The FINANCIAL — Kyiv, May 16th, 2011 – The American Chamber of Commerce in Ukraine welcomes President Yanukovych’s decision to veto Law #8324.
This veto together with the recent decision of the Cabinet of Ministers of Ukraine to allow free exports of corn are the first steps bringing the Ukrainian agricultural export regime back towards free market principles.
Ukraine plays an important role on world food markets and has a unique opportunity to become a leader in production and processing of agricultural commodities. Since gaining independence much has been achieved in developing a free market oriented agricultural industry in Ukraine which in turn attracted considerable strategic investment.
Unfortunately, during most of marketing year 2010/2011 policies that would strengthen free market principles were stalled or even reversed. The export restrictions, quotas and the emergence of an operator with questionable ownership enjoying special state preferences have disrupted the market, reduced farmer’s income and generated considerable losses for trading companies.
Recent developments signal a positive change in approach by the Ukrainian leadership. However, it is necessary to point out that the export of wheat and barley is in practice still banned. The American Chamber of Commerce in Ukraine continues to urge the Cabinet of Ministers of Ukraine to release the remaining stocks of wheat and barley by allowing free exports, as is the case with corn, in order to open storage facilities for the new grain harvest and provide farmers with desperately needed financial resources to support the new production season, and provide the national budget with new revenues during these difficult financial times for the country.
The American Chamber of Commerce in Ukraine is convinced that free trade is the best policy for the development of a competitive agricultural sector in Ukraine. If the government of Ukraine considers it necessary to introduce export duties for wheat, barley and corn it is necessary that the duties are low not to curb agricultural production, that they are fair and paid by all exporters including state agents and international business, that they are restricted for one year and, most important, that they are introduced, changed or cancelled only with a minimum advance notice of two months.