Ukraine plans to support agrarian sector in 2023 - minister

MOSCOW. Jan 11 (Interfax) - Ukraine intends to allot 1.56 billion hryvni in government support for the agricultural sector in 2023, which is already included in the state budget, and receive $432 million to credit the sowing campaign at a low interest rate and finance agrarians' basic needs.

The International Finance Corporation (IFC) and other donors plan to issue $1 billion to Ukraine to fund a program of easy loans to agrarians in 2023, Ukrainian media quoted Agrarian Policy and Food Minister Nikolai Solsky as saying at a press conference on January 4.

The Ukrainian state budget for 2023 already provides for 1.56 billion hryvni of government support, of which 1 billion hryvni should be used to pay grants for the development of gardens and greenhouses, 360 million hryvni for the functioning of a fund partially guaranteeing loans in the agricultural sector, which had been launched shortly before the crisis, and 201 million hryvni for the development of organizations of water users.

With the help of the World Bank, Ukraine should receive $432 million in 2023, of which $202 million will be used to compensate for interest rates on loans to the agricultural sector under the 5%-7%-9% program, Solsky said. Another $80 million will be spent on one-off payments to farmers cultivating from one to 120 hectares of land and one-off subsidies to owners of three to 100 head of cattle.

In addition, Ukraine's foreign partners would allot $50 million to finance power supply to grain storage facilities in Ukraine and $100 million to buy Ukrainian wheat for shipping it to African and Asian countries.

Another $1 billion could be obtained in 2023 from the IFC and other donors to support easy loans for agrarians supposedly at the 50/50 ratio, he said.

Speaking of the outcomes of 2022, Solsky said citing preliminary data that Ukraine exported at least $20 billion worth of agricultural produce, which he described as quite a good figure, even though it dropped by half from 2021.

The Ukrainian agricultural sector received most of the forex revenues in 2021, while a significant part of profits from agricultural exports in 2022 went to infrastructural and logistical companies, including foreign ones, Solsky said.

"Anyway, this sector is still number one in terms of the country's forex revenues, and there are big chances that the situation will be similar next year," he said.

As reported with reference to tentative data presented by Deputy Economy Minister and Ukraine's trade representative Taras Kachka, Ukraine exported 99.8 million tonnes of products and goods of all types worth $44.1 billion in 2022, which is 38.4% and 35% less than in 2021 respectively.

Most of the 2022 revenues came from Ukraine's agricultural exports, including corn ($5.94 billion, +1% compared to 2021), sunflower oil ($5.46 billion, -14.4%), wheat ($2.6 billion, -44.7%), rapeseed ($1.54 billion, -8.6%), sunflower seeds ($1.26 billion, +3,200%), soybeans ($862 million, +43%), and poultry meat ($852 million, +19%).

According to the Agrarian Policy and Food Ministry website information, referenced by the Ukrainian media on January 9, Ukrainian agricultural producers got about 43,650 loans totaling 95.47 billion hryvni in 2022 under the Affordable Loans 5%-7%-9% program.

Agrarians were eligible for a special program of financing the sowing campaign from mid-March to May 31, 2022, under which they were able to borrow up to 60 million hryvni at 0% interest, with 80% of the financing guaranteed by the state, the ministry said.

Over the period of the program's effect, Ukrainian farmers received 24.72 billion hryvni in loans. Since June 1, 2022, applications for financing from agricultural businesses have been accepted under the conventional 5%-7%-9% program.

The regions leading by the volume of loans received include the Kiev region (15.5 billion hryvni), the Vinnitsa region (10.2 billion hryvni), the Kirovograd region (8.6 billion hryvni), the Dnepropetrovsk region (6.8 billion hryvni), and the Odessa region (6 billion hryvni).

Most of the loans to farmers came from PrivatBank, Raiffeisen Bank, Ukrgasbank, Oschadbank, Ukreximbank, Credit Agricole, and the First Ukrainian International Bank.

The Ukrainian government has offered financial support to micro-, small-, and medium-sized businesses for rebuilding completely or partially destroyed manufacturing facilities, and agribusinesses can also count on such support, the ministry said.

In addition, banks are financing businesses to purchase and install uninterrupted power supply equipment at 0% interest.