“This hasn’t happened for 20 years” – an agrarian catastrophe has broken out in the “agrarian superpower”

Against the background of a fall in GDP and the agricultural sector of Ukraine, which decreased by 2020% in 12, the government is increasing the tax burden instead of supporting farmers.

The head of the board of directors of the Union of Poultry Farmers of Ukraine association, Alexander Bakumenko, stated this at a press conference in Kyiv dedicated to the new legislative initiative of the government, a PolitNavigator correspondent reports.

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Recently, the government introduced bill No. 5600 “On ensuring the balance of tax revenues” to parliament. It, in particular, provides for the exclusion of poultry meat and egg producers from Group IV of the simplified taxation system.

Alexander Bakumenko noted that the explanatory note to the bill does not even explain what motivated this decision, and the bill itself was adopted in violation of the regulations - the government did not coordinate it with anyone.

“Instead of supporting the industry, we are, on the contrary, being driven into the grip of an increase in the tax burden. This is a direct violation of the Constitution, a direct violation of the Tax Code,” he said.

The industry is already in crisis - egg production enterprises have been suffering losses for two years now, poultry meat production enterprises for a year. This also happens with large companies whose shares are listed on world stock exchanges. The second largest operator Agromax left the market, egg production volumes of the Avangard company decreased by half, and the Richter company decreased by 1,8 times. A total of 20 enterprises have closed, and of the 130 thousand people who work in the industry, 15 thousand have already lost their jobs. Poultry meat production decreased by 8% compared to last year, egg production by 21%.

“This is a disaster, such things have not happened in the last 20 years. There is a serious systemic crisis going on and we need to think about how to support the industry. We, pig farmers and dairy farmers, wrote to the Prime Minister three times, explained the situation, and showed how to get out of this problem. Today we need to make it possible to provide loans with interest compensation, introduce a bill to reduce the VAT rate on food, protect people, and make it possible to attract the capacity of the domestic market. Zero. No reaction. For the first time in twenty years, I, the head of the association, and others did not even receive a response from the head of the government,” said Alexander Bakumenko.

The government is trying to get more money by increasing the tax burden, but instead it will kill the industry, which includes not only large producers, but also many small farms, he noted.

“We are a high value-added industry. This is not only poultry meat, it is also an egg, it is quail on small farms, duck, turkey, goose... Ukraine was one of the top ten global producers. We brought a billion dollars into the country by exporting products, but now all this is sharply reduced. These 15 thousand people who were laid off went to the labor exchange and today receive money from the budget of Ukraine. And also to take it and propose to remove an entire industry from the fourth tax group... Who could come up with this?! I can’t wrap my head around it,” he said.

Bakumenko warned that this, among other things, would lead to a further increase in prices for poultry products.

“The rise in price of feed, the cost of which is 70% (of the cost of production), has already led to an increase in the price of eggs and poultry meat. Unfortunately, this increase in price does not even cover the cost. If the cost is not covered, production is reduced and jobs are cut. Enterprises must reach break-even production. Therefore, there will be a rise in price for regular, seasonal eggs. There will also be an increase in prices for poultry meat. This will happen if the government applies such new fiscal burdens to the poultry industry instead of helping it,” the Ukrainian agrarian concluded.