property – commercial real estate, special equipment, fixed assets, including bought for credit funds, as well as grain.
“One stage has actually been passed, but ahead – the periods of harvesting and selling the harvest are no less important. Therefore, the government will continue to work to ensure that farmers are provided with affordable financing – this is a basic condition for their development and competitiveness,” First Deputy Minister of Agrarian Policy and Food of Ukraine Taras Vysotsky said.
The cancellation by the UK of all duties and quotas on products from Ukraine to support it in the face of a military invasion by the Russian Federation may allow Ukrainian farmers to increase their presence in the UK markets of poultry meat, walnuts, honey, cranberries, blueberries and peas.
The list of high-margin agricultural products that Ukraine could supply to the UK at a time when the export of its traditional agricultural raw materials is blocked by the aggressor country of the Russian Federation was published on the website of the Ukrainian Agribusiness Club (UCAB) on Wednesday evening.
According to the results of 2021, agricultural products worth $553 million were exported from Ukraine to the UK, including sunflower oil (31% of export earnings), rapeseed (28%) and corn (24%). However, the supply of traditional agricultural crops in 2022 is difficult due to the naval blockade of Ukraine by Russian warships, as a result of which the country can potentially increase the export of a number of other agricultural products by road.
Ukrainian farmers, in particular, can focus their export efforts on the supply of poultry meat to the UK. The volume of its export in 2021 was 2,600 tonnes. The share of Ukraine of UK imports is 1%. Main competitors: the Netherlands, Poland, and Belgium.
The export of walnuts without shells is also promising. The volume of its export in 2021 was 0700 tonnes. The share of Ukraine of UK imports is 6%. Main competitors: the United States, Germany, and China.
According to the UCAB, Ukrainian farmers can increase honey exports to the UK (800 tonnes were delivered in 2021). The share of Ukraine of UK imports is 1%. Main competitors: China, Poland, and Mexico.
The export of cranberries and blueberries is also promising (supplies in 2021 – 200 tonnes). The share of Ukraine of UK imports is 0.3%. Main competitors: Spain, Peru, and Chile.
Ukraine exported 4,900 tonnes of peas to the UK in 2021, which amounted to 12% of the UK market in 2021. At the same time, Russia is Ukraine’s main competitor in this market, which, taking into account the economic sanctions imposed against it, adds an advantage to Ukrainian suppliers.
“Now the railways and seaports of neighboring countries are heavily loaded due to the export of grain crops, the volumes of which we have the largest. Therefore, to increase export earnings, we should focus on the export of goods that have a higher price with less weight and thus export by road,” UCAB cites a promising export model from its analyst Svitlana Lytvyn.
BERRIES, HONEY, PEAS, POULTRY, UK, UKRAINIAN FARMERS, WALNUTS
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.
