Igor Mazepa, CEO of Concorde Capital investment company, comments how to make state subsidies for Ukrainian farmers more effective
The Ukrainian government takes quite a passive role in distributing subsidies. In essence, the first company that arrives and makes an offer will practically gain a large piece of the subsidy pie. Though all agri firms can compete for state subsidies in theory, only 10-20 enterprises have been able to gain them in recent years.
What’s needed is a clear strategy of development and transition to understandable stimuli – says Igor Mazepa. It’s necessary to understand what goals are to supposed be reached before state support can be distributed. Instead, what we have now is the state’s agricultural budget is approved for a year, based on the immediate situation. That’s why there is so little effectiveness: who runs quickest to a ministry or fiscal committee can qualify for something, while others are left with what lobbyists were able to gain for them – continues Igor Mazepa.
The more important question now is whether farmers need subsidies and how to stimulate them in the future. Most of the top agricultural firms are profitable enough on their own. But for sector's development, particularly the construction of new capacities and introducing new technologies, then state stimuli are very important for companies that invest and create jobs – summarizes Igor Mazepa. It’s also necessary to improve control on the use of state support.