Agriculture Minister Taras Kutoviy puts focus on small farms
Taras Kutoviy, Ukraine’s new agriculture minister, says he will be a champion for small farmers in a country where big agroholdings dominate. By contrast, predecessor Oleksiy Pavlenko devoted much of his time to promoting larger agribusinesses.
“Saying every year: ‘We are the champions, we have 50-60 million tons of grain, we exported 35 million’ – yes, this is very good, but it’s not the only way,” Kutoviy told the Kyiv Post in a May 14 interview.
Instead, he points to countries like Denmark, in which 2.6 million hectares of farmland produces €24 billion worth of crops, compared to the €12.5 billion produced by Ukraine’s 26 million hectares. “They have 10 times less land, but they make twice the money,” Kutoviy said. “So this is the way the agricultural sector should go.”
And he is confident that his “3+5 strategy,” as he calls it, will move Ukraine in that direction. The “3” refers to three strategic areas: allowing sale of land, increasing state support to help small enterprises and rural development. The “5” refers to development priorities: new markets, niche produce such as organics, state enterprises, irrigation and food quality.
State funding for SMES
Kutoviy wants to increase state grants for small farmers for equipment and other needs. Today, the ministry has Hr 15.6 million earmarked for this. He wants it hiked to Hr 200 million this year and “substantially bigger” in 2017, Kutoviy says.
Ultimately, the budget increases depend on the Finance Ministry.
In the past, most state support benefitted large agroholdings, Kutoviy says.
Farmers must decide
One way to do this is to change the way the money is distributed and let farmers decide how to spend it.
“I want farmers’ associations to decide how they will distribute this money,” Kutoviy said. “It could be ( purchase of) a cold warehouse for vegetables, grain wagons – anything that they can decide for themselves,” Kutoviy said.
Land sale moratorium
An even more important issue for farmers might be the cancellation of the moratori- um on the sale of land. It has been one of the sources of controversy for the ministry since the ban was put in place in 2004.
The International Monetary Fund and other financial institutions are keen for the moratorium to be lifted. They say this will allow farmers to use their land as collateral to access bank loans. In turn, this will create a major new asset class for Ukraine.
But others argue that, without an effective judicial system, lifting the ban will only have negative effects.
Daniel Sweere, an American farmer who has been in Ukraine since the 1990s, said that without a proper court system, the banks still wouldn't necessarily be able to recover assets in the event of default. Moreover, Ukraine's lack of
Taras Kutoviy, who took over as agriculture minister on April 14, says that helping small farms will be his priority.