RESTRICTED
WORLD TRADE WT/ACC/UKR/12/Rev.11
2November 1995
ORGANIZATION(95-3350)
Original: English
ACCESSION OFUKRAINE
Communication from Ukraine
TheGovernmental Commission onUkraine 'sAccession totheWTO hassubmitted theNote
entitled Agriculture ofUkraine reproduced hereunder.
_______________
Agriculture ofUkraine
1. General indices.
Agroindustrial complex plays animportant roleintheeconomy ofUkraine. Economic, social
andatlastpolitical situation inthesociety, itsfurther development depends upon itsactivity.
Hereconcentrated more thanonethirdofthebasic production assets, onefourth ofthepeople
engaged innational economy, produced over40percentofthegross national product andonethird
ofthenational income, 70percentoftheretail turnover isformed.
Number ofpersons working inagricultural production exceeds 4ml.Inconsequence of
elimination oftheownership share oftheState enterprises inagriculture comes to25percent,
non-State -75.
Innon-State enterprises 71percentofallagricultural workers isengaged. Theareaoftheir
agricultural lands amounts to75percent,value ofthebasicproduction assets -72,volume ofthegross
production -70.
Appropriate legislative andnormative baseisestablished intheagroindustrial complex on
reformation ofownership, privatization ofproperty.
According totheavailable information more than400Statefarms andother Stateagricultural
enterprises (onefifth) and18percentoftheprocessing andagroservice enterprises were already
privatized. Collective agricultural enterprises andstockcompanies areestablished within theframework
ofreformed Statefarms, openstockcompanies areestablished onthebasisofprocessing andagroservice
enterprises. Inthecollective sector 90percentoftheStatefarms havebeenalready reformed bysharing
them.OnthebasisofthereformedStatefarmsjoint-stockagriculturalenterprises,farmers'associations,
unions ofthecooperatives areestablished.
1English only.WT/ACC/UKR/12/Rev.1
Page2
Programme ofthemarket transformation attheMinistry ofAgricultural Production ofUkraine
isconfirmed for1995 according towhich 1960 processing, agroservice andconstructing enterprises
andalso700State farms aretobeprivatized bycreating joint-stock companies.
Agrarian reform conducted nowinUkraine stipulates substantial reconstruction oftheland
relations aimed atthedenationalization ofthelands, change oftheland'sowners andforms ofthe
economic management. Collective andprivate types ofownership atthelandaredetermined legally
equal withState ownership.
Owners ofthelandplotscanestablish jointenterprises, associations, joint-stock companies,
holding companies, other cooperative organizations. Conditions fortheuniform development ofall
types ofownership andeconomy management arebeing established.
Ingeneral agriculture goesthrough theperiod which ischaracterized bythetotalcombination
ofnegative processes. Itmeans reducing ofthefruitfulness andproductiveness, decline oftheratio
ofcommodity production tothetotaloutput inthesocial area,aggravation oftheresource ofproduction,
exhaustion oftheland, depreciation ofthecapital funds uptothecritical level, genetic potential 's
destruction inthevegetation andlivestock-raising.
During thelastfouryears production ofthegross agricultural production decreased atone
third. Costoftheproduced output onallcategories oftheeconomy amounted in1995inthecomparative
prices of1993 only32percentofthelevelof1990.
In1994 itwasreceived 35.5mln.t ofthegrain (byweight aftercrush) or78percentofthe
previous yearand70percentof1990. Productivity from eachhectare inthepublic sector comes to
2700 kgwhich isby16percentlower thanin1993.
Itwasharvested 28.1mln.ton ofsugar rawmaterials whatislessincomparison with1990
by36percent.
Itwasharvested 1.6mln.ton (byweight aftercrush) ofthesunflower 'sseeds whatislessthan
in1993 by24percent.
Itisharvested 5mln.ton ofvegetables, 16.1mln.ton ofpotato what iscorrespondingly by
15percentand23percentlessthanin1993. Incomparison with1993 volumes ofthefruits and
berries production havereduced by59percent, grapes -by41percent, itwasbought 49,400 t-
67percentofthelevelof1993.
Situation inthelivestock-raising hassharply deteriorated, cleartendency forthereduction of
thequantity andlowering oftheproductivity livestock andbirds hassetin.Itisconnected with
insufficiency intheprovender provision, measures onanimal protection, faults inorganization ofthe
reproduction oftheherdandkeeping tothetechnological discipline. Ingeneral inallcategories of
economies in1994itwassold4.1mln.ton ofthemeatinbyaliveweight, 18.1mln.ton ofmilk, 10.2
bln. eggs, 19,300 tofwool what comes incomparison with 1993 correspondingly to
95,99,86,91 percent.
FinancialStateoftheagroindustrialenterprisesisunsatisfactoryandconstantlybecomingworse.
During 6month ofthecurrent yearoverdue payments tothesupply andcontract organizations increased
in3.5times andcomes to40.3trillion karbovanetses. Along withthisoverdue interest ratesforusing
bankcredits increased in2.1times andin11oblasts theyin2-3times exceed sumsofthegranted credits.
Provision, processing andother enterprises owed 85.4trillion karbovanetses totheagricultural goods
producers. General non-solvency oftheagricultural enterprises (bythe1August ofthecurrent year)WT/ACC/UKR/12/Rev.1
Page3
reached 106.5 trillion karbovanetses incomparison with15.4trillion karbovanetses atthebeginning
oftheyear.
Supply oftheagricultural production withmachinery andequipment especially high-efficient
andqualitative equipment isaggravating. Purchases bythegoods producers oftheautomobiles in
1993-1995 incomparison with1990 reduced in30times, grain-harvesting combines -in10,other
machinery -in5-10, mineral fertilizers -in4.5,measures forprotection ofplants andanimals -in
1.5-2, fuelandoilmaterials -in2.1times. Capital investments attheexpense oftheownfunds of
thefarms in1994 incomparison with1990 reduced in11times.
Disproportion oftheintersectoral costrelations isstrengthening. During lastfouryears expenses
attheproduction oftheagricultural products increased in7.8thousand times, inthisamount atthe
material andtechnical resources oftheindustrial origin -in19.4thousand times, from which atthe
mineral fertilizers -in17.7, oilproducts -in51.1, electric power -in62.6thousand times, when the
pricesattheagriculturalproductionincreasedonlyin4.5thousandtimes,inthisamountattheproduction
ofthevegetation -in6.3andlivestock-raising -in3.3thousand times.
Suchsituation isstipulated mainly bytheabsence oftheparity oftheprices attheagricultural
production, economic interest ofthegoods producers inthefinalresults oftheirwork, substantial
lowering ofthebuying power ofthepopulation, sharp worsening inthematerial andtechnical provision.
Processing industry isexisting intheconditions ofthesharp reduction oftherawmaterials
receipt, especially fromtheState resources, sharp deficit ofthegoods packing materials, increase in
prices atthematerial andtechnic resources.
Volume ofthegoods industry production in1994 fellby18.2percentincomparison with
theprevious year(incomparative prices).
Non-equivalence oftheexchange between thevillage andindustry practically paralysed
investments intothedevelopment ofthematerial andtechnical baseofthesector.
2. Management.
Stateagricultural policy isformed bythePresident andtheCabinet ofMinisters ofUkraine.
Theheadministry responsible forthecarrying outoftheagrarian policy istheMinistry of
Agriculture ofUkraine. ButitisnottheonlyoneStatebody ofmanagement which isfulfilling State
policy intheareaofagriculture. Ministries oftheEconomics andFinance playanimportant rolein
theallocation oftheappropriate funds fromtheStatebudget. Besides thisMinistry ofFishing andState
committees attherights oftheministries -State Committee oftheFood Industry, Land Resources
Committee, Committee onWater arealsoparticipating inthecarrying outState agricultural policy.
Ineachoblast andregion agricultural departments areestablished which areresponsible for
carrying outagricultural policy within theframeworks oftheappropriate region.
Subsidies todomestic production, export ofagricultural production in1988-1990
Review.
*Data arebased onfigures indications fixed inyear-budget reports (local, republican, union) in
1988-1990forexportsubsidiesandin1989-1990-fordomesticproduction.Budgetreportswereprepared
bytheMinistry ofFinances ofUkraine.WT/ACC/UKR/12/Rev.1
Page4
*Allfigures areinthousand ofSoviet rubles (former USSR ’scurrency; theofficial average rateto
$USwasabout 0.65ruble to1$US).
Table 1.1989
Thousand Rubles
1989 (budget funds) localbudget republican
budgetunion
budget
1 2 3 4
Collective State-owned enterprises forthe
planned expenses131.039
Compensation ofthedifference inprices 370.78
Compensation ofthedifference between
purchasing anddomestic republican prices:4.075.840
-onmeat 3.312.129
-onmilk
-onsugar beet 97.3
Paying outthedifferentiated extra charge to
purchasing prices4.248.256
Funds obtained from theunion budget
-topayoutthedifference inprices onlivestock 1.452.200
-onmilkanddairy products 968.818
Budget expenditures forextra charge to
purchasing price onagricultural products:
-livestock, meat, poultry, rabbit 4.075.395
-livestock, meat, poultry 2.204
-rabbit leftforlocalneeds 3.312.568
-milkanddairy products 11.207
-milkanddairy products leftforlocalneeds 13.484
-starch, molasses
Paying outthedifferentiated extra charge to
purchasing process foragricultural production
supplied totheState bythelow-profitable and
unprofitable entities, total4.104.759
-potatoes andvegetables
-sugar beets 118
-hop 97.3
19.979
Expenditures connected withtheforeign
economy activities:
-financing theexport operations 46.5WT/ACC/UKR/12/Rev.1
Page5
Table 2.1990
1990 (budget funds) Thousand Rubles
localbudget republican
budgetunion
budget
1 2 3 4
Collective State-owned enterprises forthe
planned expenses170.257
Compensation ofthedifference inprices 108.138
Compensation ofthedifference between
purchasing anddomestic republican prices3.895.295
-onlivestock, poultry, rabbit 3.161.655
Differentiated extra charges topurchasing
prices soldtotheState bytheself-finance
entities475.456
Compensation thedifference inprices for: 8.05
-potatoes processed intoalcohol 20.045
-hop 97.5
-sugar beet
Budget expenditures forextra charge to
purchasing prices onagricultural products:
-livestock, meat, poultry 3.895.259
-rabbit 3.162.493
-milkanddairy products
-potatoes processed intoalcohol 8.047
-starch, molasses 22.488
Paying outthedifferentiated extra charge to
purchasing process foragricultural production
supplied totheState bythelow-profitable and
unprofitable entities, total:3.942.530
1.880.332
-grain, oilseeds 97.5
-sugar beet
-hop 20.045
Expenditures connected withforeign economic
activities:
-financing theexport operations 32.319
Domestic subsidies:
Themain forms ofsubsidizing thedomestic production within theterritory ofrepublic were:
1. budget funds provided tothecollective State-owned farms fortheplanned expenses;
2. budgetfundsforcompensationthedifferencebetweenthepurchasingandinter-republicanprices;
3. paying outofthedifferentiated extra charges topurchasing prices, including theagricultural
production supplying totheState bylow-profitable andunprofitable entities.
Themain sectors ofagriculture thatobtained subsidies were:
1. production ofmeat;WT/ACC/UKR/12/Rev.1
Page6
2. production ofmilkanddiary products;
3. production ofgrain, seeds ofoilcultures; bread products;
4. production ofsugar beet;
5. production ofstarch, molasses;
6. production ofhop;
7. processing potatoes intoalcohol;
8. production ofpotatoes andvegetables.
Financing theexport operations
Analysis ofbudget expenditures in1988, 89,90showed that1989 istheyearwhen theState
began tofinance theexport operations ontherepublican level. There isnosucharticle ofexpenditures
intheBudget of1988.
ItwasdoneduetotheResolution oftheCentral Committee ofCPSU andSoviet ofMinisters
inAugust, 1986 “Onimprovement ofmanagement offoreign-economy relations ”.TheResolution
granted the70biggest associations andenterprises ofSoviet Union therighttodirect export-import
operations.
Therepublican enterprises obtained some independence inforeign economy activity onlyin
1989. Theyweregiven theauthority tocontact oftheirowntheforeign partners andearnhardcurrency.
Until 1986 there wasacomplete anduniversal State monopoly onforeign trade.
Under financing theexport operations wasunderstood theestablishment of“funds ofcurrency
deductions forfinancing theexport-import operations ”where suchdeductions weremade byenterprises
having righttoforeign economy activities.
Scheme:
1. State owned enterprise realizes itsproduction andservices abroad andearns currency;
2. partoftheearned currency isdirected totheState budget;
3. partoftheearned currency isdirected tothefunds ofcurrency deductions;
4. "fund ofcurrency deductions" canbeusedfor:
- import ofrawmaterial,
- import ofservices andequipment forfurther modernization ofproduction process,
- organizing export promoting actions -exhibitions, fairs, producing ofsamples ofgoods
forexport, advertising, business missions abroad.
Thus, until1989 sucharticle ofbudget as"financing theexport operations" wasnotfixed in
therepublicanbudgetandallexpendituresconnectedwithexportsubsidizingwerecalculatedanddirected
through union ministries oftheformer USSR.
Thefollowing key-legislative actsregulated theforeign -economy activity within theterritory
oftheUSSR:
1. The Resolution oftheCentral Committee ofCPSU andtheSoviet ofMinistries No.991
19August 1986 "Onimprovement offoreign-economy relations".WT/ACC/UKR/12/Rev.1
Page7
2. TheResolution oftheSoviet ofMinisters oftheUSSR No.1405 2December 1988, "Onfurther
developmentofforeign-economyactivityofState,co-operativeandotherenterprises,associations
andorganizations"
3. TheResolution oftheSoviet ofMinisters No.203, 7March 1989, "Onmeasures ofState
regulation offoreign -economy activity"
Review.
Themain institution thatregulated allissues connected withforeign -economy activity wastheState
Foreign-Economy Commission oftheSoviet ofMinisters oftheUSSR (SFEC). SFEC wasentitled
togiverighttoexport-import operations totheassociations andenterprises (Resolution No.991, par.4).
Export -import operations werefulfilled trough theauthorized foreign-economy organizations
oftherelated ministries andonthebasisofunitsofMinistry ofForeign Trade oftheUSSR (including
State agro-industry oftheUSSR) (Resolution No.991,para.11,a).
Onlysince 1986itwasrecommended totheministries concerned toinclude totheirplans the
special section -“foreign-economy relations ”(Resolution No.991 para.17).
AsfortheSoviet Socialist Republic ofUkraine thissection ofexpenditures wasfirstly fixed
intheState budget in1989.
Theinstitution thatcarried outallpayment operations onexport-import wasForeign -Trade
Bank oftheUSSR thataccordingly totheResolution No.991 wasgiven therighttocredit associations
organizations withhardcurrency todevelop export production.
Liberalization offoreign trade fellto1988 (theResolution No.1405) where allenterprises,
associations,co-operativesandotherentitiesweregiventherighttoexport-importoperations(Resolution
No.1405, par.2).
Itwasordered totheministries concerned toworkoutandtoimplement thesystem ofnon-tariff
measures beginning 1January 1989 anditwasprescribed totransfer some oftheunion republics to
"fullcurrency selfrecompensation" (itmeant some kindofindependence inforeign trade) (par.6 of
Resolution No.1405). Thecomplex ofmeasures forexport promoting wasfirstly determined:
- extra charges tothecurrency rate(socalled "export encouragement") (par.12);
- a70percentdeduction tothecurrency funds fromcurrency proceeds (itconcerns all
entities ofStateagro-industry complex oftheUSSR engaged inexport -import )(par.24
oftheResolution No.1405).
TheMinistry ofForeign-Economy Relations oftheUSSR wasentitled tolicense export-import
operations andapply quotas onsome goods, services fromseparate countries foradefinite period of
time(Resolution No.1405, para.5).
Theissueofforeign tradewasfurther developed in1989(Resolution No.203). Theministries
related were ordered toestablish andtoenforce thesystem ofstatistic offoreign economy activities
intheUSSR beginning 1989. Soitmeans thattillthisyearthere wasnotanystatistical system onthis
issue.
In1989-1990 authorized organizations carried outsome export -import operations ontheterms
oflicensing. Thelistofexported goods (works, services) subject licences in1989-1990included amongWT/ACC/UKR/12/Rev.1
Page8
other goods thefollowing agricultural products: grain, meal, feedconcentrate, oilseeds, vegetable
oil.Besides, theResolution No.203 established thesystem ofquotas onquantity andvalue, asthe
measures ofrestrictions. Since 1989 tillcollapse oftheUSSR alltheresolutions onexport-import
contained listofquotas andgoods (works, services) subject licences.
Thus :
(a) theStaterejected fromthefullStatemonopoly onforeign tradeandgradually (beginning 1986)
endowed withtheright toexport-import operations thesocalled authorized enterprises
organizations ofministries (notonlywithin theframework oftheMinistry ofForeign Trade);
(b) astheresult, theauthorities concerned began toestablish thesystem regulating foreign trade
activity ofauthorized enterprises ;
(c) theministries concerned began toformthesystem ofnon-tariff measures (thetariff measures
wereactive since 1922 when thefirstCustom Tariff oftheUSSR wasadopted; in1986 was
active thesixth Custom Tariff of1981.);
(d) therepublics werenotactive participants offoreign economy trade. Alloperations werecarried
outthrough theunion ministerial authorized institutions till1988;
(e) since 1988 therightofallentities toexport -import operations wasdeclared.
4. International trade andtrade policy
Trade inagricultural production plays animportant roleintheeconomy ofUkraine.
IfintheformerUSSRUkraineannuallyexportedmorethan2ml.tofsugar,tothe400thousandt
ofmeat, 90thousand tofthebutter, over500ml.eggs, 500thousand tofvegetables, 700thousand t
ofpotato, 200thousand tofthemelon-plots, 40thousand tofgrapes, etc,thanin1994 volumes of
theexport reduced in2-5times andcame inmeat to150thousand t,inbutter -60thousand t,
egg-products -130ml.eggs, sugar -over1.2mln.t.
Inconnectionwiththeabsenceofthestablemonetarysystemabout70percentoftheagricultural
production in1994 were exported bythebarter.
Main tradepartners ofUkraine arestillcountries ofCISandBaltic Countries intowhich about
75percentoftheagricultural production andfoodproducts areexported.
Upto1991trade wascarried outbytheStatetrade enterprises andtheprivate sector wasnot
involved intotheinternational trade. From thebeginning ofthereforms of1991 private sector was
involved intotrade andconquered quite good market niches. Forinstance share oftheprivate sector
inthetrade inmeans ofplant'sprotection comes to90percent.
Within theframework oftheMinistry ofAgriculture atthepresent period twoState trade
enterprisesareleftwhichprivatizationisplannedtobefulfilleduntil2000and93wholesalegreengrocery
complexes which, according totheprivprogramme programme, aretobereformed in1996.
Realpossibilities oftheexport potential increasing theagroindustrial production arefulfilled
duetotheaugmentation ofproduction andsaleforexport ofthegrain, sugar, oil,greengrocers, meat
andmilkproduction, seeds oftheagricultural crops andblood-stock, spirit, alcohol drinks. Volumes
oftheexport shipment willtotalfrom 8-10in1996 to15-18 percentin1999 ofthevolumes ofWT/ACC/UKR/12/Rev.1
Page9
agricultural production. Itwillgivepossibility tothegoods producers toearnmoney forpurchasing
productive resources. Share oftheexport ofthemain types ofproduction from itsgross production
in1999 willcome to:grain -upto19percent, seeds ofgrain andleguminous -4percent, sugar
-55percent, oil-35percentandbutter upto25percent. Theexport oftheblood-stock willbe
reestablished especially intotheCIScountries (annex).
Forestablishing organizational, economic andlegal conditions oftheexport activity goods
producers willusefollowing measures:
- introduction ofthetariff regulation oftheproduction export andelimination ofthe
export quotas andlicenses;
- increase ofthecustoms dutyratesattheimport oftheagricultural products produced
inUkraine;
- establishingoftheduty-freeregimefortheimportofgoodsandresourcesoftheessential
import fortheneeds ofthegoods producers.
Under thisconditions, when stimulating increase oftheproduction oftheexport products,
volumes oftheproduction in4-5years, without extension oftheacreage under crops ofthesugar beets
(1.6-1.7 m.ha), should beincreased export ofthefollowing units :sugar uptothe5m.t,oil-upto
the0.8m.t. Duetothisproducts 'export expenses State needs intheimport supply ofgascanbe
covered.
5. Further reforms intheagricultural sector
Takingintoconsiderationrealconditions,establishedintheagroindustrialcomplex,government
willgrant urgent attention andfulfil support:
- social andeconomic changes inthecountryside, firstofallintheareaofland
ownership,meansofproduction,creationofthediversifiedeconomywithvariousforms
ofeconomy management;
- development ofthegrain production, sugar beets, oilcrops, meatandmilk, products
ofthechildren 'snourishment which provide foodsecurity oftheStateandformexport
potential;
- development ofthewrapping industry, packing, storage andlocalprocessing ofthe
agricultural production;
- formation ofthestrong material andtechnic base, producing inthesufficient amount
ofthetechnological machinery andequipment complexes fortheagriculture, mineral
fertilizers,pesticidesandothertypesofthechemicalproductionintheessentialamounts;
- developmentoftheselection,seedgrowing,nurserygardening,stock-breeding,measures
onreproduction ofthesoilfertility, melioration andlandprotection, protection ofthe
plants andanimals;
- reducing resource andenergy capaciousness oftheagroindustrial production dueto
exploration ofthewaste-free resource- andanergy-preserving technologies, renewal
oftheproductive capacity ofthesectors, changes inthestructure ofthecapital funds
andmeans ofproduction;WT/ACC/UKR/12/Rev.1
Page10
- improvement ofthereclamation fundusage;
- development oftherawmaterial baseoftheocean andmarine craft, augmentation of
theproduction ofthefish-products within inland waters;
- augmentation ofthewood rawmaterials andnature protective potential oftheforest
fund, itsrational usage;
- social development ofthevillage, especially intheregions ofthedemographic crisis
andfirstofalldevelopment ofthenetwork ofgas-andwaterworks, communications,
roads,educationalandhealthprotectionestablishments,houseconstructinginthelabour
insufficient villages withthegradual transition ofallexpenses ofthegoods producers
tothesocial area, atthelocalbudgets.
5.1. Basic parameters oftheagroindustrial production development
Forsatisfying Stateneeds inthefoodresources in1999itisnecessary thatitshould beproduced
43m.tofgrain, 36m.tofthesugar beets (byexamination weight), 2.85m.tofthesunflower 'sseeds,
4.1m.tofthemeat (byalive weight), 19.3m.tofmilkand10.4bl.eggs. Production oftheflour
should be5.0m.t,sugar -4.0-4.5 m.t,oil-700thousand t,foodfishproduction -350thousand t.
Prognosticated volumes ofproduction willsatisfy consumption perheadinbread production
atthelevelof142kg,meatandmeatproducts -43kg,milkandmilkproducts -276kg,eggsand
eggproducts 189eggs, sugar -39kgandoil-upto8kg,fishproducts -5.6kg(annex 2).Forthe
augmentation ofthewood rawmaterials andnature protective potential itwillbecreated upto1999
52-56 thousand haofthenewforests, received annually from theattendance hewing 4.2-4.4 m3.
5.2. Conditions andways ofachieving ofthedetermined parameters
Forachieving ofthedetermined basic parameters inthedevelopment oftheagroindustrial
production inthecountry following essential social andeconomic conditions areestablished:
- fulfilling ofthestructural reconstruction ofthenational economy withorientation at
theguarantee ofthepriority development ofthesectors oftheagroindustrial complexes
andmore complete usage ofthepotential;
- maintenance oftheparity intheintersectoral exchange attheindustrial andagricultural
production;
- speeded updevelopment ofthesafekeeping, processing andselling baseofthe
agricultural production andfirstofallinthecountryside;
- State support, protectionism oftheagricultural andforestry production;
- effective credit system considering specific conditions oftheagroindustrial production;
- national baseoftheresource industry intheagroindustry, slackening oftheimport
dependence onother countries;
- network oftheproductive andfinancial infrastructure, adequate tothemarket economy
levelofdevelopment;WT/ACC/UKR/12/Rev.1
Page11
- gradual transformation forthebudget financing ofthesocial infrastructure oftherural
population;
- improvement ofthesystem ofcadres andscientific provision oftheagroindustrial
complex development.
Fulfilment ofstipulated conditions iscarried outby:
- restructuring oftheagricultural production andother sectors oftheagroindustrial
complex, forming reallandowner, means andresults ofwork, developing diversified
structure oftheeconomy management;
- scientifically grounded regional allocation oftheagricultural production, capacities
producing foodproducts andterritorial division oflabour;
- deepening oftheinternal farms 'commodity-money relations andimprovement ofthe
inter-farms commodity-money relations;
- increase ofthespecific weight oftheexport products production andextension ofthe
foreign markets;
- organizing markets oftheagricultural production ontheproduct subcomplexes ofthe
agroindustrial complex.
5.3. Material andfinancial needs forachieving prognosticated indices
Achievement oftheprognosticated indices ispossible onlyifenterprises oftheagroindustrial
complex havenecessary material, technical andfinance resources.
Forthefulfilment oftheprogramme in1999 needoftheagricultural goods producers will
come to:49thousand tractors, 9thousand ofthegrain-harvesting combines, 28thousand automobiles
which costwillcome to168.2 trillion karb. Annual needoftheagroindustrial complex intheautomobile
gasoline willcome to3228 thousand t,diesel fuel-5042 thousand tand320thousand tofthegrease
oilandlubricants atthetotalsum285.4 trillion karb. Besides this1300thousand tofthecoalisneeded,
5100 m.cumofthenatural gas,19.4trillion kw/h oftheenergy.
Total minimum costofthematerial andtechnical resources fortheguarantee ofthefulfilment
oftheprognosticated production volumes willcome to881.4 trillion karb. or$5364.2 m.
5.4. Factors andmechanisms ofguarantee andpractical fulfilment oftheprogramme
Practicalfulfilmentoftheprogrammeiscarriedoutbyconductinglandandeconomicreforming,
effective price, purchase, financial andcredit, social, foreign economic policy intheagrarian area
andalsodevelopment oftheinfrastructure andimprovement ofthematerial andtechnical, scientific,
resource andcadres provision oftheagroindustrial production.
Land reform willbefulfilled inthefollowing directions:
- carrying outevaluation ofthelands anditsinclusion intothecirculation oftheagrarian
capital;WT/ACC/UKR/12/Rev.1
Page12
- assignation ofthelandintothecollective ownership oftheagricultural enterprises,
itssharing andcertification ofthelandshares;
- introduction oftheregistration system atthemovement ofrights oflegalandnatural
persons atthelandplots andshares;
- establishment ofthelandinnovation fund andassets 'usage attheneeds ofland
protection;
- guaranteeing oftheStatecontrol overthelands'usage andprotection, responsibility
oftheowners andusers ofthelandplotsforthecondition ofitsprotection andusage.
Economic reform willbeaimed at:
- guaranteeingequaldevelopmentconditionsfordifferentformsoftheeconomicstructures
ofthemarket type(economic associations, corporations, cooperatives, peasant 's
(farmer 's)andpersonal subsidiary economies, etc.);
- creation oftheinfrastructural network fortheservice oftheagrarian sector atthe
private, intereconomies andcooperative bases bythegoods producers using leasing
condition oftheservice provision;
- creation oftheinfrastructural network forthepurchase atthepopulation oftheinitial
processing, storage, packing andtransportation oftheproduction;
- reforming oftheownership relations intheagroindustrial complex bytransforming
processing andagroservice enterprises intotheopen joint-stock associations with
participation oftheagricultural goods producers, andState agricultural enterprises -
intothecollective agricultural enterprises oropenjoint-stock associations.
Price policy intheagrarian sector iscarried outonprinciple ofcombination ofthefreeand
State-regulated pricing.
Mechanism ofthefree(exchange) pricing willbeprincipal, State-regulated pricing isadditional.
Forsatisfying State needs (satisfying special users, establishing State reserve) system ofthe
Statecontracting ofthepartoftheagricultural production ismaintained. Therestoftheproduction
issoldviatheexchange andcontract system bythedirect contracts orinadifferent way.
When purchasing grains, sunflowers, sugar beets, milk, cattle formeatState support ofthe
profits oftheagricultural goods producers isfulfilled byregulating market prices influencing their
supply anddemand withthepurpose ofguarantee oftheessential price parity attheagricultural
production.
Saleofvegetables, potato, melon-growing, fruit, berry andother types ofproduction byfree
prices which areformed atthemarket influenced bysupply anddemand.
Agricultural commodity producers through thepurchasing policy willbeprovided forthefree
choice ofalltypes ofownership oftheproductive activity directions, channels oftheproducts
distribution, forms andwaysofitssale,conclusion ofthecontract, protection ofthedomestic markets,
regulation ofthemarket ofthemost important types oftheagricultural production.WT/ACC/UKR/12/Rev.1
Page13
Payment inadvance bytheprovision organization totheagricultural producers ofthecontract
production willbefurther done.
Infrastructure oftheproduction purchase (contract companies, exchanges, broker agencies,
wholesale fairs, auctions, trade houses) willdevelop andimprove. They areresponsible forprovision
ofthecommodity producers withinformation onprices, demand andsupply atthedomestic andforeign
salesmarket,registrationofthecontracts,elaborationofthetraderulesandmodalcontracts,organization
oftrades, auctions, fairsandexhibitions.
Organization oftheagricultural production markets isbased onthecombination ofthedifferent
organizational forms, market directions andeconomic conditions ofthesaleofproducts. Basic principles
fortheorganization ofsuchmarkets are:
- freemovement anddistribution oftheproducts;
- organization ofthebigwholesale markets, fairsandmedium wholesale andretailtrade,
andretail markets;
- creatingofdiversifiednetworkoftheindependent(non-monopolized)wholesalemarkets,
agrarian exchanges, rural trade houses, wholesale andretail market storage;
- freeprices atallmarket stages;
- organizational andeconomic integration oftheparticipants ofproduction, processing
andsaleofproducts;
- influence oftheStateonthelevelofsupply anddemand andonprices viaspecial body
which perform intervention, agency orpurchase andsaleofproducts.
Financial andcredit policy willbefulfilled taking intoaccount specific features ofthe
agroindustrial production.
TheGovernment proceeds from thenecessity of:
- financial support ofthedevelopment ofpedigree breeding, veterinary science, seed
growing, seedling growing, agricultural machine-building, reclamation andecology,
landandenvironmental protection, child'sfoodproduction, social sphere development
inthecountryside;
- guarantee ofeconomic stimulation oftheinvestments oftheagricultural commodity
producers andother investors including foreign onesforforming production baseand
social infrastructure;
- improvement ofthetaxation system inagroindustrial complex, usage oflandtaxfunds
forprotection andrational usage oflands;
- theseasonal gapexpenditures andincomes crediting;
- attraction ofinternational credits forhightechnology, structure changing andmarket
formingdirections:agriculturalmachine-building,agroservice,processinginfrastructure
especially intheplaces ofproduction oftheagricultural products;WT/ACC/UKR/12/Rev.1
Page14
- assistance increation offinancial andagroindustrial groups withparticipation offoreign
capital especially intheareaofinfrastructural service ofagricultural complex andgiving
priority (orexclusive) rightforunlimited direct investments (capitalization ofincomes)
ofbanks,insurancecompaniesandotherfinancialmediatorsintoagroindustrialcomplex
andsocial sphere ofthevillage;
- improvement ofthesystem ofinsurance protection oftheagricultural enterprises,
speeding upoftheprocess ofsecurities market formation intheagrarian sector;
- formation ofthediversified network ofthefinancial infrastructure inthecountryside
byestablishing joint-stock andcommercial land, rural, mortgage banks andinsurance
stock andshare companies;
- provision ofgradual transition fromthebarter exchange under giveandtakeconditions
tocommodity-money settlements.
Material andtechnical provision willbefulfilled according tothevolumes ofproduction of
theagroindustrial products onquantitative andqualitative indexes onindicative basis(bytherequests
ofthecommodity producers).
With thispurpose sector ofthedomestic agricultural andforestry machine building willbe
formed, Statemanagement bodies willbecreated forcoordination oftheeconomic interests ofindustry
andconsumers ofagricultural forestry equipment.
Material andtechnical provision oftheenterprises ofagroindustrial complex isfulfilled by:
- wideapplication ofthelong-term rent(leasing) andpurchase ofagricultural machinery
bythedirect connections;
- attraction oftheforeign investments forestablishing joint-ventures forproducing
complicated machinery andhightechnological equipment;
- fulfilment oftheNational programme ofproducing technological machinery and
equipment foragriculture, foodandprocessing industry;
- establishment oftheself-supporting machinery andtechnical stations, hiring stations
andother agroservice structures;
- creation ofspecialized production andtare-packing materials forfoodcommodities;
- guarantee ofthepriority development ofthedomestic production ofthemineral
fertilizers, especially phosphoric, means ofplants 'andanimals 'protection including
attraction offoreign investors, import substitutes forthesectors offoodindustry, etc.
Social policy concerning countryside isaimed at:
- equation oftheagricultural workers 'incomes uptotheleveloftheindustrial workers '
incomes;
- development ofthemodern everyday, social, cultural andmedical service ofthe
population andalsosocial security, education andculture, trade andpublic nutrition;WT/ACC/UKR/12/Rev.1
Page15
- creation oftheadditional jobsattheexpense ofdeveloping productive andagroservice
infrastructure ofthevillage, subsidiary enterprises andcrafts, increase ofagricultural
products processing inthecountryside;
- guarantee oftheyoung country population employment intheproductive andsocial
sphere ofcountryside, improvement oftheirprofessional knowledge andprofessional
orientation.
Statesupportoftheagrariansciencewillbeguaranteedwithannualallocationforitsdevelopment
ofnotlessthan18percentofthebudget funds intended forthescience onthewhole; priority realization
ofthespecialprogrammes(Agroprodcomplex;Processingoftheagriculturalrawmaterialsandproduction
ofthefoodproducts, Tareandpackage forfoodproducts).
Forfinancing scientific research special non-budget assets andfunds ofthedevelopment of
thecommodity producers 'science andtechnic willbeused.
State system ofmastering andspreading ofthescientific andtechnical achievements with
appropriate network oftheorganizational structures inoblasts andregions willbecreated. TheBank
ofscientific andtechnical researches isformed, theirwidepractical usage isorganized. Market structures
ofpropaganda andmastering ofscientific andtechnical progress achievements develop viatheinnovation
centres, exchanges ofscientific products, exhibitions-auctions, exhibitions-fairs, experimental scientific
bases, production andscientific production systems, etc.