OLEG PROTSENKO: WE WENT TO FARMERS WITH A CERTAIN LIST OF REFORM PROPOSALS, BUT RETURNED WITH COMPLETELY DIFFERENT ONE

OLEG PROTSENKO: WE WENT TO FARMERS WITH A CERTAIN LIST OF REFORM PROPOSALS, BUT RETURNED WITH COMPLETELY DIFFERENT ONE

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The idea of closer communication with active stakeholders of reforms in regions proves its efficiency by different examples - from healthcare to public procurement.

Recently this idea was adopted by participants of agriculture reform Task Team, who left their Kiev offices, and were the first in agriculture sector who went to talk to farmers in regions. Previously this approach was never practiced. Oleg Protsenko, Project Manager of the reform in agriculture sector of the National Reform Council, shares the first results of the dialogue with farmers.

- What is the main point of the initiative on trips to regions?

We decided to go to regions, and not just to meet the farmers, but to improve communication between central government and business. Our meetings were attended by representatives of the Ministry of Agrarian Policy and relevant departments of regional administrations. In general, the arrival of the government officials in the delegation is very positively perceived by farmers. It gives them direct access and open discussion of the problems that hinder business development, expansion to new markets and increase of export potential. Previously, such events happened very rarely. Government used to make a decision by its own and then impose it without asking any opinion of regions and, especially, the one of business itself. And this is fundamentally wrong, as in fact business is the end user of all changes.

- Farmers from which business segments are invited to these round tables?

We invite representatives of small and medium agribusiness for the event. Why them? Because big agricultural holdings have already learned to find common language with the government authorities and they know how to lobby necessary decisions at all levels. And this is what doesn’t work in case of middle segment.

Besides, I want to dispel the myth that the Ukrainian agricultural business lies on shoulders of a few large players. Our statistics shows that share distribution of large enterprises to small and medium group of about 30 to 70. And small enterprises are the ones that need a reform.

If we look at sectoral distribution, we met representatives of a wide range of spheres, from fisheries to meat and sugar industry.

- What interests farmers most of all?

Mainly they are concerned about two global issues: funding and deregulation. Unfortunately, the first depends on the objective reasons due to lack of budget. And in this case the reform should be focused on a fast distribution of agricultural receipts tool, as an alternative to direct subsidies. If we talk about deregulation, a lot has already been done. But mainly for large business. For example, we cancelled the compulsory quarantine certificate. Because before that in order to transport the grain between the regions it was necessary to obtain a quarantine certificate each time. We have also abolished the licensing for import of plant protection products and introduced a number of other initiatives, which were lobbied very actively by representatives of ACC and EBA.

Round tables were held in 10 regions of Ukraine, including Kherson, Mykolaiv, Poltava, Kiev, Kharkov, Odessa, Vinnitsa, Chernigov, Zaporozhye, Cherkassy.

There is a number of painful issues for farmers such as obtaining various permits, permanent corruption contact with the controlling authorities, taxation and issues with transparent procedure of registration of land lease. Here is an example with a permit on water usage. If the water intake is up to 300 cubic meters per day – the permit for special water usage is not needed. And if the intake is more farmers need to obtain special permission. Due to the over-regulated procedure, farmers simply can not solve the problem with fields irrigation, as this amount is obviously not enough even for small enterprises. For a good harvest and yield in southern regions it is needed about 1000 cubic meters of water per hectare. As a result, farmers of southern regions whose business is vegetable growing and who need a heavy watering, are forced either to use water illegally or to buy it from those who have obtained such a permission. This situation jeopardizes small and medium farmers, who do not have sufficient means to address this issue.

- How do farmers see (if they do) the land reform?

Land reform in Ukraine has already been held for more than 20 years. I should admit that before there was discussion only about a possibility of canceling moratorium for sale of agricultural land. Today, the debate has shifted to a practical level of elaboration of the road map for gradual transition to an open land market. Also, the Ministry of Agrarian Policy has implemented a number of measures on land reform, particularly in simplification of the conclusion and registration of land lease agreements. This had a positive feedback from representatives of business. But if we talk about a free and open land market, then the only interested players are owners of land shares. For a large or even medium business reform will lead to an increase in land lease cost and tough control over soil quality by land shares owners and as a consequence it will reduce corporate profits. But there is one big advantage which is not widely discussed in Kiev. During our discussion in regions it was pointed out that creation of free land market will allow a countryman to attract investments and start farming business, instead of desperately let his land share for the rental price proposed but not for a market one. This will not only promote the development of small farming, but also increase the attractiveness of staying and living in villages, instead of leaving them to work in the city. We need to talk more about this advantage.

- Which regions have you managed to visit?

Round tables were held in 10 regions of Ukraine, including  Kherson, Mykolaiv, Poltava, Kiev, Kharkov, Odessa, Vinnitsa, Chernigov, Zaporozhye, Cherkassy. Visits these regions allowed to understand the general situation around Ukraine in the issues of which real farmers are now concerned. We have consolidated about 100 issues, which require solutions for farmers.

- What are the next steps that you plan to take according to the results of meetings in regions?

Our plan is as follows. We plan to systemize all collected materials and to make them available for public discussion with all stakeholders. Assess how these decisions will match with the strategy of development of the agricultural sector, successful international experience and fundamental documents, for example, the Strategy 2020. After the discussion the draft laws, decrees and orders will be elaborated for a comprehensive deregulation in the agricultural sector, which will simplify the management of agricultural businesses and improve the export potential.

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Маркович Галина Богданівна - координатор напрямку місцеві бюджети Проектного офісу секторальної децентралізації
19 December 2016
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