24 February 2021
Ukrainian state-funded program for development of potato sector
A STATE-funded program for the development of industrial potato growing for 2021-2025 has been developed by the Institute of Agrarian Economics, in conjunction with the Ukrainian Association of Potato Producers, to aid the country's ailing potato industry.
The program will include the construction of 35 potato storage facilities in Ukraine with a total storage capacity of 158,600 tonnes, with 30% funding from the state.
Four of these, with a capacity of 41,000 tonnes, will be built in the Cherkasy region, eight storage facilities for 38,200 tonnes in Lviv region, six storage facilities for 29,000 tonnes in Chernihiv region, three storage facilities for 15,000 tonnes in Zhytomyr region, and two storage facilities with a capacity of 17,000 tonnes in Kherson region. In other regions, construction is planned in smaller volumes.
"The average cost of building such a storage facility is UAH 10-12 million. If we consider that a loan for such construction costs 27% per annum, it becomes clear why small and medium-sized industrial potato producers cannot afford such costs," the association has said.
In February, the association wrote a letter to Ukrainian President Volodymyr Zelensky asking for assistance in adopting a state-funded program for the development of industrial potato growing for 2021-2025 developed by experts from the association and the Institute of Agrarian Economics at the request of the Ministry for Development of Economy, Trade and Agriculture.
The association said that the state budget will receive UAH 3.8 billion in taxes, fees and growth of VAT revenues for five years of the program if it is approved.
The number of industrial potato farms in Ukraine is reduced annually by 10-13% because of lack of profit, business risks and the need for high investment, the association claims. For example, in 2017 there were 1,296 industrial potato farms but a year later this had decreased to 1,114.