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2 September 2015

Agro News Digest. June – August 2015

STRATEGY FOR AGRICULTURE DEVELOPMENT 2015-2020

The Ministry of Agrarian Policy and Food of Ukraine has drafted a single and comprehensive Strategy for Agriculture and Rural Development 2015-2020 (the ”Strategy”) with the overall objective “to increase agricultural competitiveness and promote rural development in a sustainable manner in line with the EU and international standards”.

Specifically, the Strategy defines the following strategic priorities of the agribusiness reform:

  • business climate and fight against corruption; setting up of a stable legal framework in line with the EU and international standards, in particular by implementing the EU-Ukraine Association Agreement;
  • land reform;   
  • institutional reform of the Ministry of Agrarian Policy and Food, and related state agencies and state-owned enterprises;
  • food security;
  • taxation;
  • agri-food chain development;
  • rural development – revival of rural areas;
  • access to international markets, import and export management, import promotion and internal market management;
  • research, education and advisory services;
  • environmental protection and management of natural resources (including forestry and fishery).

The government engaged civic activists and representatives of business interested in the agribusiness reforms in drafting of the Strategy.

SUMMARY OF LEGISLATION APPLICABLE TO AGRIBUSINESS

 Simplification of Quarantine Control 

On 15 July 2015, the Parliament of Ukraine adopted the Law “On Amendments to the Law of Ukraine “On Plant Quarantine”(concerning the reduction of administrative burden” (the “Law”) that considerably simplifies grain export. According to preliminary estimates, the adopted amendments are expected to reduce to a third the administrative burden on grain traders and to decrease their expenditures by UAH 1 billion.

The Law envisages:

  • reduction of the term for issuing of phytosanitary and quarantine certificates to 24 hours after the transportation vehicle is loaded up;
  • introduction of separate lists of plants subject to quarantine control for import, export, re-export and transportation within the territory of Ukraine;
  • publication of the full list of  plants  subject to quarantine control with respect to the destination country on the webpage of the central government body implementing the state policy in the sphere of plant quarantine, and other.

The Law has been already signed and will enter into force on 6 November 2015.

Improvement of Procedures for Animal Identification

On 7 August 2015, the Law “On Amendments to Certain Legislative Acts of Ukraine on the Identification and Registration of Animals” dated 15 July 2015 came into force (the “Law”).

In particular, amendments to the Law "On Identification and Registration of Animals" address the following:

  • payment for identification and registration of animals:(1) fees for animal identification and registration are payable by owners of the animals (legal entities and individuals); (2) fees for identification and registration of animals owned by individuals may be paid by a third party (any legal entity or individual);
  • state support for such services: an individual (owner of the animal) who paid the fee for identification and registration services may claim for reimbursement of such fee from the state budget.

Decontrol of Segregated Ballast Waters at Sea Ports in Ukraine

On 7 July 2015, the Cabinet of Ministers of Ukraine adopted Resolution No. 492 amending the Rules of Protection of Internal Sea and Territorial Sea Waters of Ukraine from Pollution and Contamination, as approved by the Resolution of the Cabinet of Ministers of Ukraine №269 dated 29 February 1996 (the “Resolution”). The amendments are adopted to reduce the time for passing of inspection procedures by a ship, and to root out the corruption schemes.

In particular, the Resolution envisages that:

  • operations involving segregated ballast shall be undertaken under the MARPOL 73/78 Convention ratified by Ukraine;
  • inspection of ballast waters shall be carried out only in case of water contamination during the ballast water discharges from a ship: availability of visible floating particles or visible traces of oil or oily or other contaminants in the area of discharge. 

The Resolution entered into force on 24 July 2015.

Prohibition of Privatization of Engineering Infrastructure Facilities of Amelioration Systems and Underlying Land Plots

On 6 June 2015, the Law “On Amendments to Some Legislative Acts of Ukraine Regarding the Prohibition of Privatization of Engineering Infrastructure Facilities of Amelioration Systems and Underlying Land Plots” dated 12 May 2015 came into force (the “Law”). The Law prohibits privatization of the engineering infrastructure facilities of amelioration systems and underlying land plots that are state and municipal ownership.

Changes of the Procedure for Land Plots State Registration

On 6 June 2015, the Law “On Amendments to Some Legislative Acts of Ukraine as to Formation of Land Plots and Their State Registration Based on the Land-Use Planning and Control Documents Prepared Before 2013” dated 14 May 2015 came into force (the “Law”). The Law provides that in case the technical documentation for land use was prepared before 1 January 2013 whilst details of the land plot had not been registered in the State Land Register, state registration of such land plots shall be performed on the basis of available technical documentation on the land-use planning and control.

Reduction of the Cost of Loans for Agribusiness: appropriate forms of documents are approved

On 7 August 2015, the Order of the Ministry of Agrarian Policy and Food of Ukraine “On Approval of the Forms of Documents and Filing of Information on the Financial Support ofMeasures in Agribusiness Industry throughCheaper Loans” No. 253 dated 1 August 2015 entered into force (the “Order”). The Order approves the forms of documents required for implementation of the Programme of Reduction of the Cost of Loans for Agribusiness (the Programme is approved by the Resolution of the Cabinet of Ministers of Ukraine No. 300 dated 29 April 2015).

SUMMARY OF DRAFT LAWS APPLICABLE TO AGRIBUSINESS 

State Regulation of Purchase Price for Milk

On 15 July 2015, the Parliament of Ukraine adopted as a basis the Draft Law “On Amendments to Certain Legislative Acts of Ukraine” (regarding state purchase price control and support of rural areas) No. 2089 (the “Draft Law”).

The Draft Law suggests fixing the minimum purchase price per 1 kilogram of raw milk (excluding the value added tax):

  • Grade B milk – UAH 4

According to the Draft Law, the purchase price shall be fixed for all producers of dairy primary products and milk (including individuals).

Tax Benefits for Farmers

On 14 July 2015, the Draft Law envisaging the amendments to the Tax Code of Ukraine (regarding encouraging of production of agricultural goods) No. 2351a (the “Draft Law”) was put on the agenda of the Parliament of Ukraine. The aim of the Draft Law is to reduce the tax burden on national agricultural producers, and primarily on the meat producers.

Detailed Rules for Production of Unprocessed Organic Products

The Cabinet of Ministers of Ukraine drafted Resolutions establishing the detailed rules for production of:

The draft Resolutions have been prepared to promote the effective development of organic goods (raw materials) production and the environmental protection.

Terms of Insurance of Agricultural Products subject to State Support

The Ministry of Agrarian Policy and Food of Ukraine drafted a number of Orders setting out the terms of insurance of the following crops: (1) spring grains; (2) grain maize; (3) soybeanand (4) sunflower. In addition to the terms of insurance, the draft Orders establish the standard insurance rates and provide templates of standard contracts and other documents required to implement the Insurance System for Agricultural Products Supported by the State. The Orders have been drafted in accordance with para. 6 of Article 21 of the Law of Ukraine “On Specific Aspects of Insurance of Agricultural Products subject to State Support”.

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