A single state grain operator to be established in Ukraine

Yesterday, Premier Yulia Tymoshenko announced that DAK Khlib Ukrainy and Agrofund would be merged to form a single state grain operator. This should help Khlib Ukrainy (literally, Grain of Ukraine) to improve its financial position, while Agrofund will be able to reduce the cost of storing grain.

Appearing before officials from the Ministry of Agricultural Policy and the top agricultural producers, Premier Yulia Tymoshenko announced yesterday that the Government would be merging the state joint stock company (DAK) Khlib Ukrainy and the Agrarian Fund (AF) shortly. “We will provide the infrastructure and will trade like everybody else,” the Premier stated.

The new state enterprise is expected to sell grain for export and to influence domestic pricing policy. The Cabinet of Ministers has already carried out preparations for the merger of the two state operators.

In addition, said the Premier, in Q1’10 the Government would initiate the start-up of an agricultural bank in order to improve borrowing conditions in the farm sector. She also promised to pay “in full” the UAH 11bn allocated in support of the farm sector in the 2009 State Budget.

Should the two state enterprises be merged, AF will gain its own elevator capacities, says Viktor Bondarenko, a former manager of Khlib Ukrainy. “Storing grain will cost the Fund about 10-12% less than it does now, when the company has to lease storage capacity.”

Khlib Ukrainy, on the other hand, will gain access to funding from the State Budget should the merger go ahead, funding that it currently has very little of, say officials at the Agricultural Policy Ministry.

Tags: grain, agriculture