European Parliament questions Ukraine subsidy spending

Wednesday, 07 March 2018 17:30
Under conditions of limited budget resources for support of farmers in Ukraine, funding must be allocated effectively and efficiently in order to reach those who really need it. But this does not seem to be the case.
Critics point to the 2017 distribution approved by Ukraine lawmakers. A third of the funds (€130m) went to just one company, PJSC Myronivsky Hliboproduct. It’s the country’s largest industrial corporate monopolist in Ukraine. CEO and chief beneficiary of the company is oligarch- billionaire Yuri Kosyuk – one of the richest people in Ukraine, according to Forbes Ukraine. Myronivsky Hliboproduct is the most highly profitable company in the Ukrainian agribusiness.

At the same time, tens of thousands of small and medium-sized agricultural companies are working in Ukraine, and badly need state support, among them the enterprises of the grain sector, which are not even included in the list of those that are eligible for subsidies.

For this reason, the Ukraine’s subsidy distribution practices are being described by critics as non-transparent and unfair. It’s an issue that was discussed in the European Parliament on March 7.

MEPs Fulvio Martusciello and Alberto Cirio lead a roundtable discussion. “Today, in particular, we are concerned about the distribution of government subsidies in Ukraine for the development of the agricultural sector, being one of the most important industries of Ukrainian economy, the leading export industry and having the significant development potential,” said Cirio.

The roundtable is particularly timely. It comes hot on the heels of a European Commission proposal to earmark €1bn in financial assistance to the Ukraine. If the European Parliament and the Council of Europe approve, the first tranche could arrive to Kiev as early as July.

What’s certain, however, is that the funds will not be transferred unless the Ukrainian government implements anti-corruption reforms and related legislative initiatives to boost transparency.

“The new EU requirements will also be related to the fight against corruption in Ukraine,” said Martusciello.

“We call on the state authorities of Ukraine: the President, the Prime Minister, the profile committees of the Parliament to focus on the schemes of the government subsidies formation in the agricultural sector as well as on the principles of their distribution in 2018 and in future,” said Cirio.

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