Government focuses on agricultural service cooperatives

According to the Volyn Regional State Administration, the government this year will provide Volyn farmers with nineteen 200-liter refrigeration units to improve the quality of dairy products.

Refrigeration equipment will be provided to farmers who feed five or more cows and sell milk to state-financed organizations and regional market, the Information-Analytical Bulletin of the Cabinet of Ministers of Ukraine informs.

Six Volyn owners have already received refrigeration units from the state. The price of one unit is about 25,000 UAH. Money is provided from the regional budget according to a special "Support Program for private peasant farms 2012-2016."

Family-operated farm owners plan to create dairy service cooperatives. According to the agricultural market experts, it is very hard to solve many production issues for small and medium agricultural producers.

Farmers who work alone do not have an access to the market, and intermediaries offer discriminatory terms and conditions. As a result, there are problems with employment in rural areas, low-wage, tax paying and filling of the local councils’ treasury.

Currently there are 4.3 million private peasant farms and over 40,000 farm enterprises in Ukraine. They co-produce almost a half of the total agricultural production, especially labor-intensive.

According to the State Statistics Service, private households produce 86% of vegetables, 78% of milk, 75% of beef, 57% of pork, 22% of grain, 19% of poultry. In 2012, private households produced a gross output in the amount of over 110 billion USD. It accounts for 49.3% of the total agricultural gross output.

Experts say that, along with the strengthening of farming and large private production, it is also necessary to develop the cooperative movement in the rural areas. This should become an important basis for the restructuring of agriculture.

Nikolai Gritsenko, Head of “Market infrastructure development" area of the AgroInvest USAID Project points out that agricultural service cooperatives (ASC) must play the role of a bridge between producers and consumers of agricultural products.

Experts say that the legal framework of agricultural cooperation becomes more favorable, although not fast enough . In November 2012, Parliament approved a new version of the law "On agricultural cooperation," which refers cooperatives serving only their members to non-profit organizations.