Government supports domestic agricultural machinery market

One of the major problems of the agricultural sector is the development of the domestic agricultural machinery market, the Information-Analytical Bulletin of the Cabinet of Ministers of Ukraine informs.

Experts say Ukraine has a rapidly growing agricultural sector, which over the past few year has become the locomotive of the national economy and needs its own modern agricultural machinery.

Grain production in Ukraine will increase to 80 million tons annually. This requires a qualitatively upgrade of the combine harvester fleet.

Experts from the Association of Manufacturers of Agricultural Machinery and equipment note that it is very profitable to invest in agricultural machinery in Ukraine because of the high market capacity. 

The annual volume of Ukraine's agricultural machinery market may reach 25 million UAH, which is by 4 times higher than in recent years. According to government plans, in the next 5 years Ukraine will produce over 10,000 modern combine harvesters and 20,000 tractors.

Agricultural markets analysts say in 2012 Ukrainian agrarians purchased nearly 15,000 pieces of equipment for 6 billion UAH.

Experts of IA "AgroNews" believe that domestic agricultural manufacturers in cooperation with foreign companies can fill the niche of agricultural machinery. The country has already created significant incentives for production of machinery, which will help attract over 120 billion UAH to the industry within the next 5 years.

But Ukraine should continue to improve the investment environment for modernization of domestic agricultural machinery, experts say. According to Alexander Grigorovich, Director of Engineering and Technical Support and Agricultural Machine Building of the Ministry of Agrarian Policy and Food, high-tech equipment is required to produce modern agricultural machinery.

Experts also say it is necessary to ensure a stimulating customs tariff regulation for modernization of manufacture of modern agricultural machinery. For this the Ukrainian government has drafted amendments to the Customs Code which will help overcome the barriers to attracting investment to modernization of domestic agricultural industry.

Ukraine currently has over 40 plants, specializing in manufacture of agricultural machinery. They produce over 3,500 items of machinery. But, a steady increase of agricultural product requires upgrade of farm machinery, which includes annual commissioning of 7,500 combine harvesters, 35,000 tractors, over 2,500 sowing units jointly with tractors and other agricultural machinery.