Ukraine: Ukraine Introduced New Agricultural Support System in 2017

Upon introduction of a new agricultural support system in early 2017, Ukraine eliminated budget revenue support programs based on Value Added Tax (VAT) subsidies. A new direct budget transfer system significantly reduced support for livestock and pig farmers, while support for poultry producers will likely decline at a lesser extent. Among animal producers, dairy, beef and pork producers are most likely to be negatively affected due to smaller expected margins. Support for bulk crops (grains and oilseeds) was cancelled; however, these losses were partially offset by more efficient export VAT reimbursement for these crops. Based on the elimination of subsidies for bulk crops, margins are expected to be lower which could result in slower growth of that sector in the longer term. The new system provides lower support to agricultural producers overall; however, it is difficult to predict specific changes in production levels across sectors. 

Ukraine: Ukraine Introduced New Agricultural Support System in 2017