July 19 2002, 20:36 APK-Inform

WB to start funding Ukrainian agriculture in early 2003

Ukraine's Vice-Prime-Minister for agriculture Leonid Kozachenko met Friday in Kiev with representatives of the World Bank's mission to discuss project development for funding Ukrainian farming. The discussion concerned main obstacles to the project. These include shortcomings of Ukrainian legislation in the part of crediting farming business and absence of hypothecary system in Ukraine. Participants of the meeting observed that interest rates of commercial banks at the moment were too burdensome for farmers. Compensation, provided by state budget to commercial banks, financing farming businesses, was inefficient and did not actually assist many farmers in getting credits at reasonable rates. That is why a pressing need for Ukrainian legislative power was now to provide a juridical basis for lowering banking rates. Besides, Parliament will have to enact a law about rights of creditors. "These issues require prompt solution, so we could start the project as soon as possible," World Bank's representative Rodrigo Chavez said.

Funds, in the amount of no less than $250 million, are planned to start coming in the first quarter of 2003. They will be disbursed to banks for further distribution to farming businesses.