Agriculture

Over the past five years the Ukrainian Government has achieved important successes in developing the agrarian sector of the economy. Land reform is being actively implemented, the competitive ability of agricultural produce is becoming ever higher, and now almost fully covers the Ukrainian domestic market, and the volumes of export deliveries are increasing. The assistance rendered by the World Bank since 1996 has given an appreciable impetus to the sector's development.

Completed Projects

Agriculture Sector Adjustment Loan - In 1996, the World Bank provided this loan for $US 300 million to implement key economic reforms in the agrarian sector. The project, completed in two years, helped to carry out land reforms, restructure agricultural enterprises, privatize and demonopolize agro-industrial enterprises, liberalize internal and external trade, and finance the country's critical import needs.

Seeds Development Project - This project, begun in 1995  was completed successfully in 2000. The World Bank loan was $US 32 million out of a total cost of $US 63.3 million. The project helped improve seed production and made it more competitive. In particular, efforts were made to broaden the activities of three private enterprises specializing in the production, processing and sale of domestic and imported hybrid seeds of maize, sunflower and sugar-beet. Financial and technical aid was given to improve the normative and legal basis of seed production, and a long-term strategy and programs in  agricultural studies were developed and put into effect. The Ukrainian Institute of Agroecology and Biotechnologies, which was given appreciable support, was involved in project implementation.

Projects under Implementation

Rural Land Titling and Cadastre Development Project - In June 2003, the World Bank approved the decision to extend a loan in the amount of $US 195 million for implementing this project.  In doing so, the World Bank supported land reform as a priority component of economic transformations that are taking place in the Ukrainian agrarian sector.

The activities envisaged under the project are aimed at a fair distribution of land plots among farmers, consolidating of their ownership rights to land by issuing respective state land titles on a free-of-charge basis, as well as the development of a land lease market, which is to contribute to improving the living standards of the rural population.

“This loan will provide financial resources which the government needs to carry out the state program of land reform, in particular, the issuing of state titles to land ownership in rural areas, and creating of an effective cadastre and a system of land title registration,” says Mr. Iain Shuker, project leader.

It is expected that the project implementation will contribute to increasing the number of profitable enterprises, strengthening the social protection of rural population and improving the environmental conditions.

The project will focus much attention to informing the population on the work carried out and the significance of land reform on the whole. Legal services will be provided for landholders. It is envisaged to conduct training of specialists on issues of reforming agricultural enterprises and issuance of state land titles, as well as of land-management specialists. This training will be organized by Ukrainian educational institutions. Furthermore, additional funds will be allocated to purchase required equipment for agrarian universities in the cities of Odesa, Lviv, Kharkiv and Kyiv.

Projects under Preparation

Rural Finance Project - This project is at a preparatory stage. Its total cost is yet to be determined, however, the World Bank’s contribution is already known – $US 200 million. The general objective of the project is to facilitate the development of effectively operating and competitive rural regions, and to improve the living standards of the rural population. This can be achieved by ensuring that farmers, collective agricultural enterprises, representatives of small and medium businesses, who work in rural areas, have the broadest possible access to financial services.

The project envisages the development of financial institutions and services for rural workers, increased supply of long-term capital in the rural economy, stimulating of the activities of financial intermediaries who serve rural clients, as well as elaboration and approval of legislative acts for creating a favorable political environment for rural financing.

At the first stage of project implementation, an efficient system of crediting agricultural producers and rendering leasing services to them will be, specifically, developed and microfinancing will be provided to expand the current network of rural branches of private intermediary banks. Subsequently, a second-level mortgage institution is planned to be established which will provide mortgage finance for rural areas. Currently, Ukrainian officials jointly with international consultants are elaborating comprehensive legislative reform which will make it possible to use various movable assets (equipment, movable property combined with real estate, receivables) to ensure financial operations.

Last updated July 2004