There is growing concern about how Ukraine is funding its farmers. Critics describe the current subsidy distribution policy as woefully unfair and lacking transparency.
“Today, in particular, we are concerned about the distribution of government subsidies in Ukraine for the development of the agricultural sector, being one of the most important industries of Ukrainian economy, the leading export industry and having the significant development potential,” said MEP Alberto Cirio.
Together with MEP Fulvio Martusciello, Cirio will lead a roundtable discussion on this issue in the European Parliament on March 7. Their goal for initiating the talk is to raise awareness about the reported opacity of government subsidies distribution in Ukraine’s agricultural sector.
Their effort is timely. On February 28, the European Commission unveiled a package of macro-financial assistance for Ukraine worth €1bn. If the European Parliament and the Council of Europe back the Commission’s proposal, the first tranche could be released as early as July.
Approval, however, will hinge on the Ukraine’s willingness to beef up anti-corruption measures and implement relevant legislative initiatives. At the same time, there are tens of thousands of small and medium-sized enterprises that are badly in need of the government support. Among them there are enterprises of the grain sector that were not even included in the list of enterprises eligible to receive subsidies.
“The new EU requirements will also be related to the fight against corruption in Ukraine,” said Martusciello. He stressed that the funds transferred to Ukraine from Brussels include contributions from EU taxpayers. This is why “we watch closely how Ukraine fulfils its obligations and the state policy in the country in general.”
According to Cirio, the Ukraine authorities, namely the president, prime minister and parliamentarians, need to focus on government subsidies formation in the agricultural sector and on the principles of their distribution in 2018 and in future.
A repeat of last year’s funding should be avoided. A third of the €130m budget approved in 2017 was allocated to just one company, PJSC Myronivsky Hliboproduct. What is more, a third (35 percent) of the total subsidies was allocated to just one company, PJSC Myronivsky Hliboproduct. It’s the country’s largest industrial company monopolist in Ukraine. CEO and chief beneficiary of the company is oligarch- billionaire Yuri Kosyuk – one of the richest people in Ukraine, according to Forbes Ukraine. Myronivsky Hliboproduct is the most highly profitable company in the Ukrainian agribusiness.
At the same time, tens of thousands of small and medium-sized agricultural companies are working in Ukraine, which badly state support, among them the enterprises of the grain sector, which are not included in the list of those that are eligible for subsidies.
Tens of thousands of other agricultural companies in the Ukraine had to share the remaining 65 percent of the subsidies.