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292 million USD of state subsidies to Ukrainian farmers: Who's got this money?

Author : News agency Liga.net

Source : Liga.net

Find out Ukraine's top ten businessmen - rating of recipients of agrarian state aid in 2017-2019
12:00, 24 February 2020

Liga.net

In recent years, the issue of state aid to agrarians has been the focus of the entire agrarian community – from small farmers to agrarian barons.

LIGA.net decided to find out which of the Ukrainian farmers received the most agricultural money. We requested information on all programs of agricultural state support in the Ministry of Economic Development, Trade, and Agriculture, and also compared the data with the payments of the State Treasury for the previous three years. Thus, we allocated the farmers, who got the largest amounts of budget funds.

Five programs

During 2017-2019, five large budget support programs were implemented for Ukrainian farmers. Actually more. But for the rest of the programs, the amounts of subsidies were relatively small.

Related: Ukraine's parliament might consider market bill this week, - Agriculture minister

The total budget of all programs is 296 million USD. Who did get them?

In 2017, farmers received 163 million USD from the budget as part of the quasi-accumulation of VAT program. Farmers get subsidies monthly, which depend on the amount of VAT paid by them to the budget.

Companies could accumulate the amount of value added tax and then use this money for business development. The larger the consignment of goods for export, the more VAT is returned to the manufacturer.

Quasi-accumulation of VAT was presented as a long-term initiative. In confirmation of the seriousness of these intentions, the Budget Code was supplemented with an article guaranteeing in 2017-2021 the annual volume of state support of at least 1% of agricultural GDP.

According to the results of the program, most of the state money was received by the companies of the owner of the Myronivsky Hliboproduct, Yuriy Kosyuk (Vinnytsia Poultry Factory, Myronivska Poultry Factory, Starynska Poultry Factory, Oril-Leader, Peremoga Nova), Ukrlendfarming of Oleg Bakhmatyuk Group (Agroholding Vanguard , DP Avangard-Agro and Poultry Farm Chornobayivske) and APK-Invest of Borys Kolesnikov.

Related: Industry or agriculture: What Ukraine needs to bet on?

In addition to quasi-accumulation, in 2017 there was another way of state support for agricultural producers: a program for cheapening loans.

The total amount of support for this article was much more modest – 12 million USD. Another 10,8 million USD under the same program was allocated to farmers in 2018. We combined the recipients into one schedule.

In this case, small farmers  private agricultural firms and farms -have got the most.

The top five recipients of loan compensation were the companies of second largest chicken producer Yevgen Sigal (Agromars Complex company), ex-president Petro Poroshenko (Podilla food company and Zorya Podilla food company), MP Sergei Labazyuk (Agrarian company 2004).

Much more money – 52 million USD – in 2018, farmers received as part of a program for partial compensation of the cost of building livestock complexes.

How does she work? The base for calculating subsidies was tied to the cost of ongoing investment projects. Whoever builds more gets the most budgetary compensation.

Related: Business partners Bogdan and Solsky got control over agricultural policy of Ukraine, and NABU do not investigate them, - press

It is no secret that in 2018, Myronivsky Hliboproduct (Ukraine's largest agricultural produce company, based in the small city of Myronivka, Kyiv Oblast (hence its name), with over 50% of the country's "industrially produced poultry." CEO is billionaire Yuriy Kosiuk, ex-president Poroshenko’s associate, - ed.) actively built its largest poultry farm in the Vinnytsia region. As a result, Kosyuk’s company received 75% of all subsidies.

In 2019, the program continued, but its budget was much more modest – 21,4 million USD. A third of them went to Kosyuk again, another 15% to Oleksandr Mostipan, the owner of the Nyva Pereyaslavschyny pig-breeding complex, and Borys Belikov, the Ovostar company.

In 2018-2019, there was also a program for partial compensation of the cost of breeding resources - for each head of cattle, farmers received from the state 60-80 USD.

The company of the owner of the largest producer of Kernel sunflower oil Andriy Verevsky is among the 2018 leaders.

In addition to livestock breeders, in 2019 the state supported those who build grain storage facilities - elevators. 21,5 million USD were allocated for these purposes.

The first three recipients are firms of Andriy Verevsky and Serhiy Labazyuk.

Related: Ukraine’s Cabinet promises loans for land purchase at 3-5% per annum for agricultural producers

Who is bigger?

Who of the farmers have got the most state money? Using the data of the Ministry of Economy and the State Treasury, we compiled a rating of recipients of agricultural subsidies for the previous three years.

And what about 2020?

For 2020, the government again revised the rules of state support for farmers, allocating 171,6 million USD for state aid for these purposes.

What will the state spend planned billions on? Prime Minister Oleksiy Honcharuk said that the money would be distributed in four programs: 40 million USD for supporting livestock breeders and cheaper equipment, 16,3 million USD for gardeners and farming, 49 million USD for cheaper loans and 1 million USD for loan guarantee fund for the purchase of land.

Will Kosyuk manage to become a leader again? Maybe, but the amount of subsidies would be significantly reduced.

Related: Will Ukraine be able to increase agricultural exports?

This time, none of them will get hundreds of millions, no matter how hard they try and no matter how much they build. The maximum amount of state support per company is limited to the amount of 2 million USD, Taras Vysotsky, Deputy Minister of Economic Development, Agricultural Trade, told LIGA.net.

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