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24/04/2013

EBRD and FAO pledge support to Ukrainian dairy sector

Specialised forum to support sector policy dialogue, promote investment

The European Bank for Reconstruction and Development (EBRD) and FAO’s Investment Centre, in close cooperation with the Ukrainian Ministry of Agrarian Policy and Food, are joining forces to improve the investment climate in the Ukrainian dairy sector and bring cooperation between the private and public sectors to a new level.

The Ukraine Dairy Market Forum, which took place in Kiev on 23 April 2013, launched a new phase of policy dialogue between the EBRD, FAO, Ukrainian policy-makers and private sector players. It capitalized on the highly successful policy dialogue initiative implemented by FAO and the EBRD in Ukraine’s grain sector between 2011 and 2012, which resulted in greater transparency in policy-making processes.

The Forum brought together representatives from the Ministry of Agrarian Policy and Food of Ukraine, leading industry and producers’ associations, domestic and foreign dairy companies, as well senior sector experts from the FAO and the EBRD. 

The Forum participants are planning to set up a consultative working group. The group will look at issues related to investment needs at the industry and farm levels, improvement of raw milk quality, and overall up hauling of industry standards to ensure Ukraine’s competitiveness. Ukraine remains among the top six producers of milk in Europe but its milk output has nearly been halved since 1991.

Once set up, the working group is expected to review existing regulations related to the dairy sector in Ukraine and provide professional guidance on how these could be improved. It will also help coordinating marketing and pricing discussions between milk producers and dairy processors, based on transparent market evaluation mechanisms. Leading international industry experts will be invited to join discussions on specific technical and marketing issues at the request of the group.

At the occasion of the 23 April Forum, FAO and the EBRD presented the key findings of a recent study on Ukraine’s dairy market. According to the study, important investments are needed to improve the quality of milk and dairy products in Ukraine and this requires the emergence of modern, commercially oriented, dairy farms. While traditional household farms used to account for 80% of Ukraine’s milk account, commercial farms, with the capacity to meet higher market standards, have already started to appear and are expected to play a more important role in the future. 

“In the light of growing global food security concerns, we believe Ukraine has a lot to offer as an exporter of finished agricultural products. The rapidly growing Ukrainian dairy sector is another possible answer to the issue of sustainable food supply on this planet. We welcome the ongoing policy dialogue between all parties in this important sector for the Ukrainian economy,” said Gilles Mettetal, EBRD Director for Agribusiness.