The net profit received by agricultural, forestry and fisheries enterprises in 2020 amounted to UAH 81.1 billion (11% down compared to 2019), this value exceeded the profitability indicators of other types of economic activity in Ukraine, the National Scientific Center Institute of Agrarian Economics (IAE) said on its website on Tuesday.
“Last year, 82.6% of enterprises in the industry saw UAH 107.9 billion of net profit, while only 17.4% of enterprises ended the year with losses of UAH 26.8 billion. This is the best indicator among all types of economic activity, where on average there were 71.0% of profit-making and 29.0% of loss-making enterprises,” Director of the IAE Yuriy Lupenko said.
The IAE recalled that the net profit of agricultural enterprises in 2019 amounted to UAH 91.3 billion, and the share of profit-making enterprises – 83.0%, while in the whole economy it was UAH 671.9 billion and 74.0%, respectively.
“So, at the end of 2020, the profits of agricultural enterprises decreased by almost UAH 10 billion, while maintaining a high share of profit-making enterprises,” Lupenko said.
In addition to agriculture, the largest net profit to the Ukrainian economy in 2020 was brought by enterprises of the financial sector and insurance activities (UAH 25.3 billion); repair of vehicles (UAH 22.2 billion); healthcare and social assistance (UAH 18.9 billion); transport, warehousing, postal and courier activities (UAH 18.0 billion); information and telecommunications (UAH 14.3 billion).
According to the IAE, the most significant losses were incurred in the past year by industrial enterprises (UAH 39.8 billion of loss) and the real estate industry (UAH 35.2 billion). The share of profitable enterprises in the agro-industrial complex significantly exceeds this value for other sectors of the economy. In particular, the share of profitable enterprises in the field of healthcare and social assistance amounted to 75.6% of their total number, repair of motor vehicles and motorcycles – 74.1%, transport, warehousing, postal and courier activities – 71.3%. At the same time, the smallest number of profit-making enterprises in 2020 was in the field of art, sports, entertainment and recreation (53.4%), as well as temporary accommodation and catering (58.8%).
Agribusiness counts on the influence of political authority of newly elected President Volodymyr Zelensky to revitalize the land issue in parliament.
“The land market issue is one of the most exciting. The solution of this issue is largely influenced by the Verkhovna Rada, therefore only political authority can help the guarantor form new rules that have long been in demand by the people,” President of the Ukrainian Grain Association (UGA) Mykola Horbachev told Interfax-Ukraine.
He added that the new president will have to make significant efforts to shift the issue of opening the land market “to a more civilized plane.”
President of the Ukrainian Agribusiness Club (UCAB), CEO of IMC agricultural holding Alex Lissitsa also singled out the land reform as one of the six main areas that requires changes.
In addition, it is necessary to introduce new labor legislation, conduct education and innovation reform, tax liberalization to remove the economy from the shadow, privatization of state-owned property and state-owned companies, as well as partial privatization of Ukrzaliznytsia by allowing private operators to work, Lissitsa said.
The founder of T.B.Fruit group, Taras Barschovsky, agreed with him. He also hopes to speed up the process of opening the land market with the election of Zelensky as head of state.
At the same time, he noted the need for the development of small agricultural enterprises in horticulture and berry-growing, since “only this can save the Ukrainian village.”
Syngenta in Ukraine in partnership with the USAID project Agriculture and Rural Development Support have created the Club of Strategic Partners of the Fruit and Vegetable Market, the first meeting of which was held in Kyiv on May 22.
The initiators of the club announced at the meeting it will unite producers, processors, retailers and restaurateurs in order to stabilize the fruit and vegetable business and fill the Ukrainian market with vegetables and fruits of domestic production, as well as improve product quality and establish a dialogue and interaction between players.
According to Kseniya Sydorkina, the deputy director of the Agriculture and Rural Development Support project, agricultural producers need to adapt the best world practices of agricultural production to remain competitive. New challenges arise for producers and processors, in particular, the introduction of international quality and product safety standards.
“Over the past few years, the needs and preferences of the fruit and vegetable market have changed dramatically. The growth of welfare of the countries in the world creates new consumer preferences for the type, quality, packaging, presentation of agricultural products, which require changing approaches to doing business. Manufacturers, procurers, processors, retail chains need a common platform for an open dialogue and effective partnership. The club of strategic partners is a wonderful initiative,” she noted.
The USAID project Agriculture and Rural Development Support is planned until 2020 and aimed at promoting an integrated and sustainable economic growth through the development of the agricultural sector and the creation of more attractive living conditions in the rural areas of Ukraine.
Syngenta is one of the world leaders in the field of plant protection agents and seed production. The company employs 28,000 people in more than 90 countries.
