Ukraine cuts direct support for livestock industry in 2015
In 2014 livestock industry funding amounted to UAH888m (US$57m), covering subsidy payments for selling agricultural animals for slaughter, partial reimbursement of the cost of construction of livestock farms and purchasing of breeding stock.
"The agricultural budget for 2015 will be the most miserable in recent years, due to a shortage of finances in the country," said Ukraine’s Deputy Prime Minister for Agrarian Affairs Ivan Miroshnichenko.
Industry experts claimed this step had been taken because the direct form of industry support was not proving effective. In 2015, they pointed out, the Ukrainian government will support meat producers via other mechanisms, including reform of the deregulation of the country’s meat market.
"To facilitate the work of [livestock] business, the Agricultural Ministry prepared a package of bills on the deregulation of the agricultural sector. It will cut the number of licences and simplify procedures to acquire quarantine certificates," said Alexei Pavlenko, Ukraine’s Minister of Agrarian Policy and Food. This will also be accompanied by the liquidation of one of the country’s watchdogs, State Agricultural Inspection.
"Our goal is a transparent, open and efficient operation of the ministry. Some agencies and departments will be liquidated or reorganised. State Agricultural Inspection will be liquidated," said Pavlenko.
According to experts from Ukrainian analytical agency APK-Inform, the positive economic effect for livestock businesses from deregulation reform could reach UAH10 billion (US$624m), which will prove substantial compensation for the absence of direct support for farmers in 2015.
In addition, Ukraine has decided not to impose a ban on indoor slaughter, which should have come into force on 1 January 2015. Experts pointed out that, during a year of turbulence in the country, sufficient infrastructure for the implementation of the law had not been created, with the result that a significant number of meat producers could go bankrupt or operate illegally if the measure came into force.
"Given that, today, in most villages there are no slaughterhouses that have operational permits and are registered by the veterinary service, we think that it advisable to postpone the ban for two years," said MP Sergei Caplin.
However, the ban on indoor slaughter was meant to improve the quality of production in Ukraine’s domestic market, which in turn would result in the development of exports. How deregulation reform and cancellation of the initiative to ban indoor slaughter will affect product quality on the market is still not clear.
