EBRD and FAO pledge support to Ukrainian dairy sector

By Anton Usov

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The European Bank for Reconstruction and Development (EBRD), Food and Agriculture Organization of the United Nations (FAO) and the Ukrainian Ministry of Agrarian Policy and Food are joining forces to improve the climate for investments in the dairy sector and bring cooperation between the private and public sectors to a new level.

The Ukraine Dairy Market Forum, which is taking place in Kiev on 23 April 2013, is to launch a policy dialogue between the EBRD, FAO, key market regulators and players. It builds on highly successful joint initiatives in the Ukrainian grain sector in 2011–12, which resulted in greater market liberalisation and overall efficiency improvements.

The Forum being held today brings together senior sector specialists and practitioners from the Ministry of Agrarian Policy and Food of Ukraine, leading associations from the industry, domestic and foreign dairy companies as well senior sector experts from the FAO and the EBRD. The event was funded by the Central European Initiative (CEI).

Participants of the Forum are planning to set up a Working Group, which will be looking at issues related to the assessment of the dairy industry investment needs, upgrade of milk farms, improvement of raw milk quality and overall improvement of the dairy industry standards to ensure Ukraine’s global competitiveness. Ukraine accounts for almost 2 per cent of global milk production and remains among the top six producers of milk in Europe but its milk output has nearly halved since 1991.

It is expected that once it has been set up, the Working Group will review the existing legislation related to the dairy sector of Ukraine and will provide professional advice on new legislation required to assure the sustainable development of this sector. It will also help in coordinating market strategies and prices between milk producers and processors based on transparent market evaluation mechanisms used worldwide. Leading international industry experts will also be involved in specific discussions on key technical and marketing issues of the dairy sector.

In the context of the Forum, the FAO and EBRD will present findings from the recent Ukraine Dairy Market study, which reported that Ukraine has significant investment potential to improve the quality of milk and milk products through the development of modern commercial dairy farms. The latter are increasingly replacing traditional household milk production schemes, which previously accounted for 80 per cent of milk output.

“In the light of growing global food security concerns, we believe Ukraine has a lot to offer as an exporter of finished agricultural products. The rapidly growing Ukrainian dairy sector is another possible answer to the issue of sustainable food supply on this planet. We welcome the ongoing policy dialogue between all parties in this important sector for the Ukrainian economy,” said Gilles Mettetal, EBRD Director for Agribusiness.

The EBRD is the largest financial investor in Ukraine. As of 31 March 2013 the Bank had committed over €8.63 billion (US$ 11 billion) through 337 projects in Ukraine. It also invested over €6.9 billion (US$ 9.0 billion) through 451 projects in the agribusiness sector across its countries of operations.

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