A method has been found for distributing agricultural subsidies so that they do not go to agroholdings

Submitted by bashun on Wed, 10/25/2017 - 11:00

The scheme of distribution of subsidies in 2017 discredited itself, since the bulk of them receive large holdings, and livestock and livestock production declined.

This is written by the deputy director of the Ukrainian Industry Enterprise Serhii Povazhniuk in his blog on " Ekonomichna pravda”.

It bears reminding that agrarians can change the formula for calculating subsidies.

According to Povazhniuk, small and medium-sized producers cut livestock because of unprofitableness, and dairies and meat-packing plants, due to a shortage of raw materials, buy it for 200-300 km.

Therefore, the expert believes that the distribution mechanism should be changed and proposes the following principles for 2018:

"Subsidies should be used to reduce the cost of investments in fixed assets, primarily for small and medium-sized producers who do not have access to cheap loans from Western banks." Farmers can still form working capital, but they are not lending to domestic banks on the bondage terms they offer under force, "- leads the first remark Povazhniuk.

Secondly, he considers it necessary to subsidize dairy and beef cattle breeding, pig farming, hothouse farming, gardening, primarily small and medium-sized farms. Since the sector due to high investment load and long production cycle, two to four years, is usually unprofitable - due to the lack of long-term loans and high rates.

"Crop production in Ukraine is highly profitable, profitability is 35-50%, and for some crops it exceeds 90%, it does not need subsidies, and profitable intensive poultry farming, taking into account the short production cycle - up to three months, should be tied to the amounts sold or delivered processing of milk and meat with an adjustment to their quality, "- says the deputy director.

According to him, compensation for part of the cost of agricultural machinery of domestic production should be applied to technology with a high level of real localization (more than 45%) and exported, which indicates its competitiveness with foreign counterparts.

"The development of livestock, horticulture and hothouse economy will create jobs, will promote the development of the processing industry and increase the export potential of agricultural products with higher added value," concludes Serhii Povazhniuk.

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