International financial institutions and investment funds, bankers, investors, innovative companies, representatives of Ukrainian government and farmers get together to find a way out of the difficult economic situation in agribusiness of Ukraine during Agri Invest Forum. The uniqueness of the situation is that as a country, as well as business today, demands an extremely effective anti-crisis decisions, which would allow to overcome the war and to make economy of Ukraine strong. Although it seems impossible, but the forum gathered the ones who turn the impossible into reality!
Organizers of the event - PU "Ukrainian Agrarian Council" and Ukrainian Agri Investment Council, supported by the EBRD and project USAID AgroInvest, took care for more than 600 participants: owners, CEOs and CFOs of companies and agricultural holdings, had the opportunity to talk with experts and investors, and to obtain unique information about:
- Financial instruments;
- Technological innovations;
- Export opportunities;
- Agrarian receipts, ideas and legal advice.
Andriy Dykun opened the event, President of the Association of Milk Producers. Most of the discussion has caused by financial and economic blocs.
The representative of the Ministry of Agrarian Policy and Food of Ukraine, Deputy Minister, Yaroslav Krasnopolskiy talked about the prospects of cancellation of 14 permissions and 6 licenses. He also noted that the state can not effectively manage state-owned enterprises. We show up the schemes in Ukrspirt and State Food and Grain Corporation that caused damage for more than 9 billion hryvnias. That is why the idea to privatize state-owned enterprises is beneficial for the country - a private business is more efficient.
Leonid Kozachenko, MP, Chairman of the “Agrarian Association” in Verkhovna Rada stated:
"Ukraine has the potential to export 120 million tons of grain. To do this for a decade, we need investment in the amount of nearly 70 billion dollars. Its quite a bit. Especially considering that 150 billion are investing in the agricultural sector every year in the world. I think that such funding can provide the International Finance Corporation (IFC). Subsequently, Ukraine can take second place in the world in the export of grain. Therefore I appeal to the international financial institutions to finance those who are in this hall - Ukrainian agrarians".
Agri Invest Forum was attended by about 100 representatives of the financial and investment sector - representatives of financial institutions and international funds such as the EBRD, IFC, World Bank, KfW, SigmaBleyzer, Danish Investment Fund for Developing Countries (IFU), Horizon Capital, Western NIS Enterprise Fund, international donors - USAID project AgroInvest, FAO, German-Ukrainian agropolitical dialogue, project of the EU Twinning.
Olena Voloshyna, head of the International Finance Corporation (IFC) in Ukraine assured that even in difficult times, they continue to work.
"It’s not me to tell you that we have the war in the country, problems with the GDP. There are internal problems of the sector and increasing problems - access to financial instruments and access to new markets. There were already published the first 4 agricultural receipts in Poltava. We continue to work through the Ukrainian banks. Also continues funding of Myronivsky Hliboprodukt and Niva Pereyaslavschiny".
Viktor Ponomarenko, chairman of ProCredit Bank said that the banking sector in Ukraine is going through difficult times. The outflow of funds continues. The possibilities of the banking sector are limited. Only co-operation and mutual support can save the sector.
"If you know that the next sowing will need funds, it is necessary to carry out the work already today. It is necessary to plan, we must act. We work with small and medium-size business. We have an understanding that the agribusiness in the future - is an important segment of the overall economy of Ukraine in the future. And working today, tomorrow or the day after, we will grow together with agribusiness".
Sharp point was the failure of returning of the VAT and tax issues. Olena Makeeva, Deputy Minister of Finance of Ukraine.
"We believe that the agricultural sector has become one of the most profitable sectors of the Ukrainian economy, so since January 2016 we will extend the application of the general VAT regime for the entire agricultural sector according to the international practice.
We try to balance and to listen to the business, we understand that today you need support, because we are in a difficult situation, so the Ministry of Finance has introduced a communication policy, where we are trying to collect all the ideas and hear each industry.
We have conducted an industrial platform with your industry on which we have discussed today’s problems of the industry and what is a constraint for the development of the industry, and what we can do together today. I want to note that this information is public, you can read it on the website of the Ministry of Finance of Ukraine. We have come to the conclusion that today we need to offer companies to apply the general tax regime with a mandatory right to a refund on exports to the manufacturer and the first intermediary.
If we give that right for companies to move to general taxation, so till the end of the year well see if there is demand for the overall system, how many companies have moved and for which companies this whole system is more attractive, more effective than the special VAT regime.
Certainly, it is necessary to work on the administration of VAT and try to resolve as quickly as possible all the problems with VAT refunds, and then the total tax system will be attractive to your sector".
Mykhailo Sokolov, Deputy Chairman of PU "Ukrainian Agrarian Council" on Public Affairs spoke about the issues of non-repayment of VAT, law 2527 "Draft Law on Amendments to the Tax Code of Ukraine on the establishment of fair conditions for the sale of agricultural products and support for direct agricultural producers".
Representatives of European investment companies and committees voiced their wishes. In the first place they want to see clear steps in the directions:
- The settlement of the situation in the country
- The adoption of effective legislation
- Economic reform
Gilles Mettetal, chairman of the EBRD Agribusiness
"Ukrainian companies have the potential to attract investments. When we ask what you need to attract investment the first thing we hear is stability, understanding what will happen in the next few months, and sometimes even days. Investors discouraged a large number of the fiscal authorities and the unclear situation with the lease of the land.
In Ukraine, there are many projects that can be implemented in the agricultural sector of Ukraine, which has fertile soil, excellent climate conditions, compared with other countries.
Today in Ukraine there are the best opportunities for investment. My previous boss once said: "Do not miss a good crisis". We have seen many crises in the past 20 years and only the best were able to succeed. For me, this statement is fundamental, therefore we invest now in the agricultural sector of Ukraine and we will go on and on".
The same hope was expressed by Nicolas Verlet, a member of the European delegation of the Directorate General for Agriculture of the European Commission:
"I share the point of view of Gilles Mettetal, who said that now is the time when we need to combine the efforts of all market participants, from professional organizations, government, private sector, and international donors in order to form the strategy for development of the industry, which is recognized and adopted by the Ukrainian government.
Donors and international financial institutions expect reforms in Ukraine. So we started the project with the Ministry of Agrarian Policy and Food of Ukraine, the project for the implementation of the Single strategy for development of agriculture and rural areas in 2015-2020. Representatives of the Ukrainian government, international donors and financial institutions, specialized organizations in Ukraine have joined to the development.
The strategy aims not only for the development of perfectly written laws which is approximate to the EU legislation, but also their implementation in practice".
Congress of exporters “Ukrainian food 2015”, namely the section "Strategies of food exports" became one of the most interesting elements of Agri Invest Forum. The report on the export of Moldovan wine tore applause of Vasyle Tofan from the company Horizon Capital. He told how they made their way to Europe after the loss of the Russian market. Firstly they managed to conquer the market in Norway.
Agri Invest Forum participants noted that the practical ideas and knowledge will be useful for them.
Olena Vasylevich, representative of the company “Breeders”
"I think it was very interesting and useful event. It is good that in such difficult conditions representatives of government, business, and commercial companies are together. Thanks to the organizers. I think it is necessary to hold such events more often".
Andriy Talama, director of "Galychyna Zahid"
"I think that it is necessary to gather. There is no alternative. Producers have to meet with each other, the authorities and representatives of the financial sector. There are good representatives of the financial sector. I hope that the completion will be appropriat".
Maksym Kryvonis, organizer, PU "Ukrainian Agrarian Council"
"The purpose of the event - to make it practical for the target audience, after which representatives of medium and large agribusiness could bring practical knowledge and ideas that can be used throughout the year. To businesses become more efficient, reduce costs and attract funding, we have been invited to Agri Invest Forum representatives of international financial institutions, in order to open the agribusiness financing mechanisms due to European conditions.
I’d like to thank all the participants and speakers. We hope Agri Invest Forum continue to be the platform for government authorities and business, dialogue that helps to find effective solutions to the business".