Ukrainian farmers received 1,238 crop receipts for the amount of UAH 8 billion since the beginning of 2019, which is 721 receipts and UAH 4.8 billion more than a year ago, the Ministry of Economic Development, Trade and Agriculture has reported.
According to the ministry, since the introduction of the project in Ukraine in 2015 a total of 2,116 crop receipts were registered for the amount of UAH 14.5 billion. Over 130 companies lend using crop receipts, both Ukrainian and international.
By the number of the receipts 60% are financial ones, providing for relations in cash. The average size of liabilities for one financial crop receipt is UAH 5.8 million, for a commodity one – UAH 8.4 million.
Deputy Minister of Economic Development, Trade and Agriculture Inna Meteleva on October 21 at a meeting with representatives of the Crop Receipts Project in Ukraine of the International Finance Corporation (IFC) discussed the issue of changing the nature of relations on the use of crop receipts from contractual obligations for operations with securities by introducing separate legislative changes.
“Changes in the legislation will strengthen the balance of interests of the debtor and the creditor, as well as expand the business opportunities of working with crop receipts, which will provide the prerequisites for the development of refinancing,” Head of the Crop Receipts Project in Ukraine Leah Soroka said.
In the near future it is planned to submit these changes for discussion with stakeholders and interested central executive bodies to form a consolidated position.
The Crop Receipts project in Ukraine is being implemented by IFC, a member of the World Bank Group, in partnership with the Swiss Confederation. The practical application of crop receipts began in 2014 in Poltava region. Soon other regions of the country joined this financial tool.
The volume of crop receipts since early 2019 as of May 31, 2019 totaled UAH 6.5 billion, according to a posting on the Facebook page of state-owned enterprise (SOE) Agroregisters. According to the enterprise, a total of 991 crop receipts were registered in January-May 2019.
Since the start of the introduction of the project in Ukraine in 2015, a total of 1,842 crop receipts for UAH 12.9 billion were registered. Over 900 farmers with different land banks used the tool.
“In the first five months of 2019, farmers received more than UAH 6.5 billion from crop receipts, most of which was spent on spring field work. For comparison, the same figure for 2018 was almost 66% lower and amounted to UAH 2.2 billion,” the enterprise said.
Agroregisters said, with reference to the preliminary forecasts of the Ministry of Agricultural Policy and Food, that the cost of the sowing campaign in 2019 was approximately UAH 134.2 billion, of which UAH 120 billion is provided by own funds of agro-industrial enterprises, and another UAH 15 billion are raised from external sources.
The Crop Receipts project in Ukraine is being implemented by International Finance Corporation (IFC), a member of the World Bank Group, in partnership with the Swiss Confederation. The practical application of crop receipts began in 2014 in Poltava region. Soon other regions of the country joined this financial tool.
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.
Farmers registered 514 crop receipts for the amount of UAH 3.2 billion in January-September 2018, Ukraine’s Agricultural Policy and Food Ministry has reported.
According to the ministry’s report, crop receipts were issued with future crops used as collateral. Since the launch of the tool as of October 9, 2018, farmers registered 696 crop receipts for the amount of UAH 4.4 billion, including 290 commodity receipts for UAH 2.5 billion and 406 financial receipts for UAH 1.9 billion.
The ministry said that liabilities under 176 crop receipts for UAH 1.4 billion were completed.
The ministry said that in 2018, 74% of the total crop receipts were registered. Producers of grain and oilseeds, producers in vegetable growing, gardeners and livestock breeders used the tool.
The ministry said that 54% of crop receipts were issued to entities with a land bank of 1,000-5,000 ha, 36% – with over 5,000 ha and 10% with up to 1,000 ha.
The U.S. Department of Agriculture (USDA) in August improved the forecast for maize crop in Ukraine in 2018 by one million tonnes compared to the July forecast, to 31 million tonnes. According to a report on the website of the U.S. department, the forecast for maize exports for the 2018/2019 marketing year (MY, July-June) was also increased by 500,000 tonnes, to 24.5 million tonnes.
The USDA maintained the forecast for wheat exports from Ukraine in the 2018/2019 MY at 16.5 million tonnes with the yield being 25.5 million tonnes, which corresponds to the figures published in July.
In general, the U.S. department raised the forecast for grain harvest in Ukraine by 1.85 million tonnes, to 65.6 million tonnes, exports by 1.45 million tonnes, to 45.66 million tonnes.
As reported, with reference to the Ministry of Agrarian Policy and Food of Ukraine, exports of grains in the 2017/2018 marketing year, according to preliminary data, amounted to 39.4 million tonnes against 43.8 million tonnes for the previous MY.
The harvest of grain in Ukraine in 2017 amounted to 61.28 million tonnes, which is 4.7 million tonnes less than in 2016.