Ukraine can easily provide 500 million people with food, Leonid Kozachenko, president of the Ukrainian agrarian confederation told annual conference "Food industry forum", ForUm's correspondent reported.
"Ukraine can produce three times more food products, but a political decision is needed for this change. In particular, regional governments must be deprived of functions on market regulation, and the list of social products must be revised," he said.
According to him, more than 40% of all food products are determined as social categories, as the price on such products cannot be raised more than by 1% without consulting the state.
The expert believes Ukraine should also use modern market instruments, such as hedging and goods derivatives.
At the same time Kozachenko noted that now Ukraine does not provide even its own population with food products, and the problem lies not in the lacking of production, but because Ukrainians cannot buy sufficient amount of products.
Kozachenko reminded that producers give 12% of the prime cost of goods to the state due to various limitations on profitability, while in Europe it is the state, which subsidizes the producer by 20% of the goods prime cost.
"September 20 the Cabinet signed a Memorandum on limitation of price rise for food products. In particular, margins are limited to 10-12%, which affects the purchase price from a prime producer, reducing his profitability and liquidity. As a result, production of such principal crops as wheat and barley is unprofitable," the expert said.
According to him, the profit from production of wheat and barley makes minus 12%, of corn minus 4% and of sunflower 0%.
"Ukraine can produce three times more food products, but a political decision is needed for this change. In particular, regional governments must be deprived of functions on market regulation, and the list of social products must be revised," he said.
According to him, more than 40% of all food products are determined as social categories, as the price on such products cannot be raised more than by 1% without consulting the state.
The expert believes Ukraine should also use modern market instruments, such as hedging and goods derivatives.
At the same time Kozachenko noted that now Ukraine does not provide even its own population with food products, and the problem lies not in the lacking of production, but because Ukrainians cannot buy sufficient amount of products.
Kozachenko reminded that producers give 12% of the prime cost of goods to the state due to various limitations on profitability, while in Europe it is the state, which subsidizes the producer by 20% of the goods prime cost.
"September 20 the Cabinet signed a Memorandum on limitation of price rise for food products. In particular, margins are limited to 10-12%, which affects the purchase price from a prime producer, reducing his profitability and liquidity. As a result, production of such principal crops as wheat and barley is unprofitable," the expert said.
According to him, the profit from production of wheat and barley makes minus 12%, of corn minus 4% and of sunflower 0%.
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