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Government policy in field of agricultural export promotion in Ukraine

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http://www.fao.org/economic/est/international-trade/europe-and-central-asia/call/en/

Expert Round Table - Best practices in export promotion: Experiences in Latin America, Europe and Central Asia

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Government policy in field of agricultural export promotion in Ukraine

  1. 1. Government policy in field of agricultural export promotion in Ukraine Volodymyr Pugachov NSC “Institute of agrarian economics” 25th of May 2016
  2. 2. Main research objectives - analysis of the most significant changes in agricultural export and government interventions influence on export performance in Ukraine; - detection of the main factors affecting export and prognosis, using flexible neural models, on export performance under various circumstances influence; - elaboration of proposals to Government Target Program “Agricultural sector development till 2020” in terms of export promotion.
  3. 3. Data sources - State Statistics Service of Ukraine; http://www.ukrstat.gov.ua/ - Ministry of Agrarian Policy and Food of Ukraine; http://minagro.gov.ua/ - State Fiscal Service of Ukraine; http://sfs.gov.ua/ - other statistical bodies.
  4. 4. Foreign trade of Ukrainian agricultural products, billion $ 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 2005 2009 2010 2011 2012 2013 2014 2015 4.6 9.8 10.2 13.1 18.2 17.3 17.0 14.8 2.9 5.2 6.1 6.7 7.9 8.6 6.4 3.7 1.7 4.6 4.1 6.4 10.3 8.7 10.6 11.1 Export Import Balance
  5. 5. Share of agriculture in overall Ukrainian goods foreign trade 46.2 76.9 42.0 39.538.2 26.8 Export Import 2013 2014 2015 2013 2014 2015 27.4% 31.5% 38.7% 11.2% 12.2% 10.3% all goods, billion $ share of agriculture
  6. 6. Place of Ukraine in The World by export of some agricultural products 1st place sunflower oil 3rd place corn 4th place barley 6th place wheat 7th place soybeans 8th place poultry
  7. 7. Commodity structure of Ukrainian agricultural products foreign trade balance in 2015, million $ 3 026.5 2 899.6 2 237.7 801.6 786.5 767.5 550.5 201.6 189.5 109.0 1 943.5 -85.4 -92.3 -94.9 -99.5 -123.6 -128.1 -128.7 -197.5 -200.0 -263.5 -1 078.9 Sunflower oil Corn Wheat Soybeans Oil-cake Barley Rapeseeds Cigarettes Meat and poultry Rapeseed oil Other goods Coffee Sunflower seeds Palm oil Extracts and essences Bananas Products for animal feed Other food products Frozen fish Citrus Raw tobacco Other goods
  8. 8. Geographical structure of Ukrainian agricultural products export in 2015 Asia – 46.6% (6 884.8 million $) including China – 1.24 billion $ India – 1.08 billion $ Turkey – 761.7 million $ EU – 28.2% (4 174.2 million $) including Spain – 855.6 million $ Italy – 586.5 million $ Netherlands – 580.1 million $ Africa – 13.6% (2 006.7 million $) including Egypt – 1.02 billion $ Tunisia – 247.3 million $ CIS – 10.2% (1 507.4 million $) including Belarus – 395.2 million $ Russia – 310.4 million $ Kazakhstan – 239.4 million $ North and South America – 0.8% (121.2 million $) including Mexico – 58.1 million $ USA – 43.2 million $ other countries – 0.6% (87.0 million $)
  9. 9. Dynamics of Ukrainian agricultural products foreign trade balance with EU, million $ 1553.3 2076.1 3507.8 2250.7 2124.1 3402.8 4991.6 4756.0 4730.9 4174.2 1290.6 1571.0 2675.9 1985.8 2309.3 2659.1 3082.1 3321.4 2621.9 1695.8 262.7 505.1 831.9 264.9 -185.2 743.7 1 909.5 1 434.6 2 109.0 2 478.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Export Import Balance
  10. 10. 4 174.2 million $ 4 667.0 million $ 2015 2016 (prognosis) +492.8 million $ Impact of DCFTA on Ukraine-EU agricultural trade relations (flexible neural modeling results) *optimal scenario
  11. 11. Dynamics of non-tariff measures in the world Source: WTO. World Trade Report 2012, p. 105. Years Share of product lines under NTM, % Share of trade value under NTM, % 1996-2000 0.26 0.29 2001-2004 0.49 0.57 2005-2008 0.53 0.54
  12. 12. The most problematic factors for export in Ukraine Source: The Global Enabling Trade Report 2014 Access to trade finance 16.0% Inappropriate production technology and skills 13.7% Identifying potential markets and buyers 13.6% Technical requirements and standards abroad 11.1% Access to imported inputs at competitive prices 9.4% Difficulties in meeting quality/quantity requirements of buyers 7.5% Burdensome procedures at foreign borders 6.4% Tariff barriers abroad 4.8% High cost or delays caused by domestic transportation 4.8% Corruption at foreign borders 4.7% Rules of origin requirements abroad 4.5% High cost or delays caused by international transportation 3.7%
  13. 13. Doing Business 2016. Trading across borders Source: Doing Business 2016 Indicator Ukraine Germany Poland Overall rank 83 15 25 Trading across borders rank 109 35 1 Documents to export (number) 11 4 4 Time to export: border compliance (hours) 26 36 0 Time to export: document compliance (hours) 96 1 1 Domestic transport (hours) 5 3 14 Cost to export: border compliance, $ 75 345 0 Cost to export: document compliance, $ 292 45 0 Domestic transport, $ 300 500 1 000
  14. 14. Logistics performance index, 2014 Source: http://lpi.worldbank.org/ Country LPI Infrastructure Logistics competence Tracking & tracing Timeliness Germany 1 1 3 1 4 Netherlands 2 3 2 6 6 Belgium 3 8 4 4 2 Great Britain 4 6 5 5 7 Singapore 5 2 8 11 9 Sweden 6 9 6 7 8 Norway 7 4 1 31 5 Luxembourg 8 15 14 22 1 USA 9 5 7 2 14 Japan 10 7 11 9 10 Poland 31 46 33 27 15 Ukraine 61 71 72 45 52
  15. 15. Export, evaluation of NTM, 2015 70.0% 85.0% 59.0% 79.0% 27.0% 34.0% 48.0% 31.0% 83.0% 70.0% 84.0% 59.0% 67.0% 83.0% 80.0% 2.7 3.2 3.2 3.3 3.4 3.6 3.7 3.8 3.8 3.9 3.9 4.0 4.0 4.1 4.2 0.0 1.0 2.0 3.0 4.0 5.0 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Share of entities, that passed procedure Average rating (1-significant problem, 5-no problem)
  16. 16. Possible main principles of Ukrainian export strategy (also for agriculture) Clear roles division between State and business Dialogue and responsibility Transparency and predictability of policy (both economic and trade) Compliance with international obligations Integrated approach to solve the problem Fiscal responsibility Market Approach Export Strategy principles
  17. 17. Steps, that already have been done by 2015-2016 1) Export Promotion Council was established main objectives: - promotion of Ukrainian producers access to new markets; - assistance in trade problems solution; - encourage and support of export activities (ex. information support, trade protection, etc.) - improvement of legal framework for trade. 2) State Target Program of Agricultural Sector Development till 2020 is on final stage of elaboration proposed measures relating to exports: - creation of special Ukrainian Export Support Centers; - conduction of market researches; - target markets identification; - consulting of agrarian exporters.
  18. 18. Thank you for attention! Volodymyr Pugachov tel.: +38 066 935 59 39 e-mail: bart05@ukr.net

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