FAO presents sociological study on state support for small agricultural producers in Ukraine

A survey of agricultural producers in Ukraine has revealed a low level of participation in state support programmes. The survey found that just 20.3 percent of small- and medium-sized agricultural enterprises, including farmers, applied for state support from 2000 to 2017.

FAO organized a roundtable here today to present and discuss the sociological research, which was carried out by Ukraine’s Social Monitoring Centre under an ongoing FAO project on technical assistance to the Ministry of Agrarian Policy and Food of Ukraine. Attendees discussed recommendations on developing various mechanisms of state support for Ukrainian agricultural producers based on the analysis of social polls and relevant EU experience in agricultural support.

In total, researchers interviewed 2 051 legal entities, including 1 607 specializing in crop production and 444 with a focus on animal husbandry. Additionally, the survey covered up to 600 households with no legal status but that are growing their products for sale.

“This is the first time that such an all-national survey on agricultural support programmes, covering not only legalized producers but also a big number of rural households, has been held in Ukraine,” said Iryna Kobuta, the FAO economist who is coordinating the project. “Such a comprehensive approach allowed us to determine desirable areas of support and to recommend criteria for developing other programmes for small agricultural producers, which in turn will bring positive input to the whole sector.”

Attending the meeting were representatives of the Ministry of Agrarian Policy and Food of Ukraine, various agribusiness associations, FAO and the Social Monitoring Centre.

More than a quarter (25.9 percent) of the representatives of small- and medium-sized agricultural enterprises, including farmers, said that they hadn’t heard about any state support programme at all, while 59 percent were generally aware. Only 15.1 percent of the respondents were aware of government programs and had shown interest in at least some of them.

Awareness among rural households was even lower, as 61.2 percent of them had not heard of any state support programmes.

Because so few agricultural entities applied for state support, researchers studied barriers to participation, discovering that almost half of respondents didn’t believe in the mechanism of state support and almost 45 percent felt that the lack of relevant information made their participation impossible.

Among the other issues studied by the survey were the level of effectiveness of current and previous state support programmes, the level of respondents’ readiness to participate in such programmes considering the types of their agricultural holdings, the size of land use, the number of employees and others, and respondents’ ranking of the most attractive state support programmes.

Key figures

• More than two-thirds of the respondents (69.3 percent) were interested in the support programme for the purchase and modernization of agricultural machinery, and 51.2 percent were interested in the budget subsidy introduced in 2017 instead of the special regime of VAT accumulation that had been previously cancelled.
• Most livestock producers (61.7 percent) were very supportive of possible programmes to help young agricultural producers start agrarian businesses.
• Nearly three-fourths (73.2 percent) of the small- and medium-sized agricultural producers are in the need of general services.
• Every fifth respondent (23 percent) had experience in applying to the bank for a loan during the past five years.
• One of every fourteen respondents (7 percent) had experience in leasing during the past two years.
• Only 18.2 percent of small- and medium-sized agricultural enterprises, including farmers, are members of any association of agricultural producers.
• More than one-fifth (20.8 percent) of the surveyed owners of rural households highlighted that revenue from the sale of agricultural products amounted to more than 90 percent of their income.

The study, titled “Evaluation of the Instruments of the State Support for Agricultural Producers,“ revealed a high rate of success among submitted applications, evidence that additional information and consulting resources could increase the number of small- and medium-sized agricultural producers involved in state support programs. Options for this include advisory services, business associations, state banking structures, and technical suppliers.

28 February 2018, Kyiv, Ukraine