September 20, 2011

Ukrainian Grain Association supports customs duties cancellation

Ukrainian Grain Association supports grain exports customs duties to be cancelled immediately, according to the Association on September 19.

The Association said the cancellation will be the decisive step which will improve the investment and business climate in the agrarian sector of Ukraine.

In particular, Ukrainian Grain Association strongly disagrees with the mechanisms and techniques that the government uses to fill the state budget. The growth of Ukrainian economy, increasing investment activity, production and consumption of goods and services by businesses and citizens are the only conditions for increasing the revenue of the state budget, explained the Association.

However, the government is using the erroneous way of additional taxation of domestic agricultural producers and this is under the slogan of reducing tax burden on the economy of Ukraine.

In reality, agricultural producers are forced to pay export duties on wheat, barley and corn. Under these conditions, the global market and the world price do not change in the presence of the grain export duties.

Thus to date, Ukrainian agricultural producers who do not have enough money to buy technical equipment and construct elevators, lose UAH200-250 (US$25-31) per tonne due to imposition of the export duties, underlined the Association.

Besides, Ukrainian Grain Association noted that the dynamics of grain exports in July and August clearly confirmed the fallacy as exports were three times lower compared to previous years with Russia as the main competitor.

Wheat, barley and corn production were reduced as the profitability of grain production last year was the lowest in the plant growing industry.

These circumstances enable Ukrainian Grain Association to give disappointing forecasts for agriculture development without changing the authorities relation of the grain industry, emphasised the Ukrainian Grain Association.