January 16 2003, 10:14 UNIAN

Profits of Ukraine's farm sector in 2002 some $280,000 less than year before - Ukraine's Vice Prime Minister

Total profits of Ukrainian agriculture in 2002 constituted some 700 million hryvnias ($131 million), Ukraine's Deputy Prime Minister for Agriculture Ivan Kyrylenko said to parliamentary hearings "About the progress of reforming and measures for improving situation in the countryside".

Kyrylenko said the figure was by about 1.5 million hryvnias ($281,270) less than in 2001. He attributed the cut in farms profit by "worsened price situation" in domestic market of farming products, i.e. drop of purchasing prices for some items. Thus, profitability of grain dropped about twice from the year before - to 23 percent. In particular, it is explained by the fact that some 90 percent of grain was sold in the least beneficial period for sales - September to November - where grain supplies in domestic market were several times as high as the demand, which induced a price drop.

Besides that, livestock breeding was a loss-bearing industry last year, Kyrylenko said. "Total breeding herd has decreased. This will have a negative impact upon livestock industry development for several years ahead," he said.

He also noted that just 15 percent of the restructured farming enterprises in Ukraine had at the moment a present-day management structure, advanced technologies and diversified production, which were reducing risks in agricultural business.