Information for fruit and vegetables business in CIS
Ukrainian agricultural producers may face problems on the market of plant protection assets and seeds
Ukrainian agricultural producers may face problems on market of plant protection assets and seeds in the nearest future.
The special governmental program "Contraband-STOP!" is being developed by the Cabinet of Ministers of Ukraine; it foresees some new mechanisms which are able to prevent the contraband commodities come to the country illegally.
In case of the successful implementation of this program in many rayons, especially cross-border regions, the significant changes on the market of plant protection assets and seeds are possible. According to the assessments of the market players, in different rayons from 20% to 40% of plant protection assets and from 20% to 50% of seeds are supplied to the mentioned market as contraband commodities.
At present moment, according to the information provided by the specialists of Agricultural Marketing Project (AMP), many of the illegally imported seeds, especially of Moldovan and Polish origin, are much cheaper than the legal commodities sold on the territory of Ukraine - once the price differs in several times. Besides, we should mention that many producers are successfully using the not registered in Ukraine chemicals, so they will have to search for the alternative.
The general problems created by the illegal import of the plant protection assets to Ukraine are as follows: the legally operating companies receive fewer profits than they due; the azonal and unregistered varieties appear on market; the same thing about the unregistered and not allowed for use chemicals. The another serious problem is that the majority of the contraband commodities are the fakes of the brands popular in the world.
The contraband plant protection assets and seeds is performed nearly through all the borders of Ukraine; the greatest volumes are brought o Ukraine from Hungary, Poland, Moldova and Turkey.
We should mention that the contraband volumes from Poland, Slovakia and Hungary have decreased significantly since the time of their entering to the EU. It due not only the intensification of the custom control, but mainly because of the cancel of VAT refund for the commodities exported form these countries, so the prices on many plant protection assets became practically similar to the Ukrainian prices.
The strengthening of the custom control and the corresponding decrease of the contraband volumes may be of the great profit advantage for the legally operating companies which supply the plant protection assets and seeds to Ukraine - the market extension for these companies is possible on 10-30%. According to the evaluation of market players, at the present moment only the seed market of Ukraine constitutes about EUR 15-20 mln. per year.
To the opinion of AMP specialists, the Government of Ukraine should think about the simplification of the registration process for seeds and plant protection assets on purpose to encourage both the development of the legal market of plant protection assets and seeds and to elimination of the pretexts for the contraband and corruption in this sector. It may be also the additional motivation to the development of the agriculture of Ukraine, because the advantageous position in many branches of economics is defined first of all by the speed of the new technologies mastering.
As it was reported earlier, on the 14th of February 2005 according to the results of the council of the Cabinet of Ministers it was decided that Verkhovna Rada consider the series of draft laws aimed both on the operational and economic methods of the contraband prevention.