Advancing Ukraine’s grain sector through policy dialogue

The EBRD is helping to establish a legal framework for the temporary storage of agricultural commodities in Ukraine

Grain is the backbone of Ukraine’s agricultural economy. Rich soils, climatic and geographic conditions allow Ukraine to supply wheat, barley and corn to international markets. But the huge sector’s economic potential is hampered by the lack of adequate policies to tackle problems such as lack of financing of farms, state interventions, export restrictions, price control and tariff measures.

The Grain Warehouse Receipt Programme

The EBRD has been actively involved in developing the Ukrainian grain sector. Together with the US Agency for International Development and funds provided from the Netherlands, the Bank has initiated an institutional policy for the creation of a proper legal framework for its Grain Warehouse Receipt Programme in Ukraine, which aims at providing traders and producers with loans for the temporary storage of agricultural commodities. In cooperation with the Food and Agriculture Organization (FAO), the Bank is broadening its support to the Ukrainian grain sector by further encouraging the government of Ukraine and private stakeholders to engage in policy discussions with the aim of creating a predictable and efficient regulatory environment which would stimulate further development of the grain sector.

Sector review and policy reforms

The Canadian Agency for International Development (CIDA) has been encouraging this approach by financing technical assistance to conduct a comprehensive review of the sector based on the analysis of wheat, barley and corn markets; to identify major sector constraints; and to propose applicable policy options. Strategically, issues identified as policy reform priorities were discussed in a workshop involving Ukrainian government agencies, grain trading industry, farms associations and non-governmental organisations.

The above initiatives worked to strengthen public-private dialogue and to help improve policy-making processes which should ultimately create a better business climate for the Ukrainian grain sector.