Agricultural and processing support is a key element of the Made in Ukraine policy announced half a year ago. The policy provides for both new aid mechanisms for farm producers and further support for the instruments that have proven to be most valid in other government-funded programs, most particularly the "Affordable loans 5-7-9%".

This year alone, the government budgeted UAH 1 billion in funding for partial compensation for the cost of domestically manufactured agricultural machinery and equipment. The government compensates agricultural producers for 25 percent of the cost of the Ukrainian made equipment they purchase. The range of agricultural produce and machinery products eligible for compensation under this program is continuously expanded, Taras Vysotsky, interim Ukrainian Minister for Agrarian Policy and Food, said in a blitz interview for Ukrinform.

CASHBACK FOR PURCHASE OF UKRAINIAN-MADE EQUIPMENT

- Mr. Taras, the program of partial compensation for the purchase cost of domestically made agricultural machinery had existed in Ukraine even before the Great War. Now it has received a new lease of life: the listing of domestically-manufactured agricultural machinery products eligible for compensation under this program has been systematized and updated, the range of the products expanded, and most importantly, the amount of government funding for relevant compensations increased.

- Previous experience has shown that efforts in this regard promise much and deliver much. The idea for this program, which involves a kind of symbiosis -- the provision of production assets to farmers and the support to the domestic agricultural machinery manufacturing sector –originated, if I am not mistaken, in 2017. At the stage of its implementation in 2020-2021, the demand exceeded the government’s financial abilities. This confirms, among other things, that farmers do recognize the high quality of the domestic machinery and equipment. I don’t think they would buy a low-quality product, even if compensated. After all, it means investing 75 percent of own or loaned money. Hence the second important finding: farmers are ready to invest in renovation of their machinery fleets, meaning they are looking into the future.

Now the program has been re-stared. In particular, we update the listing of manufacturers and the products they offer. Somewhere, we, unfortunately, have lost production capacities due to the occupation, and somewhere businesses sustained significant destruction, or have had to relocate production capacities or change product portfolios.

Besides, it is necessary to understand that demand for soft loans will peak in the fall. Because traditionally, most of the new equipment is purchased at the time farm produce sales reach their maximum, which is the second half of the year, after completion of harvesting operations.

- Is everything our farmers need produced in Ukraine?

- Currently in Ukraine, there are production capacities in place for everything they need, excepting self-propelled sprayers and grain harvesters. Incidentally, we have domestic designs for a sprayer and a harvester, but there are challenges to be tackled to set up production lines and expand the lineup.

There are also tractors, but the lineup is not as wide as we would like it to be. Instead, we have a pretty wide assortment of trailed equipment, soil treatment and sowing machinery, equipment for grain terminals, milking machines, as well as irrigation machinery.

In general, 70–80 percent of the full range of agricultural machinery is manufactured in Ukraine, and it’s a matter of time when production capacities for the other 20–30 percent will be there.

AFFORDABLE LOANS AND NON-REFUNDABLE GRANTS

- I know that businesses producing and processing agricultural produce are among the major beneficiaries from the "Affordable loans 5-7-9%" program...

- Under this program, farmers are eligible for loans worth up to UAH 90 million, and those engaged in processing and animal husbandry sectors - up to UAH 150 million. On top of that, the validity of the subsidized loans has been extended until March 31, 2025, which is important where capital investments are involved.

Under this program this year, farm businesses took out loans worth collectively UAH 28 billion, including UAH 15 billon taken out under “portfolio guarantees”. That is to say that farm businesses are major beneficiaries from the preferential loan program. One important note: we are not talking about a few dozen or hundreds of businesses that have access to these loans, but about nearly 8,000 agricultural enterprises and farms.

- Grant programs, in particular for processing, are less extensive, involving as few as hundreds of millions worth of granted funds. But this kind of support is still very much needed and beneficial to producers, because it is a non-refundable resource.

- The grant program for planting gardens and building greenhouses continues to operate. For this year, UAH 480 million worth of grants is planned to be disbursed under this program.  There is still enough free funds. Therefore, we invite everyone willing to avail of this opportunity. We offer grants worth up to UAH 10 million per garden, and up to UAH 7 million per greenhouse.

Thanks to this program, more than 2.600 hectares of new gardens have already been planted throughout the country. This involved, among other things, tens of thousands of seasonal jobs and several thousand permanent jobs.

Despite financial challenges, the government pays the money budgeted for this program every month. The funding of the program is guaranteed at least for the remainder of this year. It affects a wide variety of horticulture products, including but not limited to nuts, apples, blueberries, sea buckthorn, sweet cherry, and grape. Basically, we are ready and willing to support any sort of horticulture, whoever has a business idea. It matters that the government provides 70 percent of investment funds at the initial phase, even before planting operations actually begin, meaning it is ready to share potential risks with the garden farmer.

- What about support for melioration programs?

- There is such program for the current year. It provides for a compensation of up to 50 percent (up to UAH 26.500 per hectare) of the amount of money spent on the renovation of existing or construction of new melioration systems. Investors in such projects that will be launched before October 31 are welcome to apply for the program during November and expect compensations at the end of the year.

- Farmers are interested also in re-start of the livestock support program…

- At the end of June -the beginning of July, applications for targeted budgetary subsidies from cattle, goat and sheep farmers were being submitted and processed via the National Agrarian Registry. The relevant budgetary support program provides for UAH 7,000 per-animal compensation for farmers keeping from 3 to 100 cows, and UAH 2,000 per-animal compensation for farms keeping 5 to 500 ships or goats.

Just to summarize, nearly 12,000 livestock farmers will be eligible for compensations under this program that has a budget of UAH 600,732,000, including a bit over UAH 200 million budgeted in support for nearly 2,000 goat and sheep farms. The program is funded with the money provided by international partners.

These programs are important in that they support livestock farmers and help in setting up a market niche for family farms, that is, where sole proprietors are ready to transform, switch to machine milking and ensure appropriate quality of the milk produced for further processing.

- Regarding support projects for low-capacity power generation and efficiency, are they parts of broader programs, or separate projects targeting the farming sector specifically?

- We understand that our economy as a whole needs a support. Therefore, every business, including a farming one, is eligible for a subsidized loan worth up to UAH 150 million to set up a generating capacity of its own. Furthermore, we are adding food businesses to sector-specific and national registries of critical infrastructure companies. There has been launched a targeted program to provide 153 autonomous power generators to ensure uninterrupted operation of critical infrastructure facilities, first and foremost, in frontline areas.

Interviewed by Vladyslav Obukh

Photo courtesy of Yevhen Kotenko